April 7 2010 – Vancouver, British Columbia. Indigo Exploration Inc. (TSX-V: IXI) reports that it has entered into a non-binding Letter of Intent (the "LOI") to acquire (the "Acquisition") all of the issued and outstanding shares of Sanu Resources Burkina Faso SARL, ("Sanu Burkina") an indirectly owned subsidiary of NGEx Resources Inc. NGEx is a mineral exploration company listed on the TSX and which trades under the symbol "NGQ". The primary assets of Sanu Burkina consist of four gold mineral exploration permits in the Republic of Burkina Faso, West Africa. The consideration for the Acquisition is Cdn$65,000 and 3,000,000 common shares of Indigo at a deemed price of $0.15 per share, of which $30,000 was paid on signing of the LOI. The remaining $35,000 and the 3,000,000 common shares are due on execution of a definitive agreement and closing, respectively, of the Acquisition. The number of shares to be issued at closing will be subject to readjustment if the market price of the shares is less than $450,000, based on the 10 day average closing market price of Indigo’s shares on the TSX Venture Exchange (the "Exchange"). The proposed Acquisition will be subject to, among other things, the parties entering into a definitive agreement and to the acceptance of the Exchange.
The Burkina Faso property package consists of four exploration permits in greenstone belts that contain significant gold discoveries: Kodyel, Tordo, Lati and Loto. The four permits held by Sanu Burkina are government granted licenses. The following description of the four permits is summarized from the NGEx Resources Inc. Annual Information Form filed under the NGEx SEDAR profile.
Kodyel Exploration Permit
The Kodyel permit lies close to the Niger border approximately 300km east of Ouagadougou. Access is by paved road as far as Fada N’gourma about 200km east of Ouagadougou and thence by gravel roads.The Kodyel permit covers an extension of the Sirba greenstone belt that hosts the Samira Hill gold mine just across the border in Niger. The geology consists of meta-volcanics associated with meta-sediments which are affected by NE-SW shearing. Several artisanal workings occur within the permit, with the most significant being the Kodyel 1, CFA workings and Tounganga. Here a multiple, massive, quartz veins 1-5m wide cropping out over more than 400m have been worked by local miners since 1984 to a depth of over 7m. Highlights of grab samples of quartz from artisanal gold mining sites on veining, and alteration, within intermediate tuffs and highly altered, sheared and kaolinized felsic volcanics include 7 gpt Au and 9 gpt Au. A large part of the permit including the major Tounganga artisanal mining site remains unexplored.
The permit was held from 1995-1997 by SEMAFO who drilled over 493 RAB, 26 RC and 12 DD holes into the CFA prospect and outlined a small resource. The best intersection was Hole 196 with 43m of 4.3 gpt Au.
The permit is 100% owned by Sanu Burkina.
Tordo Exploration Permit
The 143 sq. km Tordo permit lies about 150km northeast of Ouagadougou and is 100% owned by Sanu Burkina. The permit covers a portion of the Fada N’gourma greenstone belt which consists of meta-tuff, meta-sediment and mafic metavolcanic rocks. A dilational fault splay is focused near the contact of the greenstone belt and enclosing granites. A number of artisanal gold workings and lag quartz-float debris fields are associated with these structures. The area had never been previously explored. A regional and locally detailed soil geochemistry program has defined a 1300x 300m soil gold anomaly in saprolite with peak values to 3000 ppb gold.
Lati Exploration Permit
The 246 sq. km Lati Permit, located in the Boromo greenstone belt, covers a major north-south shear zone and a number of known but under-explored prospects as well as an active artisanal mining area. The Lati permit is about 150 km by road, of which about 100 km is paved, west of Ouagadougou. Lati was previously explored by the UNDP (United Nations Development Program) and BUMIGEB (Burkina Faso Office of Mines and Geology) for volcanic-hosted massive sulfides (VHMS) similar to the Perkoa zinc deposit, as well as by Carlin Resources and Incanore Resources.
Prior exploration included airborne geophysics, soil geochemistry, trenching, and drilling. Several anomalous areas that were not followed up include a gold-in-soil anomaly (1000m by 200m) in the northern part of the permit in which three samples yielded over 1 gpt Au with a peak value of 6.5 gpt Au; a UNDP prospect that reported 12m of 2.45 gpt Au in a diamond drill hole; and the Kwademen artisanal mining area where reported gold mineralization over an area of 1250m x 250m with isolated values up to 65 gpt Au occurs in quartz veins and veinlets in a sheared granites and felsic volcanics.
Sanu Burkina has completed a detailed mapping and soil and trench sampling program to verify and better understand the extent of the reported gold anomalies before embarking on a program of RC drilling in the most prospective areas of the permit. The preliminary results show a significant gold and base metal anomaly approximately 1.5km x 300m near a sediment volcanic contact in the Kwademen prospect.
