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Brazauro And Eldorado To Partner On The Tocantinzinho Project And
Tapajos District Exploration
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News Release ELD No. 08-18
VANCOUVER, BC, -- Eldorado Gold Corporation ("Eldorado") is pleased to
announce that we have reached an agreement for Eldorado to earn an
interest in Brazauro Resources Corporation's ("BZO") 43,000 hectare
Tocantinzinho Project ("TZ Project") in the Tapajos District of Para
State, Brazil. In addition the agreement provides for a partnering of
extended exploration in the Tapajos District.
This agreement ensures that the TZ Project will be explored and
developed in a timely manner through the access to Eldorado's
exploration and project development expertise in Brazil.
Eldorado can earn up to a 75% interest in the TZ Project by undertaking
$9.5 million of exploration and development expenditures and making
payments to Brazauro in the aggregate of $90.0 million plus a
production decision fee of up to $10.0 million.
Eldorado will subscribe for 8,800,000 units of Brazauro at a price of
$0.95 per unit (the "Private Placement"). Each unit is comprised of one
common share of Brazauro and one warrant. Each warrant will entitle
the holder to acquire one half of one common share of Brazauro at a
price of $1.30 per share for a period of 18 months. The proceeds of
the Private Placement will be used by Brazauro to fund exploration
activities in Brazauro's other properties in Brazil including the
Tapajos District and for general corporate purposes.
Eldorado will incur a minimum of $9.5 million of expenditures on the TZ
Project within a 24 month period and will then have the option to
acquire an initial 60% interest in the TZ Project by paying Brazauro
$40 million. Eldorado will have a further option to increase its
interest in the TZ Project to 70% by making an additional payment to
Brazauro of $30 million within 90 days of the executive committee of
the joint venture (the "Executive Committee") approving the
construction of the mine based on a NI 43-101 compliant feasibility
study (the "Feasibility Study").
Provided Eldorado has exercised both the first and second option, at
any time within 2 years of the construction decision, Eldorado can
exercise a third option by paying $20 million to Brazauro in exchange
for an additional 5% interest in the TZ Project. If a production
decision is made by Executive Committee and the proven and probable
gold reserves included in the Feasibility Study are greater than 2.0
million ounces Eldorado will pay an additional production decision fee
to Brazauro based on the following:
Proven and Probable Gold Reserves Payment
2.0 million ozs to 2.5 million ozs $5.0 million
Greater than 2.5 million ozs $10.0 million
Exclusive to the TZ Project Brazauro will grant Eldorado a Right of
First Offer ("ROFO") in the event that Brazauro wishes to either sell
an interest in or enter into a joint venture in respect to the
development of any additional property in Brazil.
The TZ Project is located in the Tapajos District of north central
Brazil. Gold mineralization occurs as stockwork veinlets within
Proterozoic granite. Work to date has successfully defined a resource
base consisting of 1.05 million ounces of gold in the indicated
category and 1.04 million ounces of gold in the inferred category.
Brazauro has planned a 7500 meter drill program in 2008 designed to
both upgrade inferred resources and increase total resources. Eldorado
anticipates that the scope of the planned programme managed by Eldorado
will be enhanced consistent with our view of the TZ Project's excellent
prospectivity.
Eldorado's President and Chief Executive Officer, Paul Wright
commented, "We are excited with the opportunity the TZ Project provides
and the ability to partner with Brazauro in the Tapajos District.
With an initial significant resource base established at the TZ Project
we have a unique entry point into a prolific gold district in a
jurisdiction in which we have explored and operated for more than 10
years. We have retained our senior management team from our Sao Bento
mine in Brazil and are ready to take on the responsibility to advance
the TZ Project to a construction decision in a timely manner."
About Eldorado
Eldorado is a gold producing, exploration and development company
actively growing businesses in Brazil, Turkey, China, Greece and the
surrounding regions. With our international expertise in mining,
finance and project development, together with highly skilled and
dedicated staff, we believe that Eldorado is well positioned to grow in
value as we create and pursue new opportunities.
