Ms. Penny Gould reports

MINDORO ANNOUNCES COMPLETION OF FIRST DSO SHIPMENT AT AGATA

Mindoro Resources Ltd. has completed the first shipment of high-iron/low-nickel direct shipping ore (DSO) from the Agata project located in northern Mindanao, the Philippines. Upon final exercise of a 25-per-cent option in the Agata project, Mindoro will hold a 40-per-cent direct interest in Agata Mining Ventures Inc. (AMVI), a joint venture company in which TVI Resource Development (Phils.) Inc. (TVIRD) also holds a 60-per-cent interest in the project.

A total of 54,181 wet metric tonnes of limonite high-iron/low-nickel ore containing 0.7 per cent nickel and 49 per cent iron left the port of Payong-Payong in Agusan del Norte, Mindanao, on Oct. 19, 2014. In accordance with an offtake arrangement between AMVI and Tewoo Hoperay (Singapore) Pte. Ltd., AMVI expects to receive gross revenue of $890,000 (U.S.) for this shipment.

"We congratulate operator TVIRD on its efficiency in loading our first high-iron/low-nickel DSO shipment in just seven days," stated Penny Gould, chief executive officer of Mindoro. "Mindoro's transition toward becoming a cash flow generating company, through its interest in AMVI, hails a major milestone in Mindoro's strategy to rebuild value for its shareholders."

Production remains steady at the Agata project, and remaining inventory to date is approximately 26,669 wet metric tonnes of limonite high-iron/low-nickel ore with nickel and iron content levels between 0.7 per cent and 0.9 per cent, and 48 per cent and 49 per cent, respectively. It is anticipated that future shipments of approximately 55,000 wet metric tonnes of high-iron/low-nickel DSO will continue approximately every three to four weeks, with shipping rates expected to accelerate rapidly to 2.5 million wet metric tonnes per year in 2015.

About the Agata project

The Agata project is located in Agusan del Norte province within the Surigao mining region on the island of Mindanao, Philippines. The Surigao region is a major nickel producing region providing ore to processing plants in Australia, China, Korea and Japan. The region has hosted between 13 and 15 DSO operations since 2011, and exported 27 million wet metric tonnes in 2013.

An initial offtake agreement was signed in June, 2014, between AMVI and Tewoo Hoperay, a subsidiary of Tianjin Hoperay Mineral Ltd. Co., a major Chinese state-owned enterprise, to sell one million wet metric tonnes of high-iron/low-nickel DSO. A second agreement was signed in August, 2014, to sell 500,000 wet metric tonnes. Advance payments of $2-million (U.S.) have been received by the joint venture against the initial agreement to finance initial operating costs, and a further $1-million (U.S.) advance is expected in connection with the second agreement.

On Sept. 10, 2013, Mindoro and its joint venture partner and operator of the Agata project, TVIRD, an affiliate of TVI Pacific Inc., released a National Instrument 43-101-compliant feasibility study indicating robust economics for a DSO operation of the high-iron laterite resources at the Agata project. The feasibility study concluded:

• Low initial start-up capital of $10.1-million (U.S.), high internal rate of return of 187 per cent and payback within the first year of operation;
• Posttax net present value (discounted at 10 per cent) of $37.9-million (U.S.);
• DSO product to grade 48 per cent iron and 0.9 per cent nickel -- a product in consistent demand.

An NI 43-101-compliant mineral resource estimate released on April 10, 2013, shows the Agata DSO project to have reported proven and probable reserves of 9.7 million wet metric tonnes with a grade of 48 per cent iron with 0.9 per cent nickel. The report is available for viewing on SEDAR and the company website.

In addition to market demand factors, DSO prices are subject to seasonal fluctuations influenced by weather patterns. During the monsoon season, from approximately November to February, the rough ocean off the east coast of the Mindanao peninsula prohibits shipping. DSO projects on the west coast, where Agata is located, are more sheltered and can ship ore 12 months a year and take advantage of potential seasonal price spikes.

Photos of the DSO loading process are available on the company website.

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