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VANCOUVER, BRITISH COLUMBIA–(Marketwire – Sept. 12, 2011) – OroAndes Resource Corp. (TSX VENTURE:OAR) (the “Company”) is pleased to announce that it has entered into an agreement (the “Purchase Agreement”) with Eastfield Resources Ltd. (TSX VENTURE:ETF) (“Eastfield”) to acquire (the “Proposed Acquisition”) a 100% interest in the Kilometre 26 Property (the “Property”). The Property is comprised of 22 map staked mineral claims covering 9,819 hectares located in the Omineca Mining Division of British Columbia, in which the Company has had an option to acquire from Eastfield a 60% interest since September 2009, when it commenced exploration of the Property. The Purchase Agreement provides that the option agreement between the Company and Eastfield related to the Property and all of the obligations on the part of both the Company and Eastfield under the option will terminate upon closing of the Proposed Acquisition. The parties have also extended the Company’s obligations to make cash and share payments and incur exploration expenditures on the Property from September 21, 2011 to December 21, 2011.
The Purchase Agreement provides that the Company will, subject to receipt of shareholder approval and acceptance by the TSX Venture Exchange (the “Exchange”), issue to Eastfield 20,000,000 common shares in the capital of the Company (the “Payment Shares”) and Eastfield has agreed that it will, forthwith upon expiration of the four month and one day hold period from the date of issuance of the Payment Shares, distribute the Payment Shares to Eastfield’s shareholders pro-rata in accordance with the number of common shares of Eastfield held by each such shareholder.
The Proposed Acquisition and the creation of Eastfield as a temporary new “Control Person” (as that term is defined by the policies of the Exchange) as a result of issuance of the Payment Shares must be approved by the Company’s shareholders. To that end, the Company has called an annual and special shareholder meeting for Friday, October 28, 2011, at which meeting shareholder approval will be sought. The Company also intends to seek shareholder approval of the change of its name to “Fort St. James Nickel Corp.”. There can be no assurance that the Company’s shareholders will approve the Proposed Acquisition or the name change.
Further detail with respect to the Proposed Acquisition, including the Company’s analysis as to valuation of the Property, will be included in the Company’s Information Circular prepared for the shareholder meeting, which Circular will be mailed to the Company’s shareholders and electronically filed with regulators on or about Tuesday, October 4, 2011, after which it will be available for viewing through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com under the Company’s Issuer Profile.
The Company will be making a formal submission to the Exchange for acceptance of the Proposed Acquisition, subject to receipt of shareholder approval. Pursuant to the policies of the Exchange, Eastfield is required to make a submission to the Exchange for acceptance of the proposed distribution of the Payment Shares to the Eastfield shareholders. There can be no assurance that final Exchange acceptance of the Proposed Acquisition and/or the distribution of the Payment Shares by Eastfield to the Eastfield shareholders will be given.
As the Company and Eastfield share a common director, J.W. (Bill) Morton, who is also the President of Eastfield, the Proposed Acquisition is “Non-Arm’s Length” as that term is defined in the policies of the Exchange.
The Company has commissioned an independent NI 43-101 compliant technical report titled “NI 43-101 Technical Report on the Kilometre 26 Property, Omineca Mining Division, B.C. With Recommendations for Continuing Exploration”, dated September 1, 2011, as prepared by Christopher H. Cherrywell, B.S., CPG, and Richard C. Capps, PhD, CPG, RPG. The technical report recommends a $534,000 exploration program, to continue exploration for economic mineralization on the Kilometre 26 Property. It is proposed that work be directed at drill targets, located on the present gridded area and that additional gridding be established to pursue extend geophysical and geochemical surveys to the west of the existing grid. Proposed work includes additional soil sampling, induced polarization, prospecting and geologic mapping, excavator trenching, and drilling. The Report will be electronically filed with regulators in due course and will then be available for viewing on SEDAR under the Company’s Issuer Profile.
Further detail with respect to recent exploration work conducted on the Property is available in the Company’s news releases, which have been electronically filed with regulators and are available for viewing on SEDAR under the Company’s Issuer Profile.
About the Kilometre 26 Property
The Kilometre 26 Property, located 50 kilometres to the northwest of Fort St. James, British Columbia within the Omineca Mining Division, is a gold exploration project situated on the postulated main break of the Pinchi Fault, one of the pre-eminent structural features in central British Columbia, extending in a north-south orientation for more than 450 kilometres. The Pinchi Fault is often cited as being analogues to the Melones fault located in the Motherlode district in California. Exploration on the Kilometre 26 Property has identified the existence of two mineralization target types; serpentinite-hosted nickel mineralization and Motherlode style (ophiolite gold) mineralization constitutes a secondary objective.
Grid establishment on the Kilometre 26 project started in 2009 and continued in 2010. A total of 26 kilometres of geophysical survey has been completed and a total of 865 soil samples and forty eight rock samples collected and analysed from which fifteen samples of mineralized serpentinite have been examined using electron microscope techniques. Examination using an electron microscope has indicated that metallic minerals present are overwhelmingly dominated by awaruite (a nickel alloy) and pentlandite (a nickel sulfide).
The 2011 exploration program was initiated during the third week of May. Work has entailed expanding the cut grid on the property followed by magnetometer and induced polarization surveying as well as soil sampling. Geologists spent approximately five weeks mapping the property, utilizing the cut grid and sampling new exposures (rock and rubble) of ultramafic and carbonate rock. Highlights of rock samples collected and analyzed included twenty that returned analysis ranging between 0.19% to 0.25% nickel. The geophysical survey, (approximately 36 line kilometres) has extended the strike length of the strong magnetic anomaly (believed to be serpentinite) to more than 4.5 kilometres. This anomaly is thought to be the source of much of if not all of the nickel mineralized rubble that has been located on the property. A separate magnetic feature is indicated several kilometres further to the west which likewise appears to have dispersion train of mineralized serpentinite. Approximately 600 soil samples were collected and are currently being analyzed.
The Company has now engaged the services of an international metallurgical organization, with expertise in the recovery of nickel alloy and sulphide from ultramafic rocks, to develop a testing strategy for the Kilometre 26 project. It is anticipated, if the exploration phase is successful, an operational extraction routine that could form part of a commercial process will be completed. Testing will entail using magnetic separation techniques from mineralized samples collected in the current program.
All permits are in place and diamond drilling of an initial 12 targets is anticipated to begin during September, 2011.
J.W. (Bill) Morton P.Geo, a Qualified Person for the purposes of National instrument 43-101, has read and taken responsibility for this news release.
