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Indicator Minerals to Acquire Bluestone Resources and its Mohave Copper-Moly-Silver Project

Published: 07:53 20 Aug 2010 AEST

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Canadian gemstone exploration company Indicator Minerals (IME: TSX-V) has signed a letter of intent to acquire Bluestone Resources, a private company with a 100% interest in the drill-ready Mohave Copper-Moly-Silver porphyry project in Mohave County, Arizona.

Under the terms of the agreement, Indicator will issue 0.62854 common shares in its capital in exchange for each Bluestone share, resulting in Indicator issuing approximately 5 million common shares, equal to approximately a 4.7% stake.

Upon closing of the transaction, the newly combined company will become a subsidiary of Indicator.

In addition, Indicator has proposed to advance Bluestone a loan of up to US$200,000 in order to make certain necessary payments on Bluestone's properties and to cover transaction expenses.

The loan will be repayable on demand and will be convertible into shares of Bluestone, according to Indicator`s wishes.

"This strategic acquisition is complimentary to Indicator's continued advancement of our northern diamond projects, in particular Nanuq North where we have results pending. It diversifies our portfolio and ensures that Indicator will have news flow throughout the year from these key projects as they are advanced by drilling," said president and CEO of Indicator Bruce Counts.

The Mohave Project is located in north-western Arizona and is targeted as a large-scale, leach-cap porphyry deposit hosting copper, molybdenum and silver mineralisation.

Exploration work conducted by Bluestone has identified extensive copper mineralisation over the project area with a coincident Induced Polarisation anomaly and complimentary structural features, Indicator said.

The geology of the Mohave Project is believed to be analogous to the Bagdad Copper Porphyry Mine, located within 30km and along the same structural trend.

President and CEO Counts, and vice president of exploration and a director of Indicator, David Kelsch, will be directors and shareholders of Bluestone and will be entitled to receive 314,270 and 377,124 Indicator shares, respectively, on closing of the deal.

The completion of the transaction will be subject to completion of due diligence, negotiation of final documentation and the receipt of applicable regulatory and shareholder approvals.

The transaction is expected to close in early October 2010.

Indicator Minerals is a Canadian exploration company focused on the discovery and development of economic gemstone deposits. It was founded in 2004.

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