Santoy to acquire Blizzard uranium deposit
Santoy, Sparton to form JV at Blizzard deposit
2005-06-13 17:09 ET - News Release
Also News Release (C-SRI) Sparton Resources Inc
Mr. Ron Netolitzky of Santoy reports
SANTOY AND SPARTON OPTION SIGNIFICANT BRITISH COLUMBIA URANIUM DEPOSIT
Santoy Resources Ltd. and Sparton Resources Inc. have jointly entered into an agreement with an independent prospector to acquire the core claims covering the Blizzard uranium deposit, situated in the Greenwood mining division of British Columbia. Under the terms of the agreement, Santoy and Sparton will form a 50:50 joint venture to earn a 100-per-cent interest in the Blizzard claims over a four-year period by making $450,000 of cash option payments ($50,000 upon signing of the agreement), issuing shares in their respective companies (250,000 shares of Santoy and one million shares of Sparton in year one, and 250,000 shares of Santoy and one million shares of Sparton in year two), completing a $1.5-million work program ($500,000 in the first two years), making advanced royalty payments of $50,000 per year after the fifth anniversary, and paying a royalty on sales. A summary of the terms of the agreement and further details will be available on the companies' websites and in their respective SEDAR filings.
The Blizzard deposit was the subject of a positive feasibility study in 1979 completed by a joint venture company comprising Norcen Energy Resources Limited, Campbell Chibougamou Mines Ltd., E & B Explorations Ltd. and Ontario Hydro. The property was never placed in production due to a (now expired) moratorium on exploration and development for uranium resources in the province which was imposed by the B.C. government in 1980.
The feasibility study was prepared after extensive drilling (over 400 reverse circulation and diamond drill holes) and engineering studies and was based on a reported resource of 2.2 million tonnes grading 0.214 per cent U3O8, using a cut-off grade of 0.025 per cent U3O8 (for an estimated total of 10.4 million pounds of U3O8). This estimate predates and therefore does not conform to the more stringent reporting requirements of Canada's National Instrument 43-101. This historical estimate should not be relied upon; however, Santoy and Sparton believe that these calculations provide a good conceptual indication of the potential, according to NI 43-101 standards, of the deposit and are therefore relevant to this news release. The joint venture expects to have access to and be able to compile all of the pertinent data from the 1979 study. An independent qualified person will be retained by the joint venture to undertake an NI 43-101 compliant resource evaluation of the project.
Blizzard is a secondary type uranium deposit located in a paleo-drainage channel of Tertiary age. It is interpreted to have been formed by the concentration of uranium minerals leached from nearby intrusive rocks, which are anomalously high in uranium content, and deposited in an old riverbed channel which was preserved from glacial erosion by a cover of younger volcanic rocks. This type of deposit is often amenable to exploitation by widely used, low environmental impact, in situ solution mining. The joint venture plans to undertake a full engineering study to investigate the viability of using this recovery method, which involves only minimal surface disturbance. The previous feasibility study did not consider this extraction option and was based on using conventional open cast mining methods.
Notice has been filed with the gold commissioner, under the Mineral Title Act, by a prior property owner of the property area, claiming "superior right, title and interest" to the claims. Based on the companies' review of the facts, the property was properly filed for and recorded by the vendor under the new on-line staking provisions of the act. Based on the information in hand the companies have agreed to support the vendor with respect to any title disputes and to provide certain indemnities in respect thereof.
The terms of the agreement have been approved by the companies' respective boards of directors and are subject only to regulatory approval.
The qualified persons, as defined by National Instrument 43-101, responsible for review of this news release are Ron Nichols, PEng, Santoy vice-president of exploration, and A. Lee Barker, PEng, president and chief executive officer of Sparton.