Solomon Options Annie IOCG Project to Peregrine Diamonds Ltd.

Solomon Resources Limited is pleased to announce that it has signed an agreement granting to Peregrine Diamonds Ltd., a private company located in Vancouver, BC, an option to acquire up to an 80% interest in its Annie iron-oxide copper gold (IOCG) project in Region III of Chile. The 6,050 hectare Annie property is located 40 kilometres south of Copiapo in northern Chile and 30 kilometres west of the Phelps Dodge Candelaria copper-gold mine. The Annie Project is located along an 18 kilometre section of the Atacama Fault system, which is a 400 kilometre regional system of sub-parallel ductile shear zones associated with Anglo American’s Manto Verde IOCG deposit roughly 120 kilometres to the north, Phelps Dodge’s Candelaria IOCG deposit roughly 25 kilometres to the east and large iron-oxide deposits, including Cerro Iman directly on trend from Annie, 30 kilometres to the northeast. The Annie Project area is highlighted by numerous copper-gold prospects along its length, including the Restauradora mine where production was halted in sulphide ore. In addition, Solomon’s 2004 drill program on its Santa Candelaria II 1/5 exploitation claim 7km on trend to the northeast was successful intersecting significant mineralization in all three holes, including a 19m (134.3m-153.3m) interval grading 0.280 g/t Au and 0.608% Cu in hole SC04-02. The Annie Project is comprised of 38 claims held by the Company’s Chilean subsidiary Solomon (Chile) SCM, including: Nine 100% Solomon owned Annie exploration claims; The 100% Solomon owned Santa Candelaria II 1/5 exploitation claim; Three Rey Salomon exploration claims and three Rey Salomon exploitation claims, a 100% interest optioned by Solomon in 2004 from Mr. Rolf Sommer of Chile; and, Ten Barros Luco exploration claims and 12 Barros Luco exploitation claims, a 100% interest optioned by Solomon in 2004 from Mr. Octavio Berrios and Mr. Hugo Garcia, both of Chile. Peregrine’s immediate plans are to extend the Annie magnetic and IP ground geophysical surveys grids to the south over the new claims. Geophysical crews are prepared to commence work immediately. The primary anomaly areas will be tested by reverse circulation drilling. Peregrine can earn a 60% interest in the Annie project by spending a total of C$300,000 over three years and assuming all underlying maintenance costs and options payments. Peregrine can earn an additional 20% in the project by sole funding the project through to completion of a feasibility study. Funding of the joint venture will be undertaken by the partners on a proportional basis, with conversion of a 5% residual interest to a 1.5% Net Smelter Return royalty, which may be purchased by the majority holder for $1,000,000. Under the agreement Peregrine assumes the obligation to pay the owners of the Rey Salomon and Barros Luco claims US$2,000,000 over four years by fulfilling the following terms: US$5,000 on signing (paid by Solomon); US$10,000 on six months after signing (paid by Solomon); US$35,000 on or before the first anniversary (due June 21, 2005); US$100,000 on or before the second anniversary; US$250,000 on or before the third anniversary; US$1,600,000 on or before the forth anniversary. The underlying Rey Salomon and Barros Luco option agreement requires converting the original Rey Salomon and Barros Luco exploration claims to exploitation claims. This work is ongoing and Solomon has completed conversion of more than half of the claims. The Rey Salomon and Barros Luco owners maintain a 2% Net Smelter Return royalty, which may be purchased at any time for $1,000,000. On Behalf of the Board of Directors of SOLOMON RESOURCES LIMITED “Ron Netolitzky”, Director Contact Information Larry Nagy, CEO Phone: 604-669-6656 Fax: 604-684-9877 Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. < Prev   Next >