April 29, 1999
JABA ANNOUNCES JOINT VENTURE ON EAST SILVER BELL PORPHYRY COPPER PROJECT, ARIZONA
JABA Inc. is pleased to announce that it has signed a binding Exploration and Option Agreement with Kennecott Exploration Company to participate in a joint venture on JABA's East Silver Bell project in the Silver Bell Mining District in southeastern Arizona. The Silver Bell District has a past production of 81.8 million metric tons at a grade of 0.73% copper. The district has been continuously mined by ASARCO for more than 45 years. The East Silver Bell property adjoins the ASARCO property and overlies the east extension of the Silver Bell District.
The East Silver Bell property was the subject of a joint venture in 1998 between JABA and Valerie Gold Resources Ltd. Although that joint venture was terminated by Valerie, results of drilling suggested the possibility of an enriched copper sulfide zone (chalcocite blanket) below the level of drilling. Six holes totaling 4,000 feet were drilled using the reverse circulation (RC) method. The deepest hole was 1,080 feet, the shallowest 520 feet. Consulting geologist Russell Babcock (former Chief Geologist for Kennecott), after reviewing the Venture's drill holes, stated "There is little doubt that a porphyry system is present - good phyllic (sericitic) alteration, a two-cycle leached capping consisting of geothitic limonites over hematitic limonites,..."
The JABA/Kennecott joint venture will further explore these findings including a drilling program whereby a single hole will be drilled to the lesser of 2,000 feet or the shallowest depth at which a majority of the rocks are unoxidized plus an additional 200 feet. It is planned that the drill program will start within 30 days of commencement of the agreement, which agreement, unless terminated by either party, shall run for a term of five years.
Kennecott has an option to purchase the property or any part thereof on an escalating scale as follows:
Notice Date - Purchase Price
Within 90 days -US$250,000
Within 91-180 days -US$500,000
Within 181-270 days -US$750,000
Within 271-365 days -US$1 million
Within Year 2 -US$2 million
Within Year 3 -US$3 million
Within Year 4 - US$4 million
Within Year 5 -US$5 million
In the event of Kennecott exercising such option JABA will be entitled
to a ten percent (10%) Net Proceeds Royalty, such Royalty being capped
at US$4 million. During the first year of the Agreement Kennecott will pay JABA a monthly amount of US$2,500 which sum will increase to
US$5,000 per month for the remaining term. In addition Kennecott will
pay JABA US$5,000 immediately and will be responsible for payment or
reimbursement to JABA for all property fees and the like so long as the Agreement remains in force. Kennecott has the right to terminate the Agreement by giving formal notice of one month.
JABA feels that this agreement with Kennecott, a subsidiary of Rio
Tinto, the largest mining company in the world, is indicative of the
quality of its mineral targets resulting from JABA's thorough and
innovative geologic exploration programs over the last several years.
JABA continues to actively seek Joint Venture partners for its other
properties in the Southwestern United States and Northern Mexico.
On behalf of the Board of Directors,
James A. Briscoe, Chief Executive Officer
The Alberta Stock Exchange has neither approved nor disapproved the
information contained herein.
--
Mardee S. Briscoe
Vice President/Business Mgr.
JABA (US) Inc.
2766 N. Country Club Rd.
Tucson, AZ 85716
(520)327-7440 voice
(520)327-7450 fax
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