Strategic Metals Ltd V.SMD

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Strategic Metals Ltd. Announces Spin-Out Transaction to Create NewCompany (ccnm)
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 11, 2011) -Strategic Metals Ltd. (TSX VENTURE:SMD) ("Strategic" or the "Company") announcesthat its board of directors has unanimously approved a proposal to undertake aspin-out transaction to segregate some of its assets into a separate company.Under the terms of the proposed transaction, Strategic will transfer its SilverRange and Mint projects and approximately $17 million in cash to Silver RangeResources Ltd., a wholly-owned subsidiary ("Silver Range") in return for SilverRange shares and warrants, the majority of which will then be distributed toStrategic shareholders by way of a plan of arrangement. Strategic will retainall of its other assets, including property and royalty interests, remainingworking capital, and shares it holds in other publicly-traded companies. Theclosing of this transaction requires that Silver Range obtain conditionalapproval for the listing of its common shares and share purchase warrants on theTSX Venture Exchange.
Spin-out of Silver Range Resources Ltd.
The transaction is intended to increase value for Strategic shareholders bycreating a new precious metal focused company that will advance bulk tonnage,porphyry targets at the silver-enriched Silver Range project and the gold-richMint project, both located in the Yukon Territory. Strategic shareholders willbe asked to vote on the proposal at a special meeting of its shareholders,expected to be convened in April 2011. The proposal to be presented toshareholders would result in each Strategic shareholder receiving, on theeffective date of the transaction, one Silver Range common share and one-half ofa transferable Silver Range share purchase warrant for each three shares ofStrategic held. Each whole Silver Range warrant will entitle the holder topurchase one additional Silver Range share at a price of
.85 for a period ofeighteen months from listing. Upon completion of the transaction, Strategic willretain approximately 19% of the shares and warrants of Silver Range. Adequateadvance notice of the effective date of the transaction will be provided in duecourse.
W. Douglas Eaton, the President and CEO of Strategic stated, "The managementand Board of Directors of Strategic believe that the proposed spin-out is anexcellent opportunity for shareholders to maximize the value of their Strategicholdings, which is not being reflected in the current share price."
Management of Silver Range
Silver Range management will include W. Douglas Eaton as the President andCEO, Bruce A. Youngman as Chairman, Glenn R. Yeadon as Secretary, and Larry B.Donaldson as CFO. Messrs. Eaton, Youngman and Yeadon will all be directors ofSilver Range. The names of additional directors and management of Silver Rangeare expected to be announced in the near future. The current board andmanagement of Strategic will be unchanged.
Conditions Precedent
The proposed transaction, which is subject to shareholder approval andregulatory acceptance, including the acceptance for filing by the TSX VentureExchange and the Supreme Court of British Columbia, is expected to beimplemented through a plan of arrangement under the Business CorporationsAct (British Columbia). Subject to the final approval of the Board ofStrategic in the fixing of the date for the special meeting of its shareholders,Strategic shareholders will receive a Management Information Circular withfurther details of the proposed spin-out transaction.
Project Summaries
Silver Range Project:
The Silver Range Project is a bulk-tonnage silver-zinc-lead-copper projectsituated in the Faro District of south-central Yukon. Initial widely spaceddrilling at the Keg Zone in 2010 intersected broad intervals of porphyry-style,disseminated and stockwork mineralization in all four holes. This drillingpartially tested a 550 metre strike length, while geochemical and geophysicalanomalies associated with the Keg Zone indicate a target area about fourkilometres long and several hundred metres wide. Five more large-scale zones ofsilver-zinc-lead-copper mineralization have been identified on the project,which has been expanded to cover more than 700 square kilometres. Acomprehensive exploration program is planned for the Silver Range Project in2011, with five diamond drills already reserved. During the 1970's and 1980's,the Faro District was the site of the largest open-pit lead-zinc-silver miningoperation in Canada, and the area still has excellent but now under-utilizedinfrastructure.
Mint Project:
The Mint Property hosts newly discovered alkaline-type porphyry gold, copperand molybdenum mineralization that is associated with a young, very high levelhornblende-biotite granodiorite stock. This discovery is situated within a beltof porphyry deposits that extends along the length of the Wrangellia geologicalterrane from Vancouver Island to Alaska. The property comprises 250 claimslocated 25 km south of the Alaska Highway in southwestern Yukon. Soil samplescollected during summer 2010 outlined a 400 by 1200 m area of strongly to verystrongly anomalous gold values (100 to 3400 ppb), which are accompanied by highcopper and molybdenum values. Preliminary results from an airborne geophysicalsurvey show potassic and magnetic highs that are approximately coincident withthe soil anomaly.
Qualified Person
Heather Smith, P.Geo., a qualified person as defined by National Instrument43-101, has supervised the preparation of the scientific and technicalinformation that forms the basis for this New Release and has approved thedisclosure herein.
About Strategic Metals Ltd.
Strategic is a pre-eminent explorer and claim holder in the Yukon, with 38properties under option to other companies, 8 properties subject to a salesagreement and approximately 100 wholly-owned properties. Strategic also holdsroyalty interests in 8 projects, including a net smelter return royalty on partof the Wolverine Deposit which is scheduled to commence production in 2011.
Cautionary Statements
Completion of the Plan of Arrangement will be subject to a number ofconditions, including but not limited to TSX Venture Exchange acceptance andapproval of Strategic's shareholders by way of special resolution. Thetransaction cannot close until the required shareholder approval is obtained,and there can be no assurance that the transaction will be completed as proposedor at all.
Investors are cautioned that, except as disclosed in Strategic's ManagementInformation Circular to be prepared in connection with this transaction, anyinformation released or received with respect to this transaction may not beaccurate or complete and should not be relied upon.
ON BEHALF OF THE BOARD
W. Douglas Eaton, President and Chief Executive Officer
For further information concerning Strategic or its various explorationprojects please visit our website at www.strategicmetalsltd.com.
This news release may contain forward looking statements based onassumptions and judgments of management regarding future events or results thatmay prove to be inaccurate as a result of exploration and other risk factorsbeyond its control, and actual results may differ materially from the expectedresults.
FOR FURTHER INFORMATION PLEASE CONTACT:
W. Douglas EatonStrategic Metals Ltd. - Corporate InformationPresident and C.E.O.[phone]
OR
Bruce A. YoungmanStrategic Metals Ltd. - Corporate InformationChairman(604) 687-2522
OR
Richard DrechslerStrategic Metals Ltd. - Investor InquiriesCorporate Communications(604) 687-2522 or NA Toll-Free: (888) [e-mail]