Strathmore to Acquire Saratoga Gold Company Ltd.
KELOWNA, BRITISH COLUMBIA -- (Marketwire) -- 03/19/12 -- STRATHMORE MINERALS CORP. (TSX: STM)(OTCQX: STHJF) ("Strathmore" or "the Company") is pleased to announce that it has entered into an Acquisition Agreement ("the Agreement") through a Plan of Arrangement ("the Arrangement"), whereby Strathmore has agreed to acquire all of the issued and outstanding shares of Saratoga Gold Company Ltd. ("Saratoga"), a private company incorporated in the Province of British Columbia. Saratoga's primary asset is the "Copper King Property", which comprises two State of Wyoming leases totalling 1,120 contiguous acres, located in the Silver Crown Mining District in Wyoming. In addition, Saratoga holds 52 lode mining claims in the State of Montana near Tintina Resources' Black Butte copper-cobalt-silver project (formerly known as Sheep Creek).
Norm Burmeister, Saratoga's CEO commented, "We approached Strathmore with this opportunity because of their reputation and expertise in development and permitting in Wyoming. Saratoga's shareholders look forward to continuing with the progress made on the Copper King project under Strathmore's guidance."
David Miller, Strathmore's CEO, added, "We are very excited about this opportunity to create value for Strathmore's shareholders outside of our core uranium business, by acquiring this significant gold-copper project. Our major focus on uranium has not changed with the largest drilling and permitting budget in Strathmore's history recently approved by the Board for moving the Roca Honda and Gas Hills projects forward. This acquisition enables Strathmore to enhance its mineral base with an advanced gold-copper project within our geographic area of expertise. Our experienced Wyoming based geological and permitting technical team can effectively manage this project."
Copper King Au-Cu Project, Wyoming
Copper King is a shear-zone controlled Au-Cu mineralized deposit, enveloped within a larger shell of disseminated and stockwork mineralization. Historically, the property has been explored by several operators before being acquired by Saratoga in 2006. In 2007, Saratoga contracted Mine Development Associates (MDA) of Reno Nevada, who prepared a NI 43-101 technical report entitled: "Technical Report Copper King Project, Laramie County, Wyoming", dated December 6 2007, and authored by Paul Tietz, P. Geo. and Steven Ristorcelli, P. Geo. Paul Tietz and Steven Ristorcelli are both Qualified Persons under NI 43-101. Saratoga subsequently SEDAR filed the report on June 26, 2008. In their report, MDA identified that at least seven previous mineral resource/reserve estimates have been calculated for the Copper King Property since 1973, none of which are NI 43-101 compliant. MDA further detailed a "measured and indicated global resource" estimate prepared by MDA consultant Steven Ristorcelli, P.Geol. et.al. in 1995 (Not NI 43-101 compliant) estimated at 46,291,900 tons grading 0.019 oz/ton, (Au/t 0.53g/t), and 0.17% Cu for a contained resource totalling 866,000 ounces of gold and 153,008,000 lbs of Copper (See Table 1). MDA's 1995 historical resource estimate prepared by Ristorcelli et al. utilized a 0.010 oz/ton gold-only
cutoff. Additional historical resource estimates using various multiple gold-only cutoffs were also presented, and are highlighted in Table 1. MDA's historical resource estimate was based on the Australasian system of classification that did not separate Measured and Indicated resource categories, as is required by NI 43-101 prior to stating a combined Measured and Indicated resource estimate. While MDA infers a comparison to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) classifications used by NI 43-101 (p. 56), Strathmore cautions that the Company is not treating MDA's historical estimate as a current resource estimate as a qualified person has not completed sufficient work to verify and classify these historic resources as current mineral resources, and that it should not be relied upon. However, Strathmore believes MDA's 1995 historical resource estimate to be relevant and reliable as it is based on successive historical drilling campaigns resulting in the deposit being drilled out on 50-100 ft. centers within the near surface higher grade core, and to over 200 ft. centers at depth and along strike. The deposit remains open along trend and at depth. Subsequent to MDA's 1995 historical resource estimate, drilling was conducted by a previous operator and drilling and assay data for 25 drill holes completed by another previous operator was obtained by Saratoga. In 2007, Saratoga completed 18,288 feet of drilling in 28 holes to potentially confirm mineralization outlined by previous historical operators. An additional eight holes totalling 6,400 feet were completed in 2008. While MDA further noted that preliminary results from the first 13 holes drilled within the center of the deposit during Saratoga's 2007 core-drilling program "confirm the size and tenor of MDA's 1995 estimate" (p.56), Saratoga's program was incomplete at the time of writing, and assay results had not been fully analysed. MDA determined that detailed sample integrity studies, quality control data, data verification and a geologic model would all be required to upgrade the resource estimate to meet NI 43-101 classification criteria (pp. 2-3).
Strathmore plans to prepare a NI 43-101 compliant technical report and resource estimate that includes the results from Saratoga's confirmation drill programs completed in 2007-08, subject to independent verification of these results, in addition to its own planned confirmation drilling to be carried out later in 2012. Strathmore intends to contract MDA to continue the due diligence originally undertaken by Saratoga, in addition to its planned confirmation drilling to provide sufficient reliable information that will enable the Company to prepare an updated Copper King resource estimate to NI 43-101 classification standards.
