Friday October 2, 6:33 pm Eastern Time
Company Press Release
Corporate and Project Clarification
NORTH VANCOUVER, British Columbia--(BUSINESS WIRE)-- Oct. 2, 1998--It has come to the Company's attention that between June, 1996 and April, 1998 that its presentation and categorization of certain technical and other information in the press releases referred to below relating to its interest in the Rushan mineral concession located in the Republic of Tajikistan either could be considered or was inaccurate, incomplete or unproven.
The Rushan mineral concession consists of an area of approximately 400 square kilometers in which the Ikar, Huff and Barch deposits are located. These deposits are outcropping and projecting over an area of approximately 1.5 square kilometres, 12 square kilometres and 8 square kilometres in size, respectively.
Press releases dated August 5, 1997, August 12, 1997 and September 2, 1997, which refer to the 400 square kilometre concession as ''a 400 square kilometer deposit'' are in error and are retracted.
The company is currently at the exploration stage. Exploration activity on all properties, conducted during 1975 to 1977, and taken from the Report on Exploration and Economic Evaluation Conducted in the Vicinity and Deep Horizons of the Ikar Deposit for 1975 to 1977 by the Department of Geology, U.S.S.R. (the ''1978 Report''), consists of 55 diamond drill holes, (34 underground on Ikar) 7,471 metres of trenching (2,183 on Ikar), 2,354 metres of underground development (2,138 on Ikar), 5,714 metres of underground drilling (all on Ikar) and 3,884 metres of surface drilling (1,514 on Ikar). An additional 1239 metres of trenching was conducted by the Company on the Ikar
deposit in 1997.
Exploration activity reported in press releases dated October 24, 1996, April 24, 1997, August 5, 1997, January 23, 1998, February 12, 1998 and February 26, 1998 is retracted.
In 1997 the company retained Kilborn Engineering Pacific Ltd. to carry out a verification of the existing database of the Ikar deposit (as compiled in the 1978 Report). A team of Kilborn engineers visited the Ikar Deposit for this purpose. Kilborn provided its report to the company on February 16, 1998.
Press releases dated February 24, 25 and 26, 1998 and April 16, 1998 quoted certain passages in part from the Kilborn Report all of which were taken from section 7.3 ''Check Assay Program'' and section 8 ''Conclusions''. To ensure that the passages quoted fairly represent the conclusions of the report, those passages of the Kilborn Report
which were quoted in part are reproduced below in their entirety:
''7.3 CHECK ASSAY PROGRAM
Based on the results from the check assay program, Kilborn concludes the following:
-- During the site visit Kilborn recognized the presence of extensive mineralization on surface and in underground workings. Assay results confirmed the existence of tungsten, gold, silver, copper, and cobalt
at the Ikar site. Kilborn's mandate to verify the Russian-Tajik database and geology can be considered successful, although the accuracy of the Russian-Tajik database cannot be verified at this stage.
Consequently, Kilborn cannot verify the resource estimate completed in 1978;
8.0 CONCLUSION
Based on observations from the Ikar site visit, a review of a part of the Pamir Expedition 1978 Report and encouraging results of check assaying and collection programs, Kilborn recommends that IMC proceed to the second stage of the exploration program for the Ikar deposit. Although some of the check assays did not correlate well with the existing data, the assays were of the same order of magnitude.
To date, Kilborn has not identified any basis to suspect that the existing Russian/Tajik (sic. Soviet/Tajikistani) data is inaccurate.
The type and amount of recommended exploration work should be outlined in a manner that will aim at reclassification of the known inferred resources into either measured or indicated categories and increase a confidence level in estimated grades of the Ikar deposit. Upon successful completion of the second stage of the exploration program the possibility of increasing the known resources of the deposit, which presently is open at depth and in the north-south directions, should be investigated together with selected scoping level metallurgical testing.''
