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Queensland Minerals Ltd. reported yesterday that they have entered into a non-binding letter of intent with Dundee Precious Metals Inc. a Toronto Stock Exchange listed company (TSX: DPM), to acquire DPM's right, title and interest in mineral licenses related to the Surdulica molydenum project, the Tulare copper and gold project and the Karmanica gold project located in Serbia (hereinafter referred to as the "Serbian Assets") and all other associated assets and liabilities.
Dundee Precious Metals has been actively exploring in Serbia since 2004 and is the largest holder of mineral exploration properties in the country. The Serbian assets consist of six exploration licence agreements amounting to 347 square kilometres in area and are located in south eastern and southern Serbia. The exploration licence agreements are currently renewed on an annual basis. Exploration targets within the licences include porphyry molybdenum deposits, porphyry copper-gold deposits and epithermal gold deposits.
The Surdulica molybdenum-rhenium porphyry system of southeast Serbia lies within the southeast portion of the Alpine-Balkan-Carpathian-Dinaride (ABCD) orogenic belt of the Western Tethyan and is the largest primary molybdenum porphyry system within Europe. Systematic resource definition drilling by DPM during 2007/2008 has defined an Indicated Mineral Resource of 22mt at 0.05% Mo and an Inferred Mineral Resource of 125Mt @ 0.05% Mo (0.03% Mo cut-off grade), as at April 20, 2009, to a maximum vertical depth of approximately 250m. The definition drilling was conducted on approximately 40% of the main system 'footprint', as defined by soil sampling and surface trenching. Exploration has outlined a large lozenge-shaped porphyry system extending across an area of 4.3km x 2.5km with a current vertically defined extent in excess of 600m. The mineralisation is open in multiple directions and the mineralization at the periphery of the drilled holes is strong. Primary molybdenum mineralization is associated with multiple phases of stockwork and sheeted quartz-molybdenite veining. Hydraulic fracturing and veining occurs in rigid silicified zones within the dacite or metamorphic basement rocks on the outer carapace of irregular-shaped intrusive dacite stocks in association with intense potassic and phyllic alteration. Metallurgical testwork to date has resulted in 85% Mo recovery to a 52%-55% Mo concentrate with rhenium co-product and no deleterious elements present. Mineral resources were estimated according to Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects of December 2005 ("NI 43- 101") and the classifications adopted by the CIM Council in December 2005 based on 31,177.7m of diamond drilling and 8,881m of reverse circulation drilling for 178 drill holes with an average depth of 218.7m. A further 15,069.4m of surface trenching has also been carried out within 231 trenches. Molybdenum grades determined using uniform conditioning into a 3D block model using a parent block size of 40m x 40m x 10m with a SMU (Selective Mining Unit) of 10m x 10m x 10m.
The Tulare copper-gold porphyry is located in southern Serbia within the southern portion of the Lece Volcanic Complex. Historic exploration drilling by the Serbian State has outlined a significant occurrence of typical copper-gold porphyry stockwork mineralisation over an approximate area of 1,000m x 1,000m which outcrops at surface and remains open to the south. Initial metallurgical testwork provided encouraging results with recoveries of copper at approximately 90% and gold of approximately 88%.
The Karamanica Au Project is an early stage epithermal gold occurrence which was discovered by DPM through systematic stream sediment sampling within southern Serbia. Initial surface trenching has provided encouraging results to date, with wide, continuous gold intercepts over 400m of strike, with mineralisation open in all directions. A further three exploration licences are located between Surdulica and Karamanica and represent early stage exploration projects which to date have been subjected to systematic stream sediment sampling with limited follow-up exploration activity of anomalous drainages.
The independent Qualified Persons responsible for the mineral resource estimate are Doug Corley BApp Sc, BSc (Hons IIA) MAIG, Associate Resource Geologist and Paul Mazzoni BSc (Hons), MSc, MSEG, FAusIMM, Chief Geologist of Coffey Mining Pty. Ltd. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. A technical report in support of the above disclosure will be prepared and filed on SEDAR subsequent to this press release within the required regulatory deadline for filing such report in accordance with NI 43-101.
Except as stated in the previous paragraph, Julian Barnes is the Qualified Person under NI 43- 101 who has reviewed the technical disclosure with respect to the Serbian Assets contained in this press release. Julian Barnes is employed by DPM and is not otherwise related to Queensland.
Upon completion of the Transaction, the Company will be a TSXV-listed mining issuer whose principal properties will consist of the Serbian Assets.
Dundee Precious Metals still needs to obtain Serbian government approval for the Reorganization and the Transaction and Queensland needs to complete financing of at least $10,000,000, among other terms and conditions that need to be completed.