News ReleaseBig Blackfoot Resources Ltd - News Release
Big Blackfoot to buy Frenier land; Reid replaces Kure
Big Blackfoot Resources Ltd BLF
Shares issued 20,279,480 Aug 23 2002 close $ 0.03
Tuesday August 27 2002 News Release
Mr. John Halliwell reports
The company has, subject to regulatory approval, entered into an agreement to purchase a 100-per-cent interest in the Frenier perlite property located approximately 150 kilometres from Ashcroft, B.C. The Frenier perlite property is one of the largest defined perlite deposits in Canada, and was last produced in 1999. Production was halted when the operator's other businesses caused it to fail.
The purchase and sale agreement contemplates that the company will issue a total of 600,000 shares from treasury upon regulatory approval and issue another $50,000 worth of shares upon the start of commercial production, based on the then 40-day average trading price. In addition the vendors are entitled to a production royalty.
Perlite is an industrial mineral used primarily in the agricultural and retail peat moss business. With a significant water content, it expands much like popcorn when heated and provides enhanced bulk and water retention properties to peat moss. This market is well developed in North America and several commercial customers are located in Western Canada, making the Frenier property location a significant advantage.
The company's initial production of perlite from this long-life open pit mine will be a pilot project in 2002, with commercial production commencing in 2003. It is projected that production could reach 15,000 tonnes per year within two years. Processing arrangements have been made and test markets have been determined.
This acquisition and commencement of the pilot production from the Frenier property are a major step forward in positioning Big Blackfoot with a solid financial base. This project will, once full development is achieved, provide significant and continuous cash flow after the expenditure of minor capital costs.
Big Blackfoot has a two-pronged strategy to add significant shareholder value. First, the company intends to pursue projects similar to the Frenier project that have low-risk characteristics, early production and the potential to provide a stable financial base of positive cash flow. Secondly, the company will pursue projects, such as its Dubach project in the Magadan region in Russia, which are more early stage and higher risk with respect to geological risk, but which would create greater value for the shareholders if successful.
Management is currently reviewing alternatives in respect to raising the capital needed to finance the pilot project of the Frenier property, provide funds for further development on that property next year and to finance exploration on the Dubach gold prospect in Russia.
A new board of directors was elected at the recent annual general meeting, comprising James Allen, John Halliwell, John Kormarnicki, Gordon Reid and Paul S. White. The company wishes to thank retiring director William Kure for his contribution over the past six years and welcomes new director Mr. Reid to the board. Mr. Halliwell has been appointed president and Mr. Reid is now the chief financial officer.
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