The Kilborn Report stated that the Soviet classification of the Ikar deposit as ''C-2'' in the 1978 Report roughly compares with the ''indicated and inferred'' resource categories according to United States standards. Other deposits are at a preliminary stage of exploration. Press releases dated July 19, 1996, October 24, 1996 and February 12, 1998 reported estimates of mineralization in
the Ikar deposit taken from the 1978 Report and excerpts and summaries translated in Tajikistan (the ''1978 Summaries''). Estimated tonnage reported was 3,062,000 tons with the following average grades and mineralization:
Gold 5.6 grams/ton 549,000 ounces
Silver 4.7 grams/ton 14,463 tonnes
Cobalt .126 percent 3,900 tonnes
Tungsten .52 percent 15,900 tonnes
Copper .24 percent 7,500 tonnes
The estimate of an additional one million ounces of gold in the ''probable to possible'' category appearing in the July 19, 1996 press release has not been verified and is therefore retracted.
The estimate of an additional 534,000 ounces of gold in the inferred category appearing in the August 15, 1996 press release refers to mineralization in the Ikar, Ikar left bank and Huff deposits, however, it does not include mineralization which may or may not be present in the 8 kilometer distance between the Ikar and Huff workings.
NOTE: Reporting of the mineralization referred to above and use of the word ''resource'' may not meet United States Securities and Exchange Commission guidelines applicable to registrants. These guidelines permit the disclosure of only those mineral deposits which a company has determined may be mined at a profit (and are thereby known as ''reserves'' as distinguished from ''resources'' for which no such determination has been made). While the company is not a registrant the reader is nonetheless cautioned that no current and thorough
feasibility study, using North American standards has been completed and therefore no determination has been made on whether or not the mineralization referred to above may be mined at a profit.
With respect to the Barch deposit, estimates of grade and mineralization (274 million tons of 52 per cent Fe) taken from the 1978 Report and the 1978 Summaries, appearing in press releases dated November 16, 1996, August 5, 1997 and March 11, 1998 represent preliminary exploration results only and are therefore retracted.
Reference to 1% copper in the March 11, 1998 press release has not been verified and is therefore retracted. Reference to this deposit as an ''ore deposit'' taken from the 1978 Report and the 1978 Summaries, disseminated in press releases dated August 5, 1997, November 6, 1997, November 18, 1997, February 24, 1998 and March 11, 1998 is in error and is retracted.
Press releases dated July 19, 1996, January 23, 1998, February 17, 1998, February 24, 1998, February 25, 1998 and March 6, 1998 refer to a hypothesis that the mineralization between the Ikar and Huff deposits may be continuous over the approximate 8 kilometre length between the two deposits. While the 1978 Report supports this hypothesis, only preliminary exploration has taken place. As a result, further exploration is required to evaluate this hypothesis.
Press releases dated April 14, 1997, October 1, 1997 and October 16, 1997 described the deposits in the Rushan concession as ''world class''. Current geological information is not sufficient to support this statement. It is therefore retracted.
An economic analysis of the Ikar deposit, prepared by the six authors of the 1978 Report, appeared in the 1978 Report. In early 1988, a summary economic analysis of the Ikar deposit was prepared by Tajik geologists, based on Russian information. However, no current and thorough economic analysis, using North American standards, has
been completed on any of the deposits.
As a result, use of the words ''ore'' (appearing in press releases dated July 19, 1996, August 5, 1997, August 12, 1997, September 2, 1997, October 1, 1997, October 20, 1997, November 6, 1997, November 18, 1997, February 24, 1998, February 26, 1998, March 11, 1998 and April 16, 1998), ''proven reserves'' (appearing in press releases
dated July 12, 1996, July 19, 1996, and April 14, 1997), ''reserves'' (appearing in press releases dated October 1, 1997 and February 12, 1998) and reference to ''commercially attractive volumes'' of mineralization (appearing in the April 14, 1997 press release) are in error and are retracted. As no current feasibility study has been completed, no ''ore'' or ''proven reserves'' have been delineated on the properties.
The November 15, 1996 press release reports assays of seven random surface samples collected by Mr. Frank Cameron, P. Eng., then employed by the company, taken during a trip to Tajikistan in October, 1996. The locations from which these samples were taken have not been ascertained, the samples have no technical descriptions available,
and cannot be taken as defining a mineralized zone.
Mr. Cameron was erroneously described as a geologist in the October 24, 1996 press release. The company therefore does not consider the assay information to be reliable in estimating the mineralization in the Rushan concession and retracts it.
Similarly, reference to Mr. Cameron's work and resulting grade and resource figures disseminated in press releases dated October 24, 1996, November 15, 1996, April 14, 1997, September 2, 1997, October 1, 1997 and undated Release No. 3, are retracted.
