VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 25, 2004) - Mr. Ian Rozier, President, is pleased to announce that Newport Exploration Ltd. (the "Company") has entered into an Agreement with King Eagle Resources Pty Limited ("King Eagle") of Sydney, Australia whereby the Company has acquired an option over an 80% interest in the Mulga Tank Nickel Project, ("Mulga Tank") in Western Australia.
Mulga Tank is a significant target for a large dunite hosted nickel sulphide deposit and is located approximately 250km northeast of Kalgoorlie in the Northeast Goldfields of Western Australia, an area that contains some of the world's largest nickel deposits. The Mulga Tank Tenements comprise an Exploration Licence covering 210 sq km, and an Application for Exploration Licence over 153 sq km. Under the terms of the Agreement with King Eagle, the Company has secured an option over an 80% interest in the Exploration Licence and an option over a 75% interest in the Application Exploration Licence.
The Mulga Tank tenements overlay portions of an extensive greenstone belt which includes the Minigwal dunite, a large, intense, circular, magnetic anomaly with an area of approximately 4 km in diameter. This anomaly has the characteristics for a major dunite hosted nickel sulphide deposit such as Mt. Keith (517 Mt @ 0.54% Ni at a 0.2% cut-off), which is also located in the Northeast Goldfields area of Western Australia. Technical work undertaken by BHP at Mulga Tank in the early 1980's reported assay results of up to 2% nickel and defined an extensive zone of 0.2% - 0.5% Ni, which included 2261m of shallow RC drilling, that remains open at depth in all directions.
"By virtue of its size, anomalism and the exploration results to date, the Mulga Tank prospect has the potential to host a major nickel sulphide deposit and as such represents an excellent acquisition for Newport." stated Ian Rozier.
The terms of the Option Agreement for the Company to acquire the interests in both licences from King Eagle are staged payments totaling Six Hundred Thousand Canadian Dollars (C$600,000), the issuance of Two Million Two Hundred and Fifty Thousand (2,250,000) common shares of Newport over a three year period and expenditures of Two Million Five Hundred Thousand (C$2,500,000) Canadian Dollars within 36 months of approval by the TSX Venture Exchange (the "closing"). Should Mulga Tank be placed in commercial production a further one million common shares of Newport will be issued to King Eagle.
The schedule of the cash consideration of the Purchase Price payable by
Newport is as follows:
- Thirty Thousand Canadian Dollars (C$30,000) within 10 days of
signing the Option Agreement;
- Thirty Thousand Canadian Dollars (C$30,000) on closing;
- Sixty Thousand Canadian Dollars (C$60,000) within twelve (12)
months of closing;
- Ninety Thousand Canadian Dollars (C$90,000) within twenty-four
(24) months of closing;
- One Hundred and Fifty Thousand Canadian Dollars (C$150,000) within
thirty-six (36) months of closing.
- Two Hundred and Forty Thousand Dollars (C$240,000) upon completion
of a feasibility study.
The share consideration of the Purchase Price payable by Newport is as
follows;
- One Hundred and Fifty Thousand (150,000) common shares of Newport
to be issued to King Eagle within ten (10) days of closing;
- A further Three Hundred Thousand (300,000) common shares of
Newport to be issued to King Eagle within twelve (12) months of
closing;
- Four Hundred and Fifty Thousand (450,000) common shares of Newport
to be issued to King Eagle within Twenty-Four (24) months of
closing;
- Six Hundred Thousand (600,000) common shares of Newport to be
issued to King Eagle within thirty-six (36) months of closing.
- Seven Hundred and Fifty Thousand (750,000) common shares of
Newport to be issued to King Eagle on completion of a feasibility
study.
- One million (1,000,000) common shares of Newport to be issued to
King Eagle on commencement of commercial production.
Expenditure commitments on Mulga Tank are Two Million Five Hundred
Thousand (C$2,500,000) Canadian Dollars within 36 months of the date of
closing, such expenditures to be at the following schedule;
- Two Hundred and Fifty Thousand Canadian Dollars (C$250,000) within
12 months of closing;
- A further Five Hundred Thousand Canadian Dollars (C$500,000)
within twenty-four months of closing;
- A further Seven Hundred and Fifty Thousand Canadian Dollars
(C$750,000) within 36 months of closing;
- A further One Million Canadian Dollars (C$1,000,000) within 48
months of closing.
- Amounts of less than 30% of the committed expenditures that are
incurred annually as per the schedule as outlined can be accrued
for expenditures the following year with no penalty or default on
the part of Newport. The balance of other unspent amounts will be
subject to a 50% penalty of such amount to be paid in cash to King
Eagle.
The Company has been awaiting the re-start of drilling operations on the Franco Nevada gold property in Mexico that it proposes to explore with its joint venture partner, Cardero Resources; a local dispute over surface rights and property access has caused a significant delay in the program. Cardero anticipate having this resolved shortly.
The Company, in conjunction with Northern Orion Resources, has been trying to resolve certain issues regarding the Mantua Copper Project in Cuba. The Company has informed Northern Orion that because these issues have not been resolved to the satisfaction of the Company, the Company no longer intends to pursue an interest in the project.
The Company has 13,927,850 shares issued and outstanding and over Cdn$2 million in the treasury. The Mulga Tank nickel project will be the major focus of the Company going forward. A NI43-101 report is currently being prepared on the property and the Company is well funded to meet its obligations on the property for the first two years.
FOR FURTHER INFORMATION PLEASE CONTACT:
Newport Exploration Ltd. Barbara Dunfield (604) 685-6851 (604) 685-6493 (FAX) Email: info@newport-exploration.com Website: www.newport-exploration.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of the contents of this news release.
