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.





For further information:

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

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Sprott Resource Corp.

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