Press Release
Sprott Resource Corp. announces intention to amalgamate its Mantaro Phosphate Project with Stonegate Minerals
-Transaction further supports development of project- TORONTO, July 15 /CNW/ - (TSX:SCP) - Sprott Resource Corp. ("SRC") today announced that its wholly-owned subsidiary ("Holdco"), which indirectly holds SRC's interest in the Mantaro Phosphate Project, has signed a letter agreement (the "Agreement") with Stonegate Minerals Ltd. ("Stonegate") to amalgamate Holdco and Stonegate. The key principals of Stonegate, Ian McDonald and Kerry Knoll, will manage the amalgamated company ("Amalco") and work to develop the Mantaro Phosphate Project. The amalgamation is subject to a definitive amalgamation agreement as well as Stonegate and Holdco shareholder approval. Commenting on the transaction Kevin Bambrough, President and CEO of SRC, stated: "We are pleased that Ian, Kerry and the other Stonegate shareholders have decided to buy into the Mantaro Phosphate Project. We remain very excited about the project's prospects and are confident that Ian and Kerry, each of whom has extensive experience and proven success in the mining sector, will be successful in developing this project." Mr. McDonald stated: "Kerry and I are both very impressed with the potential of the Mantaro Phosphate Project and look forward to working on its development". Stonegate is a private Ontario corporation with working capital of approximately $5.3 million. Following the amalgamation and additional private placements completed by Stonegate and Amalco, SRC will own approximately 79% of the shares of Amalco. Immediately following the amalgamation, Amalco will have working capital of approximately $7.4 million. Mr. McDonald was a founder and is currently Vice-Chairman of Thompson Creek Metals Company Inc., formerly Blue Pearl Mining Ltd. He held the position of Chairman of the Company until January of 2008 and Chief Executive Officer until December of 2006. In October 2006, Blue Pearl completed the acquisition of Thompson Creek Metals to become one of the world's largest publicly-traded molybdenum producers. Mr. McDonald also has the distinction of having co-founded Wheaton River Minerals Ltd. (now Goldcorp) in 1990. Mr. Knoll was formerly Chairman of the Board of Glencairn Gold Corporation until October 2007 and, prior to that, he was President of Glencairn since its incorporation in 1987. He was also the co-founder of Wheaton River Minerals Ltd. and stayed with that company for 11 years in various capacities, including President. Mr. Knoll was also a co-founder of Blue Pearl Mining Ltd. Mr. Knoll currently sits on the board of directors of Thompson Creek Metals, Golden Goose Resources, Black Pearl Minerals Consolidated Inc., and Independent Nickel Corp. About the Mantaro Phosphate Deposit The Mantaro phosphate deposit is located approximately 250 km east of Lima, Peru, approximately 30 km west from the city of Huancayo. The property varies in width from approximately 3 km to approximately 1 km over a distance of approximately 27 km. Phosphate mineralization on the property and the adjacent area is observed in surface outcrops and a series of trenches stretching over a distance of approximately 12 km. The phosphate mineralization is of marine sedimentary syngenetic origin and ranges from highly oxidized phosphatic sandstone to phosphatic limestones and mudstones. The phosphatic zone trends northwest-southeast and dips at 39 degrees - 55 degrees (typically 45 degrees - 48 degrees) to the northeast. Surface exposures average approximately 21 m true width. As at today's date, the estimated inferred mineral resource on the Philip concession of the property is 45.17 million tonnes grading at 15.4% P(2)O(5). The grade is the average grade for the main mineralized zone (phosphatic sandstone/mudstone) based on trenching to 2.5 m depth. We note that Inferred Minerals Resources are not Mineral Reserves as Inferred Minerals Resources do not have demonstrated economic viability. The mineralized zone on the Philip mining concession of the property is based on the following reasoning:- The deposit is syngentic, where the ore forms an integral part of the stratigraphy, and extends along strike for a distance of tens of kilometres, without appreciable changes. Variations in grades, thicknesses and lithology may occur due to syngenetic, diagenetic and epigenetic processes, but they seem to have been limited in scope on the Mancaspico area. Geological continuity is an inherent feature of these types of deposits. - The presence of significant mining widths and grades in all trenches and drill holes along the eight explored kilometres, even in segments as far apart as one kilometre, supports stratigraphic and grade continuity along the entire eight kilometres. - There are no tectonic complications. The rocks are gently folded into a broad syncline. No major fault displacements are known and there is good reason to infer continuous ore outcrops along the entire explored segment. - The rocks dip favourably in most areas of the Mancaspico area (39 degrees - 55 degrees to the NE) and footwall to mineralization can constitute a pit slope, resulting in low waste/ore ratio and favourable mining conditions. The presence of continuous outcrop allows for early mining without stripping. All of these factors can increase the proportion of rock classifiable as ore. The inferred mineral resource on the Philip concession has been estimated based on a volumetric calculation using the following assumptions: - The average true thickness of the mineralized zone is 22.1 m at an average dip of 47 degrees, given an exposed width of 32.42 m. - The strike length is 10 km. This extends the ore for 4 km south of the southern most trench area. Given the excellent continuity of the mineralized zone, this assumption is reasonable. - A strip ratio of 1.75, based on a footwall slope of 45 degrees, yielding a pit depth of 65 m. - Specific gravity of 2.3 tonnes per cubic metre. - Average grade of 15.4% P(2)O(5).The exposed mineralized area extends beyond the Philip concession. There appears to be good exploration potential for development of additional mineral resources on the property. The property has been the subject of extensive historical studies. There appears to be good correlation between the exploration and sampling results obtained by previous workers on the property. Infrastructure in the area is excellent, with paved highway access from Lima and railway access from Huancayo to Lima and the port of Calloa. High tension and local distribution electrical power lines cross the property. Sulphuric acid for conversion of phosphate concentrate to fertilizer at an off-site plant may be available for purchase from nearby smelters and from chemical production facilities in Lima, Peru. Community consultations and agreements will be required to obtain the exploration permits necessary to explore the property further. Acquisition of surface rights will be required to develop the property. SRC is not aware of any outstanding environmental, permitting, legal, claim title, taxation, socio-political, marketing or other constraints that would affect the inferred resource estimate. The technical information in this press release has been reviewed by Don Hains, P. Geo., a qualified person as defined by the requirements of NI 43-101. Mr. Hains is an independent consultant who has been retained by SRC. About Sprott Resource Corp. SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Asset Management Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services. Forward Looking Statements Certain statements regarding SRC, including management's assessment of future plans, may constitute forward-looking statements under applicable securities laws and necessarily involve risk, including without limitation, risks associated with mineral exploration projects. SRC's actual results or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. No assurance can be given that any events anticipated by the forward-looking statements will occur. These forward-looking statements, which are based on management's current expectations, are made as at the date of this news release. SRC does not undertake any obligation to publicly update or revise any of these forward-looking statements, except as required by applicable securities laws.
