IONIC RARE EARTHS LIMITED — M&A Activity 2012

Oct 16, 2012

17 October 2012

ACQUISITION OF PINTUE ACULEO PROJECT, CHILE

Oro Verde Limited (ASX:OVL) (“the Company or OVL”) has been evaluating new mineral exploration and development opportunities that could provide it with the opportunity to quickly advance its position as an explorer/ developer in Chile. One of these opportunities is the Pintue Aculeo Project and OVL is pleased to announce to shareholders its acquisition.

The Pintue Aculeo Project

The Pintue Aculeo Project is located within the Coastal Range in the Metropolitan Region of central Chile, approximately 70kms southwest of Santiago, abutting the village of Runge, on the western shores of Lake Aculeo, refer Figure 1.

The ~17km[2] project area lies 15kms north of Yamana Gold Inc’s 2,400 tpd Au-Ag-Zn mining operations at Alhue, refer Figure 1. Minera Florida produces 100,000 to 110,000 ozs of Au equivalents pa from 830,000 tpa of ore averaging 4.5 g/t Au, 34 g/t Ag, 1% Zn and 0.25% Pb by sublevel open stoping from veins ranging from 0.8 to 30m in width. Mining is currently based on a 2.5m mining width and 2.5 g/t Au cutoff grade and is relatively low cost at US$591 per oz in financial year 2011. Over the last 12 years of operations, 0.83 million ozs of Au, 6.38 million ozs of Ag and ~43,000 tonnes of Zn in concentrates have been produced. Current reserves and resources of 1.371 million ozs of Au and 9.1 million ozs of Ag give a further 8-10 year outlook to mine life at Alhue.

Gold and polymetallic mineralisation at Alhue is hosted by quartz veins and stockworks within an gently east dipping, alternating series of pyroclastic rocks (breccias and tuffs) and sub-aerial andesitic to dacitic lavas of the Upper Cretaceous Lo Valle Formation which has undergone low grade (zeolitic facies) regional metamorphism. The primary control on mineralisation is the permeability (brecciation) of the host rocks, followed by subsequent hydrothermal alteration and mineralisation. In this respect, the more fragmental and friable rocks, such as siliceous crystal tuff, Iithic and crystal tuff, brecciated tuff, and porphyritic andesite are readily altered and contain gold mineralisation. Gold mineralisation occurs as native gold and electrum associated with sulphide minerals, such as pyrite, chalcopyrite, sphalerite and galena, as well as magnetite. Some veins exhibit metal zoning, with a relatively silver and gold rich zone in the upper part of the vein and a zinc rich zone in the lower part of the vein. Mineralisation is commonly associated with hydrothermal alteration. There are four major sets of mineralised structures in the Alhué area. These are:

• West-Northwest trending structures (average orientation at azimuth 282°) generally 0.2 to 2.5m wide, 50 to 200m strike and 200m vertical in extent, averaging 2.4 g/t Au, 12 g/t Ag and 1.2% Zn .

• East-west structures, vertical to steeply south or north, generally 2 to 30m wide, 150 to 200m strike and 400m vertical in extent flanked by breccias, averaging 5 g/t Au, 50 g/t Ag and 0.9% Zn.

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• Northeast trending structures (average orientation at azimuth 042°), generally 0.5 to 3.0m wide, 50 to 200m strike and 200m vertical in extent, averaging 10 g/t Au, 15 g/t Ag and 1.1% Zn .

• North trending structures parallel, or adjacent to north trending normal faults which cut the earlier (east trending) veins generally 1 to 6m wide, up to 1,000m strike and 400m vertical in extent, averaging 3.5 g/t Au, 100g/t Ag and 1% Zn .

Similar geology and structures to the Alhue mine area are evident in the nearby Pintue Aculeo Project area, refer Figure 1. Upper Cretaceous Lo Valle Formation volcanic rocks are present, comprising porphyritic andesite, Iithic and crystal tuff and brecciated tuff. These volcanics have been intruded by an Early Eocene (80 to 85 My) batholith of monzonitic composition which outcrops extensively in the project area. The batholith covers a large part of the region, extending south and south westwards from the project area under the Alhue mine area and is probably the source of the Alhue epithermal mineralisation.