Work has concentrated on relocating previously discovered anomalies since there appeared to significant positional errors in the earlier work. Current work has confirmed a strong gold and base-metal anomaly with peak gold values to 1480 ppb near a felsic volcanic-shale contact and suggests that previous work did not test the gold anomaly adequately.
Loto Exploration Permit
The 93 sq. km Loto exploration permit is located in the Boromo greenstone belt. The Loto permit lies near the town of Diebougou, approximately 270km by road from Ouagadougou of which 250km is paved. The area is intensely farmed and it has taken time to establish a working relationship with the local community.
Attention was first drawn to this area by outcrops of strongly anomalous (1-2 gpt Au) quartz vein swarms in intermediate to mafic volcanics. Sanu Burkina has covered the areas of quartz veining by regional 400x 100m soil geochemistry, rock chip and lag sampling and geological mapping. Results are pending.
Indigo plans programs of concurrent soil geochemistry and air core drilling on the Lati and Tordo permits and a program of concurrent soil geochemistry and reverse circulation drilling on the Kodyel permit.
About Burkina Faso
The property package lies in the West African nation of Burkina Faso. West Africa is underlain by the Birimian Greenstone Belt, one of the most prolific gold producing areas in the world. A number of the world’s major gold companies are active in West Africa, several with producing mines, including: IAMGOLD Corporation, AngloGold Ashanti Limited, Randgold Resources Limited, Gold Fields Limited and Newmont Mining Corporation. Burkina Faso is considered to be relatively stable, both politically and economically and relies primarily on farming and mining as it main sources of revenue.
In connection with the Acquisition, Indigo intends to conduct a private placement of up to 5,000,000 subscription receipts (the "Subscription Receipts") at a price of $0.20 per subscription receipt for gross proceeds of up to $1,000,000 (the "Offering"). Each Subscription Receipt will entitle the holder to acquire, for no additional consideration, one common share of Indigo (a "Share") and one share purchase warrant (a "Warrant") entitling the holder to purchase one additional share of Indigo at a price of $0.30 per share for a period of one year from the date the Subscription Receipts are issued. If during the exercise period of the Warrants the closing price of Indigo’s shares is $0.45 per share or higher for 20 consecutive trading days, Indigo may accelerate the expiry time of the Warrants to 20 calendar days from the date written notice of same is provided to the holders.
On the closing of the Offering, the gross proceeds will be placed into escrow pursuant to the terms of a subscription receipts agreement (the "SRA") to be entered into between Indigo and Computershare Trust Company of Canada (the "Escrow Agent"). Under the terms of the SRA, the Subscription Receipts will automatically convert into Shares and Warrants on that date (the "Conversion Date") on which Indigo provides notice to the Escrow Agent that:
(a) Indigo has entered into a definitive agreement that replaces the LOI;
(b) the Exchange has approved or accepted filing of documentation respecting the Acquisition; and
(c) the Acquisition has closed.
On the Conversion Date, the Escrow Agent will release the proceeds from the Offering to Indigo. The Shares and any shares issued upon exercise of the Warrants will be subject to a hold period of 4 months and one day from the date of Closing of the Offering. If the Conversion Date does not occur on or before 4:00 p.m. (Vancouver Time) on May 31, 2010, all Subscription Receipts will be automatically cancelled and be null and void and the subscription proceeds held by the Escrow Agent from the Offering will be returned to the purchasers.
Finders’ fees may be payable in connection with the Offering.
The proceeds of the Offering will be used to conduct exploration activities on Indigo’s properties in Burkina Faso and for working capital.
On Behalf of the Board of Directors,
"R. Tim Henneberry"
R.Tim Henneberry, P.Geo.
President and CEO
For further information, please contact:
Tim Henneberry: (604) 681-3422
R. Tim Henneberry, P.Geo., President and Director of Indigo Exploration Inc., is the Qualified Person as defined in National Instrument 43-101, who has reviewed and approved the technical content of this news release.
Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.
This press release contains forward-looking statements. All statements, other than statements of historical fact, constitute "forward-looking statements" and include any information that addresses activities, events or developments that Indigo believes, expects or anticipates will or may occur in the future including Indigo’s strategy, plans or future financial or operating performance and other statements that express management’s expectations or estimates of future performance.
Forward-looking statements are generally identifiable by the use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. All such forward-looking information and statements are based on certain assumptions and analyses made by Indigo’s management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. These statements, however, are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Indigo to be materially different from those expressed, implied by or projected in the forward-looking information or statements. Important factors that could cause actual results to differ from these forward-looking statements include but are not limited to: inability to enter into a final binding agreement with respect to Sanu Burkina, risks related to the exploration and potential development of Indigo’s projects, risks related to international operations, the conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of gold, as well as risk factors discussed in certain of Indigo’s continuous disclosure documents filed on SEDAR.
There can be no assurance that any forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader should not place any undue reliance on forward-looking information or statements. Except as required by law, Indigo does not intend to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events.