CALGARY, Alberta, Jan. 5 /PRNewswire-FirstCall/ -- The following was released on behalf of the Board of FEC Resources Inc, by Larry W. Youell, President and CEO: FEC RESOURCES INC. (BULLETIN BOARD: FECOF, Frankfurt/Munich: FE8) ("FECR" or "the company") is pleased to report the company has concluded an agreement to acquire a 40% interest in a mining project in the Philippines in partnership with Philex Gold, Inc. (TSX Venture: PGI) ("PGI").
The project concerned is the Mining and Production Sharing Agreement ("MPSA") between PGI and the Government of the Philippines, which is identified as MPSA #148-99-XIII ("MPSA148"), comprising 2306 Hectares in the province of Surigao, Mindanao. The Company has been evaluating the project for some time in pursuance of the company's stated objective of seeking world class mining projects on commercially attractive terms.
As part of the evaluation of this opportunity the company commissioned an independent geological and technical report from a firm of technical experts who are registered as Qualified Persons for reporting to the major Stock Exchanges in the United States, Canada and the United Kingdom.
The evaluation obtained by the company is for the Lascogon Gold Prospect which is contained within the 2306 Hectare acreage of MPSA148. The area is mainly comprised of limestones intercalated with mudstones, siltstones and shales and follows the main attitude of the Philippine Fault oriented northwest to southeast. Along this direction, numerous test pits have been dug through the sediments and samples of the sediments and the surface jasperoid boulders have been obtained. Assays reveal gold grades ranging from 1.0g/t to 64.0g/t, whilst assays on the mineralized sediments reveal grades consistent with Carlin-type deposits.
The company has acquired the interest in MPSA148 by way of assignment from Indexa Corp. to FECR of an Agreement between Indexa and PGI. Indexa is a Philippine corporation who had entered into a sole Agreement with PGI for the rights to a joint exploration program. Indexa has assigned its rights and obligations in their entirety to the company, pursuant to which a new Philippine Joint Venture Company is to be formed of which the company will initially own 40% and Philex Gold Inc. will own 60% equity interests respectively.
The commitments of the company in this regard are to provide an initial US$250,000 signature bonus to PGI and then for the company to contribute to the Joint Venture Company a total of US$1,000,000 from January 1st 2006 through to October 31st 2006 being estimated as sufficient funding to complete the planned exploration and prospect delineation work program on the 100 Hectare Lascogon Gold Prospect which is contained within the 2306 Hectare acreage of MPSA148.
Upon completion of the planned exploration program, the company has the option to increase its equity interest in the Joint Venture Company to 60% by arranging or contributing by way of repayable loan up to US$10,000,000 as the initial contribution to mine development and production by the Joint Venture Company.
To secure the rights to the project as described above the company has the sole right to appoint a qualified independent international firm of experts to evaluate the benefit of the assignment of the agreement between Indexa and PGI, such evaluation to be based on an arm's length present value open market basis and which must be completed by March 31, 2006. Any consideration due to Indexa Corp. from FECR pursuant to the foregoing shall be settled by FECR within 30 days of receipt of said report being in the form of newly issued fully paid shares of FECR, cash or a combination of both.
Statement from Larry W. Youell, President & Chief Executive Officer
"In line with our objective of pursuing relatively low risk mining opportunities in the Philippines we are delighted to have been able to secure this substantial mining interest on commercially competitive terms in the face of intense competition from numerous other interested parties."
"The Lascogon Prospect is situated within a known, and established gold bearing and producing province, in an area with an existing infrastructure and locally available ore processing facilities. We are pleased to be working on this project with Philex Mining Corporation; a long established and publicly quoted leading mining company in the Philippines. Furthermore the technical and production expertise of Philex Mining Corporation will be made available to our joint venture company thus providing proven technical resources."
"We very much look forward to working on this new project, and further information will be released as soon as it is available."
This release contains "forward looking statements" as per Section 21E of the US Securities and Exchange Act of 1934, as amended. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Management is currently reviewing many options and there is no assurance that they will not make decisions other than those now contemplated. The Company is subject to political risks and operational risks identified in documents filed with the Securities and Exchange Commission, including changing and depressed oil prices, unsuccessful drilling results, change of government and political unrest in its main area of operations.
For more information please contact Larry Youell at 1-403-290-1676, e-mail
