TORONTO, ONTARIO--(CCNMatthews - March 3, 2005) - BDI Mining Corp. (TSX VENTURE:BDI)(AIM:BMG) announces significant developments with respect to the Company's 100%-owned Woodlark Island Gold Project, 300 kilometres northeast of the Papua New Guinea mainland.
Highlights
- The Company has appointed Barclays Capital, the investment banking division of Barclays Bank PLC, as project advisor for the Woodlark Island gold project, to work with the Company in advancing the project and securing debt finance for any future gold mining operations.
- A 25,000 metre reverse circulation and diamond drilling program will commence in April to target new mineralisation.
- Loeb Aron & Company has been appointed to arrange a private placing to institutional investors of up to 15 million shares at GBP 30 pence per share (approximately Cdn$0.71 per share), to raise gross proceeds of up to GBP Pounds Sterling 4.5 million.
Barclays Capital
Barclays Capital, the investment banking division of Barclays Bank PLC, has been appointed project advisor for the Woodlark Island gold project. The terms of the engagement with Barclays Capital will be split into two phases. Phase 1 will be to take the project through finalisation of bankable feasibility and structuring of debt package. Phase 2 is finalisation of project financing.
Under the terms of the engagement, the highly regarded Mining & Metals team of Barclays Capital will work with BDI Mining to ensure that all aspects of the Woodlark exploration program conform to Barclays Capital's standards required for the project to be "bankable".
"We are delighted to appoint an advisor of the calibre of Barclays Capital," said BDI Mining managing director, Mr. Lee Spencer. "The appointment affirms management's belief that Woodlark Island has potential to develop into a significant gold mining operation. Exploration over the next 12 months will be accelerated so the full resource potential of Woodlark can be identified."
"Barclays Capital is one of the world's leading investment banks with a focus on debt and risk management. The Mining & Metals team assists a wide variety of clients throughout the global mining industry and is delighted to be working with BDI Mining in the development of this exciting gold project," said Mr. Gerard Holden, Head of Mining & Metals at Barclays Capital.
In consideration of the engagement, BDI has agreed to issue Barclays Capital 2,500,000 warrants to purchase common shares in BDI Mining Corporation for a period of five years from the issue date. The warrants have a strike price of Cdn$0.60 per share. 1,250,000 warrants vest immediately, 750,000 of the warrants vest when BDI's share price reaches Cdn$0.84 per share (or UK sterling equivalent) for a period of five consecutive trading days on either the TSX Venture Exchange or the AIM Market in London, and the balance of 500,000 warrants will vest when BDI share price reaches Cdn$1.19 (or UK sterling equivalent) for a period of five consecutive trading days. Shares acquired on the exercise of the warrants will be subject to a four month hold period from the date of issuance of the warrants.
Woodlark Exploration
During 2004, BDI completed 2,800 metres of diamond drilling on Woodlark Island, concentrating on the Kulumadau deposit, where approximately half of the existing Woodlark measured and indicated resource of 374,916 ounces (6,779,000 tonnes at 1.72g/t Au1) was identified by a previous operator. BDI's drilling intersected high-grade mineralisation approximately 70 metres below the base of the previous drilling. Preliminary 3D modeling by the Company's consultants Continental Resource Management Pty Ltd in Australia have demonstrated continuity between the near surface mineralisation and the deeper Kulumadau mineralisation intersected by BDI Mining. The mineralisation remains open at depth.
Simultaneously, BDI completed an induced polarization (IP) survey over the whole 2.5 kilometre Kulumadau-Great Northern Trend as well as Wonai, a high-grade epithermal gold target in the south of the island. This survey has generated 26 new targets, six of which display the same intensity of signature as Kulumadau.
Wonai and the six priority IP targets will be drill tested with a 25,000 metre diamond and reverse circulation drilling program commencing in April and scheduled to be completed by the end of September. The first to be drilled will be Wonai, where surface sampling has returned values up to 56g/t Au with associated significant silver grades, with trenching currently underway. Simultaneously, IP will be run over the mineralized Vulcan-Federation Trend and the Wotau-Boniavat Trend to prioritise additional drill targets.
Financing
To finance the accelerated drilling program, the Company has appointed Loeb Aron & Company of London to arrange the placement to institutional investors of up to 15 million shares at GBP 30 pence per share, to raise gross proceeds of up to GBP Pounds Sterling 4.5 million. Loeb Aron will be paid a fee of 6% of the gross proceeds raised payable in cash or shares at its option. The shares will be tradeable on the AIM Market of London, but will be restricted for trading on the TSX Venture Exchange for a period of four months from closing.
(1) The resource calculations were completed by Snowden Associates of Perth in September, 1996 using the JORC Code, and based on drilling undertaken by Auridiam Ltd and assays processed by Astrolab Pty Ltd in PNG, with check assays undertaken by Analabs in PNG. No more recent resource estimate has been done. BDI considers the resource calculations to be both reliable and relevant to the Woodlark Property. The JORC Code classifications used are believed to be roughly equivalent to CIM classifications at that time.
The financing and Barclays Capital warrants are subject to the approval of the TSX Venture Exchange.
Issued on behalf of BDI Mining Corp.
Lee K. Spencer, President & CEO
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the corporation's periodic filings with Canadian securities regulators.
Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.
Woodlark exploration is supervised by the Company's President and CEO, Mr. Lee K. Spencer, MSc, MAusIMM, a qualified person as defined by National Instrument 43-101. Mr. Spencer is responsible for the preparation of technical information in the company's News Releases.
FOR FURTHER INFORMATION PLEASE CONTACT:
BDI Mining Corp. Chuck Forrest Finance Director (416) 955-9535 (416) 955-9538 (FAX) www.bdiminingcorp.com or Ruegg & Co (AIM Nominated Advisor) Brett Miller +44-20-7584 3663 or Hichens, Harrison & Co. (AIM Broker) Christian Dennis +44-20-7382 4473 or Parkgreen Communications Justine Howarth + 44-20 74933713
No stock exchange has approved or disapproved the information contained herein.