In September, 1996, Frank Cameron gave a public interview in Tajikistan in which he made certain statements regarding the investment the Company would make to develop the properties and the economic impact the investment would have on local employment and economic development. These statements are not supported by any economic analysis or feasibility study and are therefore retracted.
The November 15, 1996 press release refers to the ''compilation'' of certain geological information from Russian documentation by a registered Canadian geologist. The ''compilation'' refers only to the geological information immediately below the reference and not to other geological information in the press release. Further, the information refers to mineralization of the Ikar deposit, not in ''zone No. 1 - southernmost zone'' as the press release incorrectly
states.
The grades referred to in zone No. 3 (so-called) of the November 15, 1996 press release refer to the average grades obtained from zone 14, which are the highest average grades of 18 zones in the Ikar deposit.
''In Situ'' Valuations
Press releases dated November 15, 1996, April 14, 1997, March 6, 1998 and March 11, 1998, reported ''in situ'' or gross metal values, separately and aggregated, ranging from $500 million to $74 billion.
These values do not represent an estimate of net cash value, if any, which can only be estimated after mineralization has been proven through further exploration and a study to determine economic viability (which would consider costs of extraction, processing, transportation and the period over which the resource would be mined) has been completed.
More particularly, $5 billion gross metal value on the Barch deposit reported in the March 11, 1998 press release is based on tonnage and grade estimates that are preliminary only and is therefore retracted.
The $74 Billion ''in situ'' estimate was taken from the press release dated April 14, 1997 and the business plan authored by Mario Polak, P.Eng., dated for reference May, 1997 (the ''Report''). The Report and the press release are in error in that both are based on ''proven reserves'' and grades which are substantially in excess of those inferred and indicated resource estimates referred to above, which are retracted.
More particularly, the reserve estimates are based on the assumption that there is some continuity in the mineralization between the three deposits referred to above. This assumption has no basis and is retracted. As a result, the estimated reserves of 1.25 billion tons of tungsten on which the Report and the press release are based and which also appeared in the press releases dated October 1, 1997, are retracted.
Further, the grades used in the Report incorporated the assays of samples taken by Frank Cameron which, for the reasons stated above, are not considered to be reliable.
The Report has not been used by current management and the ''in situ'' estimate set out in the April 17, 1997 press release is retracted.
Reference to Shipping/Production Dates
Press releases dated August 14, 1997, October 1, 1997, October 20, 1997, November 6, 1997, November 7, 1997, November 18, 1997, December 10, 1997, and January 23, 1998 either state or might be interpreted as implying that Ikar either had or will have mining operations. Ikar is an exploration stage company and does not have any mining operations.
Press releases dated October 1, 1997 and October 20, 1997 refer to a target date of May, 1998 for shipment of tungsten ''ore''.
The Company set this target date after receiving information from Rokhmonbek Bakhtdavlatov, Deputy Minister and Chief Engineer of Pamir Geological Expedition, Tajikistan, in September, 1997 that the mineralized rock which had been removed from tunnels and adits had been stockpiled and would be available for shipment to a processing facility once weather permitted (the following May, 1998).
This information was not intended to imply that mining operations were to be or had commenced. The company has postponed any shipments until an evaluation of the net value, if any, of shipments can be ascertained.
Summary
Ikar Mineral Corp. (OTC BB: IKAR - news) is an exploration stage company. It has not yet conducted a feasibility study or otherwise determined whether any of the deposits may be mined at a profit. ''Ore'' or ''proven reserves'' have not yet been defined on any of the deposits within North American standards.
Similarly, estimates of gross metal value disseminated in certain press releases do not represent an estimate of net cash value.
References to prospective production dates, whether for waste dump or otherwise, were premature and are retracted.
The conclusions of the Kilborn Report were encouraging in that Kilborn did not identify any basis to suspect that the existing Soviet and Tajikistani data (showing significant tungsten mineralization) was inaccurate.
The Company is planning to follow the recommendations of the Kilborn Report by continuing its exploration activity to increase its confidence level of estimated grades of the Ikar deposit. Particulars of the exploration program to be conducted will be reported in a separate press release.
Contact:
Ikar Mineral Corp., North Vancouver
Investor Relations Dept., 604/986-9961 or 888/322-4527 |