Table 1: Copper King Project, Wyoming Historical Resource (Not NI 43-101
compliant)
----------------------------------------------------------------------------
Copper King Au Au Total Cu Total
Historical Resource Tons Grade Grade Oz Grade Cu lbs
----------------------------------------------------------------------------
Cutoff: 0.010 oz/ton 46,291,000 0.019 0.53 866,000 0.17 153,008,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.015 oz/ton 25,666,000 0.024 0.68 619,000 0.19 98,030,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.020 oz/ton 14,331,000 0.030 0.85 426,000 0.22 63,548,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.025 oz/ton 7,654,000 0.036 1.02 279,000 0.27 40,756,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.030 oz/ton 3,607,000 0.047 1.33 170,000 0.33 23,802,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.050 oz/ton 1,004,000 0.081 2.29 81,000 0.47 9,514,000
oz/t g/t
----------------------------------------------------------------------------
Cutoff: 0.100 oz/ton 243,000 0.124 3.51 30,000 0.62 2,967,000
oz/t g/t
----------------------------------------------------------------------------
Tons, Total Ounces and Total lbs. rounded to the nearest thousand. Au grades
originally reported in oz/t. Conversion to g/t was added.
The historical mineral resource estimates for the Copper King Property shown in the above table were taken from the report entitled: "Technical Report Copper King Project, Laramie County, Wyoming", dated December 6, 2007 and prepared by Paul Tietz, P. Geo. and Steven Ristorcelli, P. Geo., of Mineral Development Associates, Reno, Nevada. Paul Tietz and Steven Ristorcelli are both Qualified Persons under NI 43-101. The historical resource estimates presented herein were completed prior to Strathmore entering into an agreement to acquire the Copper King deposit. The potential quantity and grade is conceptual in nature and there has been insufficient exploration and verification of additional exploration data available after MDA's 1995 historical resource estimate to define a NI 43-101 compliant mineral resource. Strathmore and its consultants intend to complete further evaluation in due course, but it is uncertain if further exploration and additional work as recommended by MDA will result in the Copper King historical resource estimate being upgraded to a NI 43-101 compliant mineral resource estimate. A qualified person has not completed sufficient work to verify and classify these historic resources as current mineral resources, and the Company is not treating the historical resource estimates as current mineral resources; hence, they should not be relied on. It should be further noted that mineral resources are not mineral reserves and do not have demonstrated economic viability as defined by the NI 43-101.
Acquisition Terms
Strathmore has agreed to issue 1.25 common shares of the Company for each common share of Saratoga. Based on 14,604,002 Saratoga shares outstanding, Strathmore will issue 18,255,003 common shares to complete the transaction. In addition, pursuant to the Agreement, Strathmore has agreed to pay for any shortfall in transaction expenses incurred by Saratoga. Strathmore and Saratoga have agreed to a C $ 250,000 break fee payable to Strathmore in the event the Agreement is terminated in certain circumstances.
Saratoga's board of directors has unanimously approved the Plan of Arrangement and will recommend approval to the Saratoga shareholders in a forthcoming special shareholder meeting scheduled to be held on or before May 7th 2012. The Plan of Arrangement requires approval by a minimum two-thirds of Saratoga's shares voted at the meeting. In addition, Strathmore has entered into Lock-up Agreements with the directors of Saratoga and its Chief Financial Officer representing a total of 6,904,002 common shares of Saratoga, or approximately 47.3% of Saratoga's outstanding common shares. Pooling Agreements with Saratoga's directors have also been agreed to for a period of eighteen months.
The Plan of Arrangement is subject to approval by the TSX and other regulatory agencies, in addition to Court approval by the Supreme Court of British Columbia. The transaction is expected to close on or before May 15, 2012.
The technical information in this news release has been reviewed by David Miller, Chief Executive Officer for Strathmore Minerals Corp., a Qualified Person under National Instrument 43-101.
STRATHMORE MINERALS CORP. is a Canadian based resource company specializing in the strategic acquisition, exploration and development of uranium properties in the United States. Headquartered in Vancouver, British Columbia with a branch administrative office in Kelowna, the Company also has U.S. based Development Offices in Riverton, Wyoming and Santa Fe, New Mexico. STRATHMORE MINERALS CORP. Common Shares are listed on the TSX under the symbol "STM" and trade on the OTCQX International electronic trading system in the United States under the symbol "STHJF".
This news release contains "forward-looking information" that is based on Strathmore Minerals Corp.'s current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect that Strathmore's management believes the Copper King historical resource estimates are relevant and reliable, to the intention of Strathmore to prepare a NI 43-101 compliant technical report for the Copper King Property, expected closing date of the Agreement effected by Plan of Arrangement for the acquisition of Saratoga, the requirements to obtain approval from the TSX and other regulatory agencies, and the exploration potential of Saratoga's properties. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "plan", "forecast", "project" and "believe" or other similar words and phrases are intended to identify forward-looking information.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Strathmore's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to the outcome of the exploration and development programs; the historical resource estimates; changes in economic conditions or financial markets; changes in input prices; litigation; legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or an inability to obtain permits required in connection with maintaining, or advancing projects; and labour relations matters.
This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Strathmore Minerals Corp. disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
ON BEHALF OF THE BOARD:
David Miller, CEO
Contacts:
Strathmore Minerals Corp.
Craig Christy
Investor Relations
1-800-647-3303
info@strathmoreminerals.com
www.strathmoreminerals.com
