SHAREHOLDER COMMUNICATIONS July 9, 2008
La Noria Back-in Right Released by Kennecott Exploration
Dear Geoinformatics Shareholders and Interested Parties:
Shareholders have been asking us for some time now about the intentions of our strategic partner, Kennecott Exploration Company, with respect to its back-in rights on our more advanced projects. The following link answers that question in the case of La Noria, our leading Mexican project.
http://www.geoinformex.com/news/GXL%20PR%20La%20Noria%20BIR%20July%209%202008%20Final.pdf
We are pleased to announce that Kennecott Exploration has agreed to relinquish its back-in right on the La Noria Project in Sinaloa, Mexico, and will retain a 2% net smelter returns royalty (NSR) as its only interest in the property. The announcement is an extremely important development as the release gives us a 100% unencumbered interest in this large project subject only to an NSR. We plan to take advantage of this development by exploring a range of strategic alternatives to advance further exploration and development of this valuable property.
The release of the back-in right is also important because it illustrates the nature of the relationship between Kennecott and Geoinformatics. Under the terms of our Alliance Agreement, Geoinformatics is typically required to deliver an ?order-of-magnitude? study on a target or project in order to obtain a decision by Kennecott Exploration on the exercise of its back-in right. In the case of La Noria, Kennecott released the back-in right without delivery of the study, relying instead on its review of drill and other exploration results.
Shareholders may be concerned that the Kennecott Exploration decision has negative implications for the value of La Noria, but nothing could be further from the truth. Kennecott?s interests (as part of Rio Tinto plc) lie almost exclusively in developing or investing in giant deposits of the magnitude of Oyu Tolgoi in Mongolia (32 million oz. of gold and 71 billion lbs. of copper) and Pebble in Alaska (87 million oz. of gold and 73 billion lbs. of copper). There is considerable room beneath deposits of this scale for Geoinformatics to develop very profitable projects.
While La Noria hosts a National Instrument 43-101 Inferred mineral resource of 5.6 million tonnes grading 0.54% copper, 12.2 grams per tonne (g/t) silver, 0.08 g/t gold and 0.04% molybdenum (0.06% MoS2) combining to a copper-equivalent grade of 0.90% and we have also drilled several potentially economic near-surface occurrences of copper, molybdenum, silver, and gold (Los Laureles, Mozulitas, Amarillito) on the 202 sq. km. property and have identified two high-potential targets through rock chip sampling, the project lies well below Kennecott?s hurdle rate.
We have had very good exploration success on the La Noria property in a relatively short time period and it continues to demonstrate many of the attributes necessary to become a profitable small-to-medium sized concentrate-based mining operation. La Noria is in the prospective Sierra Madre (host to many major base and precious metal deposits) and is well serviced with existing power and road infrastructure and lies 60 km. from a major port and 35 km. from a rail line.
Should you require any further information, please do not hesitate to contact me.
Kind regards,
Kevin L. Snook
This letter and the accompanying news release includes certain forward-looking statements concerning the future performance of Geoinformatics? business and operations and its financial performance and condition, as well as management?s objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as ?may?, ?will?, ?plan?, ?expect?, ?anticipate?, ?estimate?, ?intend? and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing, as described in more detail in Geoinformatics? securities filings available at www.sedar.com. Actual events or results may differ materially from those projected in the forward looking-statements and we caution against placing undue reliance thereon. We assume no obligation to revise or update these forward-looking statements.
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