VANCOUVER, June 15 /CNW/ - Red Dragon Resources Corp. (the "Company") is
pleased to announce the signing of a Letter of Intent (LOI) with AP Energy
Investments Ltd. (AP), a Chinese private company, to purchase, explore and
develop a number of zinc properties in the Weixi district of southwest China.
Details of the LOI are:
- AP has purchased Baimaji Mining Ltd., which owns a mining lease, and
is in discussions with several other property owners to purchase and
consolidate the surrounding mining leases and exploration concessions
for a total area of approximately 15 square kilometres.
- The mining leases and exploration concessions cover stratigraphy that
is known to host lead-zinc mineralization over an eight kilometre
strike length and is currently the focus of small scale artisinal
- The Company will have a 9 month due diligence period to evaluate the
potential of the project.
- If the Company elects to proceed with further exploration and/or a
feasibility study after the due diligence period, the Company has the
option to earn up to a 60% interest in the project by funding
exploration and/or a feasibility study to the amount equal to
1.5 times AP's total investment in the project. The cost of
exploration work during the due diligence period by the Company will
form part of the investment to earn up to a 60% interest in the
- Once the Company has attained a 60% interest in the project, the cost
of exploration and development will be paid by both parties based on
their respective interest. Should one party elect not to invest, its
ownership in the project will be diluted accordingly.
The properties forming part of the LOI are located approximately
25 kilometres southeast of the companies Baoming and Shanchuan projects, all
of which have known zinc occurrences and similar geology as the Lanping Mine
located 100 kilometres to the south. The Lanping Mine is the largest zinc mine
in China with annual production of 100,000 tonnes of zinc per year. Grab
samples collected from outcrops and adits on the properties that form part of
the LOI grade up to 27.6% zinc and commonly average 6-10% zinc.
The 2007 exploration program on the Company's Baoming and Shanchuan
projects is well underway with the establishment of two 30-man camps, road
rehabilitation, soil and stream sediment sampling, and geological mapping.
Drill permits are expected from the Chinese Federal Government for the Baoming
project pending the delineation of final limits of the nearby proposed Nature
Reserve. Should the permit not be received in the immediate future, the
Company will move the drill and crews that have been contracted from Victor
Drilling Ltd. to the Baimaji project to conduct exploration drilling as part
of the due diligence study.
Alvin Jackson, Chief Executive Officer and Chairman of Red Dragon,
comments "I am confident that we will eventually receive the permit, although
the permitting process has taken longer than expected. In the interim, we will
conduct low cost systematic exploration programs on Baoming and Shanchuan
projects to define additional drill targets. The LOI signed with AP gives us
the opportunity to evaluate a number of zinc occurrences in the Three Rivers
Base Metal Belt that is known to host the largest zinc mine in China and one
of the top ten zinc deposits in the world."
Red Dragon is well financed to carry out exploration programs on their
existing properties in China as well as the new properties that will form part
of the LOI with AP.
Rock samples were analyzed by International Plasma Labs Ltd. in Kunming,
China, an ISO9001:2000 certified laboratory. Samples arriving at the
laboratory in Kunming are sorted, dried and crushed to -20 mesh. The sample is
then reduced to a 250 gram charge by repeated passes through a riffle splitter
and then pulverized to 90% passing -200 mesh. The sample is then rolled to
assure a homogeneous particle distribution and transferred to a bag for
analysis. Lead and zinc were analyzed by classical wet chemical techniques.
Silver was analyzed by fire assay with atomic absorption spectrometer (AAS)
finish. Red Dragon Resource Corp. has inserted quality control samples in
addition to quality control samples inserted by the laboratory.
Background on Red Dragon Resources Corp.:
Red Dragon Resources Corp. (www.reddragonresources.com) is a Toronto
Stock Exchange listed exploration company engaged in the identification,
acquisition and exploration of mineral properties with potential for
world-class mineral deposits in China and Canada.
The technical information in this news release has been prepared in
accordance with Canadian regulatory requirements as set out in National
Instrument 43-101 and reviewed by Garnet Dawson, P.Geo., Vice President of
Exploration for Red Dragon Resources Corp.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of the information
contained herein. The statements made in this press release may contain
certain forward-looking statements that involve a number of risks and
uncertainties. Actual events or results may differ from the Company's
This press release contains statements that are "forward-looking".
Generally, the words "expect," "intend," "estimate," "will" and similar
expressions identify forward-looking statements. By their very nature,
forward-looking statements are subject to known and unknown risks and
uncertainties that may cause our actual results, performance or achievements,
or that of our industry, to differ materially from those expressed or implied
in any of our forward-looking statements. Statements in this press release
regarding the Company's business or proposed business, which are not
historical facts, are "forward looking" statements that involve risks and
uncertainties, such as estimates and statements that describe the Company's
future plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition or result to occur. Since
forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in such
Investors are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made.
For further information:
For further information: Red Dragon Resources Corp., Alvin Jackson,
Chairman and Chief Executive Officer, Tel: (604) 602-8188; Harbour Financial
Inc., Brian N. Barbour, Tel: (403) 813-5832