First Bauxite Corporation Announces Execution of Definitive Agreement With Bauxite Corporation of Guyana Inc. and Therefore the Acquisition of the Historical Tarakuli Bauxite Deposit in Guyana
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/20/10 -- FIRST BAUXITE CORPORATION ('First Bauxite' or the 'Company') (TSX VENTURE: FBX)(FRANKFURT: FBI)(BERLIN: FBI) is pleased to announce that, further to its February 9, 2010 news release, the Company has now entered into a definitive agreement dated July 15, 2010 with Bauxite Corporation of Guyana Inc. ('BCGI') to acquire all of the issued and outstanding shares of BCGI (the 'Acquisition') and accordingly, 100% of its interest in and all right and title to, the contiguous Tarakuli and Tarakulli North West Prospecting Licenses in Northeast Guyana (the 'Property'). The Company is satisfied with the results of its due diligence on the Property and expects the closing of the Acquisition to occur on or before July 31, 2010. The Acquisition remains subject to the approval of the TSX Venture Exchange.
Yannis Tsitos, the President of the Company stated, 'We are very pleased at First Bauxite that our due diligence on the Property and BCGI has been successfully concluded, and that finally the parties have now executed the definitive agreement for the acquisition of BCGI and thereby the acquisition by First Bauxite of the historical high-alumina Tarakuli bauxite deposit in Guyana. Would also like to repeat that I am very excited by the medium to long-term value this transaction can bring to our shareholders. For less than 4% dilution we have acquired a significant, high quality bauxite deposit in the prolific Coastal Bauxite Belt of Guyana.'
About Bauxite Corporation of Guyana and the Tarakuli Bauxite Deposit.
Bauxite Corporation of Guyana Inc ('BCGI') is a private company incorporated under the laws of the Province of Ontario and registered as an external company under the Companies Act of Guyana, which holds the rights to two Prospecting Licenses covering an area of approximately 10,000 hectares, that cover an historical bauxite deposit, named Tarakuli, in North Eastern Guyana. BCGI has submitted to the Guyana Geology & Mines Commission applications for three additional Prospecting Licenses, covering an area of 15000 hectares surrounding and contiguous to the two existing PLs. The Tarakuli Prospecting Licenses are located approximately 15 km inland from the Corentyne River, which is the border between Guyana and Surinam and approximately 90 km East of the Aroaima-Kwakwani bauxite Mines owned and operated by UC Rusal, the world largest aluminum and alumina producer.
The Tarakuli deposit was discovered by Reynolds Metals Company (USA) ('Reynolds Metals') in the 1960's when Reynolds Metals drilled on a 500 x 500 m grid more than 700 holes until 1972. The deposit is located over an area of 6.5 km by 1.5 km. In an attempt to outline the deposit and quantify a bauxite resource, Reynolds Metals drill data indicated an historical, inferred bauxite resource of approximately 62.7 million MT at 58.6% Al2O3, 4.7% SiO2, 2.5% TiO2 and 3.3% Fe2O3. Half of the tonnage was classified as metallurgical grade bauxite and half as chemical grade bauxite, using specifications of the time (3.0-5.5% silica & 1.5-4.5% Fe-oxide for metallurgical grade and 4.5-6.0% silica & less than 1.5% Fe-oxide for the chemical grade definitions). The average ore thickness is 6.61 metres and it is located below an average overburden cover of 46 metres. The source of the above listed drill data provided by Reynolds Metals is a report entitled 'Geological Evaluation of the Tarakuli Bauxite Deposit in the Courentyne River Area of Guyana' dated as of July 2001, and prepared by Maurice C. Hamilton, and is based on the data collected by Reynolds Metals pursuant to an initial drilling campaign from 1962-1964 and a second drilling campaign in the early 1970's. In terms of the relevance and reliability of the historical estimate, the resource was based on 40 contiguous mineralized holes that indicated greater than 6 feet or 1.82 metres bauxite intersections. The historical estimates provided herein do not use categories other than the ones set out in sections 1.2 and 1.3 of National Instrument 43- 101 - Standards of Disclosure for Mineral Projects ('NI 43-101'). At this time, First Bauxite does not have available to it any more recent estimates or data regarding the Tarakuli property.
A qualified person has not done sufficient work on the Tarakuli property to classify the historical estimate as current mineral resources under NI 43-101, First Bauxite is not treating the historical estimate as current mineral resources as defined in sections 1.2 and 1.3 of NI 43-101, and the historical estimate should not be relied upon.
About the Definitive Agreement between First Bauxite Corporation and Bauxite Corporation of Guyana.
In exchange for the BCGI Shares and its right to the Property, First Bauxite will issue to the shareholders of BCGI (the 'BCGI Shareholders'), an aggregate of 2,000,000 common shares in the capital of First Bauxite (the 'FBX Shares') which will be distributed to the BCGI Shareholders pro rata to their holdings in the common shares of BCGI on the Effective Date. The Company will also be required to make a $100,000 cash payment to the BCGI Shareholders within 15 days following the execution date of the Definitive Agreement. Additionally, the Company will provide to the BCGI Shareholders a 1.5% net profit interest (the 'NPI') with regard to minerals produced from the Property. First Bauxite will have the right but not the obligation to purchase all, but not less than all of the NPI at any time, in exchange for a $2,000,000 cash payment to the BCGI Shareholders.
As a result of the issuance of the FBX Shares: (i) following the closing of the Acquisition, BCGI will become a wholly owned subsidiary of First Bauxite; and (ii) the BCGI Shareholders will become shareholders of First Bauxite.
About First Bauxite Corporation
First Bauxite Corporation (TSX VENTURE: FBX) is a Canadian natural resources company engaged in the exploration and development of bauxite deposits, through resource discovery and mining within a niche industrial market. The company has its head-office in Vancouver and its current assets in Guyana, South America and is managed by experienced geoscientists and business development professionals with worldwide experience in the exploration and mining business across a number of mineral commodities. The mission of First Bauxite is to become a near term, medium size producer and supplier of high quality refractory grade calcined bauxite. First Bauxite controls a large land package in Guyana's historical coastal bauxite belt, including the Bonasika Mining Licence and the Waratilla Prospecting License, covering deposits which were drilled in 1940's-60's by ALCAN and which host near surface deposits of refractory grade bauxite. The Company has commissioned a Feasibility Study over the Bonasika Project to analyze the technical and economic parameters of an independent mining and processing operation and is currently drilling the Waratilla bauxite deposits to outline the resources and to upgrade the historical reserves to NI 43-101 compliance.First Bauxite has additional upside potential to the metallurgical bauxite business, through an option agreement with Rio Tinto Mining and Exploration Ltd, whereby Rio can earn up to 75% interest in the Company's exploration ground by expending up to US$58 million in stages. Finally, the Company has acquired all of the issued and outstanding shares of Bauxite Corporation of Guyana Inc. ('BCGI') and accordingly, 100% of its interest in the contiguous Tarakuli and Tarakuli North-West Prospecting Licenses in Northeast Guyana, which host an historical inferred bauxite resource of significant size and quality. For further information on First Bauxite Corporation, please visit our corporate website at www.firstbauxite.com.
On behalf of The Board of Directors of First Bauxite Corporation
Ioannis (Yannis) Tsitos, President & Director
Hilbert N. Shields, CEO & Director
This document contains certain forward looking statements which involve known and unknown risks, delays, and uncertainties not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance or expectation implied by these forward looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
First Bauxite Corporation
Ioannis (Yannis) Tsitos
President & Director
604-806-0916
604-806-0956 (FAX)
www.firstbauxite.com