Bauxite (Al)

[Tackler]

Navasota to acquire La Societe AMIG for bauxite permit

2007-03-15 14:11 MT - News Release

Mr. James Gillis reports

NAVASOTA OPTIONS BAUXITE EXPLORATION PROJECT, REPUBLIC OF GUINEA, WEST AFRICA AND ANNOUNCES FINANCING

Navasota Resources Ltd. has concluded a formal option agreement dated Feb. 28, 2007, with La Societe AMIG Mining International SARL (AMIG) and its shareholders to earn and acquire up to 100 per cent of the issued share capital of AMIG. AMIG is a Guinean corporation and its shareholders are residents of Conakry, Guinea, West Africa, and are at arm's length to Navasota.

AMIG is the legal and recorded holder of a mineral exploration permit granted by the Ministry of Mines and Geology of the Republic of Guinea on May 10, 2006, covering two contiguous areas totalling 1,064 square kilometres, located in the prefectures of Telemele and Gaoual, for the exploration of bauxite.

Under the terms of the option agreement, Navasota has been granted an option to acquire an initial 45 per cent of the issued share capital of AMIG by incurring a minimum total of $2-million (U.S.) in expenditures on the project and by paying $350,000 (U.S.) to the AMIG shareholders, within a period of three years.

Once Navasota has exercised such option and thereby acquired 45 per cent of the issued share capital of AMIG, Navasota has the further option to elect to earn and acquire an additional 6 per cent of the issued share capital of AMIG (thereby increasing its percentage ownership of the issued share capital of AMIG from 45 per cent to 51 per cent). To exercise such further option, Navasota must incur all exploration and development expenditures necessary to complete and deliver to AMIG a bankable feasibility study in respect of the project and must issue one million of its common shares to the shareholders of AMIG.

Additionally, at any time after it has acquired 45 per cent of the issued share capital of AMIG, Navasota may elect to acquire all remaining issued shares of AMIG (thereby increasing its percentage ownership of the issued share capital of AMIG to 100 per cent) by paying $15-million (U.S.) and issuing 15 million of its common shares to the shareholders of AMIG.

The mineral exploration permit held by AMIG covers 1,064 square kilometres situated in the Boke bauxite belt of northwest Guinea. The Boke bauxite belt hosts the world's largest and highest quality bauxite deposits with grades of 40 per cent to 60 per cent aluminum oxide.

During a site visit undertaken in November, 2006, on behalf of Navasota, RSG Global Consulting determined that there are significant bauxitic plateaus within the permit area. Seven bauxitic laterite samples collected from two sites visited (Madina Diang and Kembera) were sent to SGS Lakefield in South Africa for analysis by XRF. Results are listed in the table below.

 
  
    BAUXITE GRAB SAMPLES 
  
 Sample ID    Al2O3     SiO2 
  
 NAVAMIG001    52.8%    1.69% 
 NAVAMIG002    48.6%    1.26% 
 NAVAMIG003    50.5%    0.67% 
 NAVAMIG004    41.4%    0.97% 
 NAVAMIG005    47.7%    0.75% 
 NAVAMIG006    53.7%    2.25% 
 NAVAMIG007    20.9%   27.00% 
 

These values are not representative without completing a first pass drilling program.

The permit area is located in a "very good neighbourhood" being directly surrounded by several of the world's major bauxite miners. Three refineries have been proposed for construction in the Boke belt in the next five years, all of which would be within close proximity to the AMIG permit area. As well, an existing railway line is located approximately 16 km from the site. This line is apparently commercially available and runs an additional 135 km to the port of Kamsar.

It is the opinion of RSG Global Consulting that the AMIG mineral exploration permit represents a very exciting opportunity to explore and potentially define a high-quality bauxite deposit in the richest bauxite province in the world. To that end, a first pass program consisting of 7,125 metres of aircore drilling at 600-metre by 600-metre spacing, covering 171 square kilometres, will assess the identified bauxite plateaus.

Navasota is also pleased to announce that it has arranged a non-brokered private placement of up to six million units, at a price of 20 cents per unit, for proceeds totalling up to $1.2-million. Each unit consists of one common share and one-half of one non-transferable share purchase warrant; each whole warrant will entitle the holder to purchase one additional common share at an exercise price of 30 cents during a period of one year from the closing date of the placement. If at any time after the first four months of the term of the warrants, the closing price for Navasota's common shares is equal to or greater than 50 cents per share for a period of 20 consecutive trading days, Navasota may deliver a notice to the holders of the warrants notifying them that they must exercise their warrants within 30 days from the date of such notice as otherwise the warrants will expire thereafter.

The proceeds of the placement will be used to further the exploration of Navasota's projects and for general working capital.

Shares acquired by placees, and shares which may be acquired upon the exercise of the share purchase warrants, are subject to a hold period and may not be traded in British Columbia until four months after closing of the private placement.

The option agreement and the private placement are subject to the acceptance of the TSX Venture Exchange.