Aurelio Announces Agreement to Sell Hill Copper-Zinc Project & 3% ...

Tag : zinc
Aurelio Resource Corporation (OTCBB:AULO)(Frankfurt:F3RA) announcedtoday that it has executed an agreement to sell its BolsaResources, Inc. subsidiary which owns the Hill Copper-Zinc Projectin Arizona (the "Project") for $2 million in cash while retaining a3% NSR (Net Smelter Return) to an Investment Company; in additionthe Investment Company has agreed to purchase a 3% NSR for theCompany's Gavilanes gold project in Mexico in exchange for $2million in cash.

Sale of Bolsa Resources, Inc. & Hill Copper-Zinc Project

The Company has executed an agreement to sell its wholly ownedArizona subsidiary, Bolsa Resources, Inc., to the InvestmentCompany in exchange for $2,000,000 cash; Aurelio would retain a 3%Net Smelter Returns Royalty (NSR) on all future precious and basemetal production from the Project (the "Bolsa NSR").

The proposed transaction requires the Investment Company tocomplete a Bankable Feasibility Study within the next four years;should the Investment Company fail to complete the FeasibilityStudy or otherwise maintain the 5,000+ acre land position, Aureliowould have the exclusive right to re-acquire the Project undercertain conditions.

Upon completion of the Bankable Feasibility Study, the InvestmentCompany would have a right to purchase the Bolsa NSR at fair marketvalue.

Sale of 3% NSR in Gavilanes (Mexico) Project

The Investment Company has also agreed to purchase a 3% NSRinterest in the Gavilanes gold project for $2,000,000 cash("Gavilanes NSR"). The Company would retain the exclusive right torepurchase the Gavilanes NSR at fair market value.

Bridge Loan Agreement

As part of the overall transaction, the Investment Company advanced$2,000,000 to the Company in the form of an interest-free BridgeLoan that will be repaid upon the closing of the proposedtransactions. The Bridge Loan is secured by all of the assets ofthe Company, including all shares of stock held by the Company inits two subsidiaries. If the sale of Bolsa Resources does notclose, the Bridge Loan is payable in cash, with the date of paymentdependent upon the reason the Sale fails to close.

Proceeds from the transactions will be used to retire existingCompany indebtedness and for working capital purposes.

Completion of the transactions is expected in the fourth quarter of2008 and is contingent on approval by Aurelio shareholders andother customary closing conditions set forth in the transactiondocuments. Aurelio has not yet announced a date for its shareholdermeeting.

Complete copies of the transaction documents are available forreview as exhibits to a Current Report on Form 8-K filed with theU.S. Securities and Exchange Commission.

About the Company

Aurelio Resource Corporation has previously announced anindependent estimate of the mineralized material at the MAN Area ofthe Hill Copper-Zinc Project totaling 63.8 million tons at anaverage grade of 0.56% copper-equivalent. Aurelio has also acquiredthe rights to explore, and an option to purchase, the Gavilanesgold porphyry deposit in Durango, Mexico.

For additional information, please visit our website(www.AurelioResource.com).

Legal Notice Regarding Forward Looking Statements

Statements in this news release that are not historical facts areforward-looking statements. Forward-looking statements arestatements that are not historical facts and are generally, but notalways, identified by the words "expects," "plans," "anticipates,""believes," "intends," "estimates," "projects," "aims,""potential," "goal," "objective," "prospective," and similarexpressions, or that events or conditions "will," "would," "may,""can," "could" or "should" occur. Information inferred from theinterpretation of drilling results and information concerningmineral resource estimates may also be deemed to be forward-lookingstatements, as they constitute predictions of what might be foundto be present when and if a project is actually developed.

Forward-looking statements in this news release include, but arenot limited to: that a majority of the Company's shareholders willapprove the sale of Bolsa Resources, Inc. and the Gavilanes NSR;that a portion of the funds to be received will be used to retireexisting Company debt, and that re-payment of such debt can becompleted on terms favorable to the Company and its shareholders;that, at some future date(s), the Investment Company might possiblyrepurchase the Bolsa NSR and/or that the Company could potentiallyelect to repurchase the Gavilanes NSR for cash and/or stock and/orother considerations; that the fair market vales of the NSRs wouldbe contingent on multiple factors outside of the control of theCompany and the Investment Company; that the Investment Companywill be able to finance and complete the Bankable Feasibility Studyfor the Hill Copper-Zinc Project within four years. Lastly, thereare no assurances that an economic ore deposit will be delineatedand developed at either the Hill or the Gavilanes projects, norshould investors assume that the Company will actually receive orpay out cash or in-kind metals in relation to the Bolsa orGavilanes NSRs.

It is important to note that the Company's actual outcomes maydiffer materially from those statements contained in this pressrelease. Factors which may delay or prevent these forward-lookingstatements from being realized include: that we may not be able toreach final agreement on definitive documents with the InvestmentCompany or other required parties, misinterpretation of data; thatwe may not be able to keep our qualified personnel; that fundsexpected to be received may not be; that our estimates of mineralresources are inaccurate; uncertainties involved in theinterpretation of drilling results and other tests and theestimation of resources; that we may not be able to get equipmentor labor as we need it; that we may not be able to raise sufficientfunds to complete our intended exploration, purchase, lease oroption payments; that our applications to drill may be denied; thatweather, logistical problems or hazards may prevent us fromexploration; that analysis of data cannot be done accurately and atdepth; that results which we have found in any particular locationare not necessarily indicative of larger areas of our property; andthat despite encouraging data there may be no commerciallyexploitable mineralization on our properties. Readers should referto the risk disclosures outlined in the Company's most-recent Form10-K (as amended per Form 8-K/A) and Form 10-Q Reports (as amendedper Form 8-K/A) filed with the Securities and Exchange Commission.