ON BEHALF OF
ELDORADO GOLD CORPORATION
"Paul N. Wright"
Paul N. Wright
President & Chief Executive Officer
The terms "Mineral Reserve", "Proven Mineral Reserve" and "Probable
Mineral Reserve" used in this release are Canadian mining terms as
defined in accordance with National Instrument 43-101 -- Standards of
Disclosure for Mineral Projects under the guidelines set out in the
Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM")
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM
Council on August 20, 2000 as may be amended from time to time by the
CIM. These definitions differ from the definitions in the United
States Securities & Exchange Commission ("SEC") Guide 7. In the United
States, a mineral reserve is defined as a part of a mineral deposit
which could be economically and legally extracted or produced at the
time the mineral reserve determination is made.
The terms "Mineral Resource", "Measured Mineral Resource", "Indicated
Mineral Resource", "Inferred Mineral Resource" used in this release are
Canadian mining terms as defined in accordance with National
Instruction 43-101 -- Standards of Disclosure for Mineral Projects
under the guidelines set out in the CIM Standards. Mineral Resources
which are not Mineral Reserves do not have demonstrated economic
viability.
For a detailed discussion of resource and reserve estimates and related
matters see the Company's reports, including the Annual Information
Form and FORM 40-F dated March 29, 2007 and technical reports filed
under the Company's name at www.sedar.com.
Note to U.S. Investors. While the terms "mineral resource", "measured
mineral resource," "indicated mineral resource", and "inferred mineral
resource" are recognized and required by Canadian regulations, they are
not defined terms under standards in the United States and normally are
not permitted to be used in reports and registration statements filed
with the SEC. As such, information contained in this report concerning
descriptions of mineralization and resources under Canadian standards
may not be comparable to similar information made public by U.S
companies in SEC filings. With respect to "indicated mineral resource"
and "inferred mineral resource" there is a great amount of uncertainty
as to their existence and a great uncertainty as to their economic and
legal feasibility. It can not be assumed that all or any part of an
"indicated mineral resource" or "inferred mineral resource" will ever
be upgraded to a higher category. Investors are cautioned not to
assume that any part or all of mineral deposits in these categories
will ever be converted into reserves.
Certain of the statements made herein may contain forward-looking
statements or information within the meaning of the United States
Private Securities Litigation Reform Act of 1995, and forward-looking
statements or information within the meaning of the Securities Act
(Ontario). Such forward looking statements or information include, but
are not limited to statements or information with respect to unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Frontier or Eldorado, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements or information
are subject to a variety of risks and uncertainties, which could cause
actual events, or results to differ from those reflected in the
forward-looking statements or information. Should one or more of these
risks and uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described in forward- looking statements. Specific reference is made
to "Forward Looking Statements and Risk Factors" in Eldorado's Annual
Information Form and Form 40 F dated March 31, 2008. Such factors
include, amongst others, the following: gold price volatility; impact
of any hedging activities, including margin limits and margin calls;
discrepancies between actual and estimated production, between actual
and estimated reserves, and between actual and estimated metallurgical
recoveries; mining operational risk; regulatory restrictions, including
environmental regulatory restrictions and liability; risks of sovereign
investment; speculative nature of gold exploration; dilution;
competition; loss of key employees; additional funding requirements;
and defective title to mineral claims or property, as well as those
factors discussed in the section entitled "Risk Factors" in Eldorado's
Annual Information Form and Form 40-F dated March 31, 2008. We do not
expect to update forward-looking statements continually as conditions
change and you are referred to the full discussion of Eldorado's
business contained in Eldorado's reports filed with the securities
regulatory authorities in Canada and the U.S.
Eldorado Gold Corporation common shares trade on the Toronto Stock
Exchange (TSX: ELD) and the American Stock Exchange (AMEX: EGO). The
TSX has neither approved nor disapproved the form or content of this
release.
Contact:
Nancy E. Woo, Manager Investor Relations
Phone: 604.601.6650 or 1.888.353.8166
Fax: 604.687.4026
Email: nancyw@eldoradogold.com
Eldorado Gold Corporation
1188, 550 Burrard Street
Vancouver, BC V6C 2B5
Web site: www.eldoradogold.com
Request for information packages: laurelw@eldoradogold.com
View News Release in PDF Format:
http://www.eldoradogold.com/i/pdf/08-18.pdf
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Copyright (c) 2008 ELDORADO GOLD CORP. (ELD) All rights reserved. For
more information visit our website at http://www.eldoradogold.com/ or
send mailto:info@eldoradogold.com
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