Tao Minerals Announces Phase 1 of the Upgrade of El Colmillo Gold Mineadmin
Tao Minerals, Ltd. is pleased to announce that it is beginning the execution of its plan to upgrade the El Colmillo Gold Mine. On July 16, 2008, through our majority owned subsidiary Minera Tao S.A. (“MT”), we entered into an amended option agreement with Agrominas De Colombia, LTDA (“AC”) to acquire 80% of a mining interest called El Comillo in Antioquia Colombia. The agreement amended the terms of the original option agreement entered into by MT on October 2, 2007, and subsequently extended on April 18, 2008.
Under the terms of the amended option agreement, the purchase price of the option is $1.42 billion Colombian pesos or approximately US$825,000. We paid $80,000,000 pesos (approximately US$50,000) upon closing of the option agreement and are obligated to pay $40,000,000 pesos on the 15th of every month until $320,000,000 pesos has been paid. Thereafter 20% of production will be paid until $1.1 billion pesos have been received by AC. After the acquisition price is paid AC will continue to receive 20% of the mining production. Upon receipt of $1.42 billion pesos by AC the option will be exercised and 80% ownership in the property will be transferred to MT.
In anticipation of our acquisition of our interest in the El Comillo mining property pursuant to our agreement with Agrominas De Colombia, LTDA, we are beginning the execution of our plan to upgrade the El Colmillo Gold Mine by implementing Phase I of the mine upgrade program.
Phase I of the program focuses on the existing mining works. The mine is currently idle and Phase I activities are designed to accomplish its reactivation to the extent of its existing full installed capacity. Actions to accomplish this will include developing the tunnels to increase the throughput volume of ore and, in concert with that, work to increase knowledge of the mine’s characterization in terms of its specific mineralogy to determine the best approach to the set-up of the upgraded gold recovery circuit.
Total monthly expenses for Phase I are estimated at $68,000 and will include, in addition to other unnamed items, specific expenditures for personnel, $16,000; fuel, $14,000; administration, $5,000; dynamite, $4,000 and an unspecified amount for repairs and adjustments to existing equipment. Capital costs to be incurred in Phase I are an estimated $12,000 for a jaw crusher and an estimated $14,000 for a 4 x 4 truck to transport fuel to the mine.
About Tao Minerals, Ltd.
Tao Minerals (OTC BB:TAOL.OB) is a junior exploration company based in Medellin, Colombia. Tao is successfully positioning itself as a leader in gold exploration in Colombia through key acquisitions of properties with exceptional potential for low extraction cost deposits. Tao’s focus in calendar 2008 is on the upgrading and initiation of operations of its El Colmillo mine, which offers the potential to quickly provide a strong revenue stream, able to fund exploration activities on the estimated high grade gold deposit of its Golondrina property and finance additional acquisitions, while greatly enhancing shareholder value.
Contact Info: Shawn Van Damme Tao Minerals Investor Relations 1-877-512-1120 Svd@Taomining.com