|Denver, Colorado: Solitario Resources Corporation (AMEX:XPL;TSX:SLR) announced outstanding drill intercepts of high-grade zinc mineralization on its Bongará zinc project in northern Peru. The 26-hole, 4,354 meter program, completed in late 2006, was managed and funded by Solitario's joint venture partner Votorantim Metais. In addition, Solitario and Votorantim also signed a formal Framework Agreement that replaces the previously announced Letter Agreement and provides definitive terms for the relationship between the parties to the venture.
The Bongará project hosts the Florida Canyon zinc deposit where high-grade zinc mineralization has been intersected in drill holes over an area at least two by two kilometers in dimension. The deposit is open to expansion in all directions.
2006 Drilling Program Results
Highlights of the 2006 drilling program include the following drill holes:
- A-1: 36.2 meters @ 12.84% zinc, 2.69% lead and 18.45 g/t silver
- A-5: 5.2 meters @ 15.04% zinc, 0.66% lead and 5.73 g/t silver
- C-4: 6.8 meters @ 15.98% zinc, 5.03% lead and 36.51 g/t silver
- D-5: 8.2 meters @ 7.57% zinc, 1.27% lead and 10.31 g/t silver
- E-1: 2.5 meters @ 25.48% zinc, 0.69% lead and 9.61 g/t silver
- E-3: 2.8 meters @ 22.05% zinc, 6.47% lead and 47.96 g/t silver
- E-5: 5.3 meters @ 29.77% zinc, 4.65% lead and 43.99 g/t silver
- E-6: 4.8 meters @ 12.07% zinc, 1.06% lead and 6.94 g/t silver
The 2006 drilling program focused upon a relatively limited area within the known mineralized system. Four drill platforms situated between 100 and 150 meters apart tested in detail an area approximately 200 meters by 500 meters in dimension. Drill hole intercept spacing of the mineralized horizons within this detailed drill area ranged from 25 to 140 meters. The specific drilling targets consisted of two stratiform layers of mineralization, the Milagros and Karen zones. Significant mineralization, greater than 2.0% zinc over 2.0 meters (or equivalent), was intersected in 19 out of 24 drill holes completed to the target depth, with two holes failing to reach the target horizon due to drilling difficulties. This is an exceptional success ratio of good drill holes to sub-mineralized holes and bodes well for the overall potential of the project. Results of these 19 drill holes are provided in the attached table.
Chris Herald, President and CEO of Solitario commented, "To put these results into perspective, this program tested only about 5% of the known mineralized system. This is the first drilling program to define stratiform mineralization in detail, as previous drilling at Florida Canyon consisted of widely-spaced drill holes in the range of 100 to 300 meters apart. These impressive drilling results confirm the continuity and quality of mineralization and provide additional evidence that the Florida Canyon deposit represents one of the best undeveloped zinc deposits in the world. Votorantim has already initiated studies for an underground exploration program and analyses for road access to the Bongará project with definite plans for an expanded drilling program resuming in mid-2007. We look forward to Votorantim quickly advancing this quality asset."
The drill hole information contained within this release is reported under a quality control program reviewed by Mr. Walt Hunt, Vice President of Operations for Solitario Resources Corporation, who is a qualified person as defined by National Instrument 43-101. Samples are derived from 50% splits of HQ and NQ (2.5 and 1.9 inch) diameter core. Samples are then shipped via secured third-party land and air transportation companies and analyzed by ALS Chemex Inc., North Vancouver, Canada, an ISO9002 registered company.
Terms of the Framework Agreement
The Framework Agreement ("Agreement") contains business terms identical to the previously signed and announced Letter Agreement. Votorantim has already completed its year-one $1.0 million work commitment and can earn up to a 70% interest in the project by completing future annual exploration and development expenditures and making cash payments annually after the first year. The option to earn the 70% interest can be exercised by Votorantim at any time by committing to place the project into production based upon a feasibility study. Votorantim's future minimum annual expenditures are $1.5 million in each of years two and three, and $2.5 million in all subsequent years until a minimum of $18.0 million has been expended. Votorantim is the project operator and may elect to terminate its option to earn a 70% interest at any time.
Once Votorantim has fully funded its $18.0 million work commitment, it has further agreed to finance Solitario's 30% participating interest for construction. Solitario will repay the loan facility through its cash flow distributions.
Solitario discovered the Florida Canyon deposit in 1996 and joint ventured the Bongará project with Cominco Ltd. in early 1997. Cominco spent approximately US$16.0 million on the project, including drilling 80 core holes within the Florida Canyon deposit area between 1997 and 2000. (Click here to view the previous drilling highlights).
About Votorantim Metais
Votorantim Metais belongs to a privately-held Brazilian industrial conglomerate that is a leader in every market segment in which it operates, including cement, pulp and paper, metals, chemicals, orange juice, and finance. In 2005, Votorantim Group’s revenues amounted to US$ 7.8 billion. The metal business division accounted for 30.4% of revenues and produces zinc, nickel, steel and aluminum. Votorantim Metais is the world's tenth largest primary zinc producer with three operating zinc smelters and two operating zinc mines. It owns the Cajamarquilla zinc smelter and is a major shareholder of Milpo, both located in Peru.
Solitario is a gold, silver, platinum-palladium, and base metal exploration company actively exploring in Brazil, Mexico and Peru. Besides Votorantim, Solitario has significant business relationships with Newmont Mining and Anglo Platinum. Solitario has approximately US$24 million in cash and marketable securities and no debt. Solitario is traded on the American Stock Exchange (AMEX: XPL) and on the Toronto Stock Exchange (TSX: SLR).
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This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Solitario, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Development of any of Solitario’s properties is subject to the success of exploration, completion and implementation of an economically viable mining plan, obtaining the necessary permits and approvals from various regulatory authorities, and compliance with operating parameters established by such authorities. Important factors that could cause actual results to differ materially from Solitario’s expectations are disclosed under the heading "Risk Factors" and elsewhere in Solitario’s documents filed from time to time with Canadian Securities Commissions, the United States Securities and Exchange Commission and other regulatory authorities.