COLORADO RESOURCES LTD. (TSX-V: CXO) (“Colorado” or the “Company”) is pleased to announce it has entered into a Letter of Agreement (the “Assignment”) with Osisko Mining Corporation, (“Osisko”) wherein Osisko will assign certain non-core property rights in British Columbia and the Yukon (acquired through Osisko’s acquisition of Brett Resources). These properties were previously under an exploration agreement (“PP Agreement”) between Brett Resources and Kinross Gold Corporation (“Kinross”). In addition, Colorado will acquire from Osisko the Santa Clara Property located in El Salvador and an Exploration License Application for the Sabalos concession located in Nicaragua (both also former non-core assets formerly held by Brett Resources).
Under the Agreement, Osisko, subject to the approval of Kinross, will assign all of its rights, interests and obligations under the PP Agreement to Colorado.
In addition, Osisko shall transfer to Colorado its 100% right, title and interest in and to:
- the Santa Clara Property through its wholly owned subsidiary Brett Resources El Salvador S.A. de C.V. (“BRES”);
- the License Application with respect to the Sabalos concession through its wholly owned subsidiary Alicante S.A. de C.V (“Alicante”);
- the British Columbia properties known as Brett Kinaskan, North ROK, Crow and Redstone ( “BKP Properties”); and
- any data previously acquired under the PP Agreement (the “Data”) and agree to hold all Data transferred confidential for a period of one year.
In return for assigning the property rights to Colorado, Osisko will receive from Colorado an aggregate 200,000 shares in the capital of Colorado (the “Colorado Shares”) as follows:
- 100,000 Colorado Shares within ten (10) business days following TSX Venture Exchange (“Exchange”) approval of the transaction and the Assignment;
- 50,000 common shares upon receipt by BRES of a government drill permit to conduct exploration work on the Santa Clara Property; and
- 50,000 common shares upon receipt by Alicante of an approved exploration concession for the License Application concerning the Sabalos concession.
As part of the transaction Osisko will contribute $500,000 in an equity financing on a non-brokered private placement basis in accordance with Policies of the Exchange prior to February 28, 2011 (the “Financing”). The proceeds from the Financing will be used to fund the exploration and development of the BKP Properties.
The closing of the Assignment, the transfer of all of the shares of BRES and Alicante and the transfer of the British Columbia Properties shall be subject to acceptance of the Exchange, the approval of Kinross for the Assignment and certain other approvals that may be required.
Mr. Adam Travis, President of the Colorado, stated “This transaction between Colorado, Osisko and Kinross allows Colorado to continue the great work started by Brett and Kinross. This agreement indicates to me the faith that both Osisko and Kinross have in Colorado’s management. We welcome Osisko as a shareholder in Colorado and look forward to advancing the British Columbia projects with Kinross and strengthening our partnership with them. The Santa Clara Project in El Salvador and the license application in Nicaragua also give Colorado projects to advance while we eagerly await the Yukon field season.”
Colorado is currently engaged in the business of mineral exploration for the purpose of acquiring and advancing mineral properties located in British Columbia and the Yukon and is also aggressively seeking properties in Latin America. Colorado’s initial focus will be to follow up exciting “Carlin” style mineralization found by previous workers on its Oro Gold Property in the Yukon as soon as conditions permit. Trenching and drilling programs are also being contemplated on the company’s Hit Property.
ON BEHALF OF THE BOARD OF DIRECTORS OF
COLORADO RESOURCES LTD.
President and Chief Executive Officer
For more information, please contact:
Colorado Resources Ltd.
Adam Travis, President and Chief Executive Officer or
Terese Gieselman, Chief Financial Officer and Secretary
T: (250) 768-1511
F: (250) 768-0020
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding proposed exploration activities. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company’s equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company’s ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company’s prospectus dated September 16, 2010 for a more complete discussion of such risk factors and their potential effects, a copy of which may be accessed through the Company’s page on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.