Press Release

Sprott Resource Corp. announces signing of lock-up agreement in connection with proposed takeover of PBS Coals Limited

        TORONTO, Aug. 22 /CNW/ - Sprott Resource Corp. ("SRC") announced today  that it has signed a lock-up agreement with Severstal Resources, the mining  division of OAO Severstal ("Severstal") under which it has agreed to tender  into a takeover bid (the "Offer") to be made by Severstal for all the  outstanding shares of PBS Coals Limited, the resulting issuer of the proposed  business combination between PBS Coals Corporation and Penfold Capital  Acquisition Corporation (the "Business Combination"). The Offer will be made  at C$8.30 per share of PBS Coals Limited.      Assuming the proposed Business Combination is completed, SRC will own  approximately 27.14 million shares of PBS Coals Limited. If the proposed  take-over were completed, SRC would receive proceeds of approximately C$225.3  million. These proceeds would be in addition to proceeds (net of commissions)  of approximately C$100 million that SRC will receive from its completed sale  into escrow of 17.05 million shares of PBS Coals Corporation (see press  release dated July 31, 2008).      The Offer is subject to a number of conditions, including (i) receipt of  all required regulatory and Court approvals in respect of the Offer; (ii) the  completion of the Business Combination; and (iii) valid deposit of at least 66  2/3% of the outstanding shares of PBS Coals Limited (on a fully diluted  basis). It is expected that the Offer will be made by September 5, 2008 (but  in no event later than September 30, 2008).        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,  the risk that the Offer will not be made, required regulatory and Court  approvals will not be obtained and the Business Combination will not be  completed. 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.