Quaterra Signs Earn-In Agreement with Freeport-McMoran Exploration Corporation for Tintic Copper Project In Utah
2009-05-29 News Release
Freeport-McMoRan Exploration Corporation has option to acquire 70% for US$275,000 and US$4.725 million over four years
VANCOUVER, B.C. — Quaterra Resources Inc. today announced it has signed an earn-in agreement with Freeport-McMoRan Exploration Corporation of Phoenix, Arizona (“FMEC”), in respect of the Company’s Tintic Utah copper project.
In the terms of the agreement, FMEC has the exclusive right and option to acquire a 70% ownership interest in the Tintic project by making a US$275,000 property payment on behalf of the Company and by spending US$4.725 million on exploration over four years. Except for a US$250,000 exploration expenditure by July 29, 2009, which is a firm commitment, all other exploration expenditures and the property payment under the Earn-In Agreement are optional.
Upon FMEC earning a 70% interest in the Tintic project, the parties have agreed to joint venture the further exploration and, if warranted, development of the Project on a 70/30 basis with FMEC either funding Quaterra’s share of costs through the delivery of a bankable feasibility study or converting its interest to a 1% net smelter returns royalty if it determines not to deliver such a feasibility study. The joint venture will be on standard terms including dilution for failure to contribute a party’s share of costs. FMEC will be the initial operator under the joint venture.
Quaterra’s Southwest Tintic porphyry copper project which includes the Treasure Hill target, consists of approximately five square miles of mineral rights that were acquired by optioning and staking 85 unpatented U.S. lode claims and purchasing 1,511 acres of patented mining claims in July 2007. The acquisition includes the Southwest Tintic copper deposit discovered in the early 1970’s by Bear Creek Mining Company. The porphyry copper system is four miles south of the Tintic silver mines and at a depth of 1,100 feet. The system was investigated by six widely spaced core holes which form the basis for Krahulec and Briggs’ (2006) non-NI43-101 compliant estimate of a global resource containing more than 400 million tons of 0.33% copper, 0.01% molybdenum and 0.002 opt gold at a 0.3% copper cut-off.
FMEC’s parent company, Freeport-McMoRan Copper & Gold Inc. (FCX), is the world’s largest publicly traded copper company.
Quaterra Resources Inc. is a junior exploration company focused on making significant mineral discoveries in North America. The Company uses in-house expertise and its extensive network of consultants, prospectors and industry contacts to identify, acquire and evaluate prospects in mining-friendly jurisdictions with the potential to host large base metal, precious metal or uranium deposits. The Company’s preference is to acquire a 100% interest in properties on reasonable terms and maintain this interest through initial evaluation.
On behalf of the Board of Directors,
President and Chief Executive Officer, Quaterra Resources Inc.
Some statements contained in this news release are forward-looking statements within the safe harbor of the Private Securities Litigation Reform Act of 1995. These statements generally are identified by words such as the Company “believes”, “expects”, and similar language, or convey estimates and statements that describe the Company’s future plans, objectives or goals. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Further information regarding risks and uncertainties which may cause results to differ materially from those projected in forward-looking statements, are included in filings by the Company with securities regulatory authorities. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company does not undertake to update any forward-looking statement that may be made from time to time except in accordance with applicable securities laws. References may be made in press releases to historic mineral resource estimates. None of these are NI 43-101 compliant and a qualified person has not done sufficient work to classify these historic estimates as a current mineral resource. They should not be relied upon and Quaterra does not treat them as current mineral resources.
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