AVB 0.00% 16.5¢ avanco resources limited

iron ore update, page-2

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    CARAJAS IRON ORE
    UPDATE
    The Company is pleased to provide an up-date on Vale?s activities at
    Avanco?s Iron Ore Project and to inform that the Company is currently
    validating a resource estimate.
    HIGHLIGHTS
     Vale has completed a maiden drill programme at the Trindade
    North Iron Ore Project in Carajas, Brazil.
     15 diamond drill holes for 2,600m have been concluded and
    exceeds the minimum drilling obligations.
     Significant widths of highly magnetic, magnetite rich,
    Banded Iron Formation (?BIF?) have been intersected.
     Vale has received sufficient drill results to prepare a resource
    estimate which is being validated by the Company.
     The BIF situated within Avanco?s tenement makes up the
    southern portion of a much larger mineralised structure which
    straddles the common Vale-Avanco tenement boundary.
     To facilitate any future exploitation of the iron ore, the
    Company believes that practicalities will dictate that the Vale
    and Avanco resources will have to be mined concurrently.
     Next month Vale will need to advance Avanco USD$600,000 to
    retain the rights under the Option Agreement for an additional
    12 months.
     The Vale-Avanco Iron Ore Agreement can potentially generate
    payments in the order of USD$10m to USD$40m for the
    Company.
    As announced previously1, Vale have been granted exclusive exploration
    rights and an Option to acquire the Trindade North Property.
    Avanco has submitted the ?Final Exploration Report2? to the regulatory
    authorities and approval is pending. In the interim and on the first
    anniversary3 Vale is obliged advance Avanco USD$600,000 to retain the
    Option.
    AVANCO RESOURCES LIMITED
    2
    Current provisions of the ?Vale Iron Ore Option Agreement? include:
    1- Vale must pay Avanco USD$600,000 to secure the Option for a
    second year. To retain the Option for a third year, Vale must make
    payment of USD$1,000,000 in August 2012.
    2- On Avanco receiving total funds from Vale estimated at
    USD$10,000,000 or more4, Vale will have earned the right to acquire
    sole ownership of Trindade North. The total sum of all qualifying
    payments is capped at USD$40,000,0005.
    Tony Polglase
    Managing Director




    Nice
 
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