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| Overview
Georox acquired mining concessions in southeastern Ecuador in 2006 and 2007. The company also acquired property interests in Nambija, Ecuador in 2003 and 2006. In October 2007, these properties were transferred to Canuc Resources Corporation in exchange for shares, warrants, and future royalties. Canuc Resources Corporation is a publicly-traded company (CDA) on the TSX Venture Exchange.
In 2008, Georox focused its exploration targets on the most promising concessions. However, in April 2008, the government of Ecuador radically changed its mining laws, introducing the Mining Mandate, annulling 88% of the country's mining concessions. New mining laws were subsequently enacted on January 29, 2009. Due to the changes, some of the Company's mining concessions were cancelled and others were under appeal. The new rules created an uncertain business and mining environment. This political and regulatory instability resulted in the Company's environmental study approvals and related mining permit applications being stalled within the government. Consequently, the Company's 2008 exploration plans, including drilling, were curtailed. Georox has now ceased all operations in Ecuador in 2009 and focused its attention on acquiring oil and gas interests to increase its asset base in Canada. This will allow Georox to increase its reserves through exploration, development, and drilling programs, in order to maximize growth.
Gift Lake
On June 26, 2009 the Company completed the purchase of the Gift Lake property from a known company in Alberta. The purchase price was $550,000, with an effective date of May 1, 2009. The acquisition includes a forty-five percent interest in five producing oil wells and a 12.5 percent gross overriding royalty in a sixth well.
Farm-out Agreement in Saskatchewan
On September 25, 2009 Georox signed a farm-out agreement with a company in Alberta for total gross proceeds of $650,000. The farm-out agreement will enable the Company to earn a fifteen percent working interest on the farm-out lands, consisting of 1,040 acres in Saskatchewan. This package is a high-growth/low-risk potential development. Both 2-D and 3-D seismic and cross-sectional structure geology support confirm the presence of an undeveloped, deep-cut, oil bearing Mannville oil channel. Based on analogous wells drilled into similar Mannville channels, there is the potential for reserves in excess of 100,000+ bbls per well.
Georox's contribution will be used as part of a $3-million initial work program committed by the joint venture partners. This includes the drilling of three vertical wells and one horizontal well in Phase 1, expected to commence in November 2009. A total of approximately 10 to 12 horizontal oil wells have been identified.
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