Gold and copper mineralisation in veins and structures in the project area are commonly associated with argillic, silicic and propylitic hydrothermal alteration. A number of prominent circular intrusive features are evident in the batholithic outcrop area. One of these, annotated on Figure 1, is a prominent red, coloured alteration area measuring 1,000m x 800m on satellite imagery. This area is underlain by intensely argillic altered, monzonite with silicification and limonite after pyrite. A breccia with altered silicified porphyry occurs in the southern portion of the circular feature. Eight rock sample analytical results over the alteration area range from 0.005 to 0.425 g/t Au, 0.5 to 21.9 g/t Ag, 37 to 1,622 ppm Cu, 4 to 998 ppm Pb, 5 to 195 ppm Zn, 4 to 274 ppm Mo, 3 to 119 ppm As and 10 to 319 ppb Hg.

In view of the prospectivity and geological similarities to the significant gold and polymetallic mineralisation at Alhue, 15 kms to the south, and the fact that no exploration has been undertaken over the project area, OVL has entered into an agreement with the family of Mr Ricardo Gomez Villavicencio to purchase the Pintue Aculeo project tenements. The details of this Agreement are outlined below.

The Pintue Aculeo Agreement

OVL through its 100% owned Chilean subsidiary, Green Mining Ltda (“GML”), entered into a binding Letter Agreement on Friday 12 October with the family of Mr Ricardo Gomez Villavicencio and Mr Gino Zandonia to purchase the Pintue Aculeo project tenements which comprise granted exploitation and exploration concessions. The Letter of Intent will form the basis for establishing a detailed Agreement between the two parties. This Agreement will be legally binding on both parties, comply with the laws of the Republic of Chile and Australia and with the listing rules of the Australian Stock Exchange (ASX), and will included a due diligence of the tenements, their ownership and compliance with all statutory requirements. As part of its diligence GML has the right for 90 days, from the date of signing the Letter of Intent, to complete a detailed mapping and geochemical program involving stream sediments, soil and rock traverse samples over the total area under tenements.

On signing the Letter of Intent, GML paid $10,000 to the vendors. This is non-refundable unless the due diligence establishes that the vendors do not have title to licences that they claim to have title to. If in the opinion of GML the results of the program do not confirm the expected mineral prospectivity then GML can elect not to proceed with the acquisition and it will forfeit the $10,000 paid on signing of the Letter of Intent.

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On signing the Binding Purchase Agreement, GML will pay the vendors $80,000. This payment is shown in Table 1 below which summarises the terms of the Purchase Agreement. The agreement has a term of 48 months and involves staged annual payments to complete 100% ownership for US$3m. GML has the “first right of refusal” to purchase the NSR. If GML does not progress to an intermediate 60% interest in the acquisition after 36 months then all geological and other relevant data collated for the project will be given to the vendors at no cost to them.

Pintue Aculeo Project	Payment	Payment	Payment	Payment	Payment	Payment	Total	NSR
	Sign Binding Letter Agreement	Sign Binding Agreement
Months	0	3	12	24	36	48
US$	10K	80K	120K	390K	1.2m	1.2m	3.0m	1.5%
Accumulated payments US$	10K	90K	210K	600K	1.8m	3.0m	3.0m
OVL ownership %	0	0	0	0	60	100

Table 1 Summary Details of the Agreement to purchase the Pintue Aculeo Project.

Ongoing New Project Development

OVL is continuing to evaluate new mineral exploration and development opportunities in Chile. Some of these opportunities are reasonably advanced, being in or near production, and could provide OVL with a further opportunity to quickly advance its position as an explorer/ developer in Chile. Details of further acquistions are expected to be released as they occur in the near future.

For enquiries contact:

Dr Wolf Martinick Brett Dickson Chairman / Managing Director Company Secretary 0614 179 42466 61 8 9481 2555

Note: The information contained in this report that relates to Exploration Results and Exploration Targets is based on information compiled by Dr Brad Farrell, BSc Hons Eco Geol, MSc, PhD, a consultant to the company. Dr Farrell has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking. This qualifies Dr Farrell as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves“. Dr Farrell consents to the inclusion in the report of the foregoing matters based on his information in the form and context in which it appears. Dr Farrell is a Fellow of the Australasian Institute of Mining and Metallurgy, a Chartered Professional Geologist of that body and a Member of the Mineral Industry Consultants Association (the Consultants Society of the Australian Institute of Mining and Metallurgy).

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FIGURE 1 ORO VERDE LTD PINTUE ACULEO PROJECT

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