Erin Ventures Inc. [TSX-Venture: EV] is pleased to report that it has entered into an agreement to purchase majority control of the assets of the Santa Rosa Gold Mine in Panama.

The Santa Rosa Mine was opened for commercial production by Greenstone Resources Ltd. in 1996 and operated through 1998. Gold production at Santa Rosa during this period totaled 109,002 ounces at an average cash operating cost of approximately US$285 per ounce. Greenstone’s production facilities were designed to operate at a capacity of 60,000 ounces per year using standard open pit mining methods and heap leach processing methods.

A combination of low gold prices, a substantial debt load, and multiple underperforming projects, resulted in the orderly shutdown of the Santa Rosa Mine early in 1999 and the eventual bankruptcy of Greenstone.

At shutdown, Greenstone calculated the remaining resource in place at Santa Rosa to be in excess of 900,000 ounces of gold at a grade averaging approximately 1.3 grams per tonne, using a gold price of $350 per ounce.

The main terms of the agreement are as follows:

  • Erin in conjunction with Pageland Minerals Ltd agree to collectively purchase 100% of the assets of the Santa Rosa Mine, including the land title, mineral rights, buildings, equipment and historic exploration and production data from Canazas Mining Company, a Panamanian Corporation comprised of former workers at the Santa Rosa Mine, for a total of US$1,550,000.
  • Erin will retain an undivided 75% interest and Pageland will retain an undivided 25% interest in the Santa Rosa Mine, with each partner responsible for their prorata share of the purchase price and the payments and expenditures going forward.
  • Erin shall act as operator of the mine.
  • A US$75,000 down payment was made to Canazas at the time of signing of the agreement.
  • A second payment of $75,000 is due upon the completion of transfer of land title at Santa Rosa.
  • US$500,000 becomes due and payable when the mineral rights and mining permits associated with the Santa Rosa Mine have been reestablished by the Panamanian government and granted exclusively to Canazas.
  • A second payment of US$500,000 is payable 90 days after the first payment of $500,000.
  • A final payment of US $400,000 is payable 180 days after the first payment of $500,000.
  • Canazas will receive the 10% of the net profits of the operations of Santa Rosa Mine. Net profits are defined as gross revenues less direct and indirect operating, recovery, mining and smelting costs, general and administrative expenses, interest, taxes and royalties and all other expenses relating to operating of Santa Rosa Mine.
  • Erin agrees to transfer title to the land back to Canazas when mining operations are complete.

Erin intends to use a due diligence period to advance the project to a NI-43-101 compliant resource, and to develop plans to bring the project back into production, building on Greenstone’s historic production.

Erin intends to pay a finder fee in connection with this transaction of 1,000,000 shares, subject to TSX approval.

The following are excerpts from Greenstone Resources Form 20F, filed with the US Securities and Exchange Commission and SEDAR on June 29, 1999 for the fiscal year ended December 31, 1998 and on May 20, 1998 for the fiscal year ended December 31, 1997. These historic resource calculations were prepared to the existing professional standards of the time and are thought to represent a reasonable estimation of the available gold resources, based on a $350 gold price and existing drill hole information. The resource is presented for information only and Erin must develop a NI-43-101 compliant resource.

“Description of Property – Santa Rosa Mine

The Santa Rosa gold deposit is located near the village of Caazas in Veraguas Province, Panama, approximately 300 kilometres southwest of Panama City. Access to the site is via paved road from the paved Pan American Highway. These roads are suitable for the transportation of major project components. Caazas itself is 15 kilometres north of the Pan American Highway and 300 kilometres southwest of Panama City. The Santa Rosa project (the “Santa Rosa Mine”) has two components: the Santa Rosa deposit and the Alto de la Mina (“ADLM”) deposit. Project feasibility was completed in October 1993 for gold production using heap leach methods on the ore produced by open pit mining methods. Construction of the project occurred during 1994 and 1995. Commercial production at Santa Rosa was achieved in the second quarter of 1996.

Santa Rosa Mine

Resources as of December 31, 1998

Tonnes
(000s)

Grade
(gm/tonne)

Contained gold
ounces (000s)

Measured and Indicated Resources

Santa Rosa

9,038

1.30

378

Alta de la Mina

3,690

1.98

236

Inferred Resources

Santa Rosa

5,819

1.25

234

Alta de la Mina

1,166

1.53

57

Total Resources

19,713

905

[Due to closure of Santa Rosa Mine in February 1999, all reserve figures were changed to a mineral resource inventory.]

The mine’s site elevation varies from 175 metres to 300 metres above sea level, and the topography is composed of rolling hills. The climate is tropical with almost 70% of the annual 2,800 millimetres of rainfall occurring between September and November. The Santa Rosa Mine has been designed and constructed and modified to minimize the impact of this rainfall on operations.

Gold mineralization at the Santa Rosa Mine is associated with conjugate northeast trending structures and north-south trending extensional fractures within a complex of terrestrial and marine volcanics in an island arc depositional environment. The epithermal gold bearing fluids migrated through competent and impervious mafic agglomerates and lapilli tuffs along relatively narrow northeast trending conduit zones within multi-stage, banded, extensional, sheeted and generally north-south trending quartz veins. When the fluids reached overlying felsic tuffs and sediments, increased permeability and porosity within those units enabled the gold bearing fluids to “blossom” and permeate available wall rocks.

At the Santa Rosa Mine at least two permeable and porous zones have been pervasively mineralized. The ADLM deposit and the Santa Rosa D Zone deposit appear to represent an upper mineralized unit and the Santa Rosa deposit’s A, B and C Zones (sometimes referred to collectively as the “Main Zone”) of mineralization appear to represent a second, lower mineralized unit.

The upper and lower ore bodies were once discrete but contiguous and have been subsequently offset by multiple northwest trending strike-slip structures into the present configuration of deposits.”

On behalf of the Board of Directors,
Blake Fallis, General Manager

* NOTE: All historic information contained in this release is extracted and compiled from Form 20Fs, Annual Reports, Audited Financial Statements, news releases, and other filings made by Greenstone Resources Ltd., and filed with Canadian and US securities regulators from 1996 to 2000. Additional information on Greenstone Resources Ltd and the Santa Rosa Mine is available on SEDAR.

The technical information in this release was prepared and approved by Dennis J. LaPoint, Registered Geologist in the State of North Carolina, a director of the Corporation, who is a Qualified Person under National Instrument 43-101.

Cautionary Note: A qualified person has not done sufficient work to classify the historical estimate as current mineral resources. As a result, Erin is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon. Erin is treating the historical reserves as historical resources and any economic information disclosed is considered outdated and not meant to imply any current economic viability.

For further information, please contact:
Erin Ventures Inc.
31 Bastion Sq, #102, Victoria, BC, V8W1J1
Phone: 1-250- 384-1999 or 1-888-289-3746
www.erinventures.com info@erinventures.com

Erin’s Public Quotations:
Canada
TSX Venture: EV
USA
SEC 12G3-2(B) #82-4432
OTCBB: ERVFF
Europe
Berlin Stock Exchange: EKV

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

Forward Looking Statements
This release contains forward looking statements. The words “believe,” “expect,” “feel,” “plan,” “anticipate,” “project,” “could,” “should” and other similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are subject to a number of risks and uncertainties including, without limitation, variations in estimated costs, the failure to discover or recover economic grades of minerals, and the inability to raise the funds necessary for the continued operations of the Company, changes in external market factors including commodity prices, and other risks and uncertainties. Actual results could differ materially from the results referred to in the forward-looking statements.