-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
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
- 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
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.
For further information:
For further information: Kevin Bambrough, President and CEO, Tel: (416)
977-7333, Fax: (416) 977-9555