Overview

Regulus Resources Inc. (TSX V.REG) is a Canadian exploration company formed in December 2010 under the directorship of the former management of Antares Minerals Inc. (TSX V.ANM); John E. Black, Kevin B. Heather and Mark Wayne. Regulus was created through the spin-out of the Rio Grande Cu-Au project in Argentina along with C$5 million in cash from Antares Minerals in a Plan of Arrangement concluding the sale of Antares to First Quantum Minerals (TSX.FM, UK FQM) for approximately C$650 million; primarily for the giant Haquira Cu-Mo-Au deposit in Peru.

On May 16th, 2012, Regulus and Pachamama Resources (TSXV.PMA) successfully concluded their planned merger, thus consolidating their respective 50% interests in the Rio Grande Cu-Au project. The project is now held 100% by Regulus, with no non-government royalties or third party off-take agreements. The announced merger was co-incident with a C$20+ million financing. The financing closed at $26.6 million on March 6, 2012 with the funds held in escrow until the merger was finalized on May 16th, 2012.

The primary objective of Regulus is to continue with the evaluation of the giant Rio Grande porphyry Cu-Au system located in the mining friendly province of Salta in the Puna district of NW Argentina. Rio Grande was put on hold during the economic slowdown in late 2008 – early 2009 while the company focused their efforts on accelerating the Haquira project in Peru. After acquiring the 1.2 billion lb Cu-oxide resource at Haquira in 2005, the Antares team made a significant new high-grade porphyry discovery at Haquira East and expanded the resource to 8.1 billion lbs Cu in the Measured and Indicated class, with an additional 5.2 billion lbs in the Inferred class. This large resource lead, First Quantum Minerals in December 2010 to purchase Antares Minerals.

The Rio Grande project was reactivated in 2011 by the newly spun-out company Regulus Resources, with the completion of approximately 24 line kilometres of Titan 24 deep-looking geophysics and the commencement of a 15,000m drill program involving two drill rigs capable of 1,000m plus depths. In addition, an extensive set of metallurgical test was started to evaluate the best methodologies to maximize the extraction of Cu, Au, and Ag from the oxide, sulphide, and mixed types of mineralization. Finally, a 43-101 compliant mineral resource, the first to be completed at Rio Grande, showed an initial resource (using a 0.4% CuEQ cut-off) of 55,257,862 tonnes grading 0.342% Cu and 0.359g/t Au in the indicated category and 101,088,174 tonnes grading 0.303% Cu and 0.308g/t Au in the inferred category.

Following Antares’ successful monetization of the Haquira asset in Peru and the merger with Pachamama, Regulus Resources maintains significant strategic alliances with Farallon Capital (San Francisco), the International Finance Corporation (IFC; member of the World Bank, Washington DC) and First Quantum Minerals Ltd, which collectively hold an aggregate 24% of the shares of Regulus. Management holds a total of 9.5% of the company.

REG now has a strong portfolio of projects located in 5 countries. Three of these projects, including the flagship AntaKori Cu-Au-Ag project in Peru, have reportable resources as summarized in the following table.

Resource Tonnes
(millions)
Au
(
g/t)
Cu
(%)
Ag
g/t
Au
(M ozs)
Cu
(B lbs)
Ag
(M ozs)
Au Eq
(M ozs)
Cu Eq
(B lbs)
AntaKori Cu-Au-Ag 294.70
Inferred
0.36
Inferred
0.48
Inferred
10.16
Inferred
3.40
Inferred
3.10
Inferred
93.30
Inferred
12.81
Inferred
5.10
Inferred
Rio Grande Cu-Au

55.30
Indicated

0.36
Indicated
0.34
Indicated
4.38
Indicated
0.64
Indicated
0.40
Indicated
7.80
Indicated
1.81
Indicated
0.70
Indicated
  101.10
Inferred
0.31
Inferred
0.30
Inferred
4.40
Inferred
1.00
Inferred
0.70
Inferred
14.40
Inferred
2.93
Inferred
1.20
Inferred
Puchuldiza 30.10
Inferred
0.71
Inferred
    0.69
Inferred
    0.69
Inferred
 

Au Equivalent and Cu Equivalent values were calculated using the following metal prices: Au = US$1200/oz, Cu = US$3.00/lb.