Bayswater Uranium Corporation (TSX-V: BYU), (OTC: BYSWF) reports that it has executed an agreement “Purchase Agreement” to sell its 100% interest in the Kilgore Gold Project and related assets including the Hai and Goldbug gold properties (“KG Project”) to Otis Gold Corp. (“Otis”). The Purchase Agreement replaces an option agreement (“Option Agreement”) dated June 4th, 2008 which granted Otis the right to earn up to a 75% interest in the KG Project. Under the Option Agreement, Otis was required to pay cash of US$200,000, issue an aggregate of 3,000,000 common shares, conduct US$3,000,000 in exploration work and complete an independent pre-feasibility study on the KG Project in order to earn a 75% interest, subject to a 2% net smelter return royalty (“NSR”), 3/4 of which could have been acquired for US$1,500,000.
The Purchase Agreement requires Otis to pay an additional US$1,750,000 and issue an additional 2,000,000 common shares to Bayswater. The cash will be paid in 45-days (as to US$750,000), 4-months (as to US$750,000) and 12-months (as to US$250,000), subject to regulatory approval. The shares will be issued at closing and, including the statutory 4-month hold period, will be subject to hold periods which will expire 6-months after closing (as to 500,000 shares), 12-months after closing (as to 500,000 shares), 18-months after closing (as to 500,000 shares) and 24-months after closing (as to 500,000 shares). Under the Option Agreement, to date Otis has paid US$200,000, issued 1,300,000 common shares and completed over US$3,000,000 in exploration work.
Otis Gold Corp has announced an update on the Kilgore Gold Project as of today’s date as follows: “The Kilgore Gold Project comprises a large, 5 square mile, volcanic-hosted epithermal gold system situated on the northern margin of the eastern Snake River Plain. Pliocene-age mineralization is hosted in Miocene lithic and crystal tuff on the margin of a caldera setting. Mineralization style and setting, host rock type and thickness, and overall size of the mineralizing system are analogous to those characterizing the Round Mountain, Nevada and McDonald Meadows, Montana multi-million ounce volcanic-hosted disseminated gold deposits, where high-grade, coarse-gold feeder veins also exist.
In 2002, Rayner and Associates and Van Brunt conducted a NI 43-101 compliant resource estimate on the Kilgore bulk-tonnage deposit. Their estimate comprises 218,000 ounces of drill-indicated gold (7.043 MM tons @ 0.031 opt Au, 0.010 Au cutoff) and 269,000 ounces of inferred gold (9.661 MM tons @ 0.028 opt Au, 0.010 opt Au cutoff). Several additional 43-101 non-compliant resource estimates have been computed on the bulk-tonnage mineralization by prior operators Placer Dome U.S. and Echo Bay Mines. These estimates indicate a global resource of between 561,000 and 706,000 ounces of gold contained in the Mine Ridge deposit at Kilgore depending on the cut-off (see Otis News Release dated June 10, 2008). These estimates are mentioned for historic and reference purposes only, the issuer is not treating them as current mineral resources, and they are not to be relied upon.
Since initiating activities at Kilgore in mid-2008, Otis has completed 56 diamond drill holes totalling approximately 11,500 metres at the Kilgore Gold Project. Additionally, metallurgical testing on four samples from Mine Ridge is being conducted by McClelland Labs of Reno, Nevada, and an Environmental Scoping Study by Golder Associates is in progress. In 2011, Otis is planning an aggressive drill program that will include additional resource development drilling at the Mine Ridge deposit and exploration drilling at the highly prospective Dog Bone Ridge geophysical targets (see News Release dated September 15, 2010). Additionally, in 2011 Otis will be completing an updated NI 43-101 resource calculation on the Mine Ridge deposit to reflect drilling completed from 2008 to 2010.”
The Kilgore Gold project is not a key asset of the Company. Both the Hai and Goldbug projects are very early stage gold prospects on which neither the Company nor Otis has carried out any exploration work.
In other news, the Company reports that it has entered into a sale agreement with Cascade Resources Ltd. (TSX-V: CC) for all of its interest in 12 early stage uranium concessions, of which 8 have been granted and 4 are in the application process, in Niger, West Africa for the consideration of 2,000,000 common shares in Cascade plus a 2 ½% net smelter royalty from any production from the concessions, subject to regulatory approval. Cascade has also assumed all of the Company’s former obligations to maintain the concessions. No field work has been carried out on the concessions by the Company, although favourable geophysical targets have been identified by the Company from a compilation of airborne data generated from available work by others in the country. All the concessions are located about 80 to 150 kms northwest of the Arlit and Cominak uranium mines in north-central Niger.
Also, the Company has amended a previous sale agreement with Cascade Resources Ltd. in regards to its former land holdings in Mali, West Africa whereby the Company sold all of its interest for 1,000,000 common shares, previously issued, in Cascade plus a $250,000 promissory note due August 31, 2012 and a 2 1/2 % net smelter return from any production from the land holdings. The amendment provides for the promissory note to be converted into 1,000,000 common shares in Cascade subject to regulatory approval.
In addition, the Company announces that it has sold the Juniper uranium property in California to Longview Capital Partners Limited, a private company, for the consideration of US12,000 to cover the current year’s land maintenance fees plus 10% of the shares issuable to Longview as a result of any vending of the property into a listed company on the TSX Venture Exchange; and that such shares will not be less than 500,000 shares and failing which, and in place of the shares, Longview will pay US$250,000 to the Company upon the expiry of two years from the date of the agreement if such shares have not been issued to the Company. In addition, the Company is to be paid US$500,000 upon public announcement of commercial production from the Property. The Juniper property has historical resources of 4.0 million lbs U3O8, which resources are not compliant with NI 43-101 standards and should not be relied upon, in an area posing potential permitting restrictions and mining difficulties in northeastern California and as such is not a core asset of the Company.
All the above sale transactions are in line with the Company’s objective of building a pure uranium exploration and development company with a focus on production—particularly from potential in-situ recovery (“ISR”) operations in the western USA.
About Bayswater Uranium Corporation – The Super Junior Uranium Company TM
Bayswater Uranium Corporation is an international uranium exploration and development company. The Company owns several advanced uranium properties in the United States with significant NI 43-101 compliant and historical resources that may be amenable to ISR and/or conventional mining. With the acquisition of the Reno Creek Property in Wyoming, the Company’s focus is to put Reno Creek into production in the shortest period possible. The Company’s Elkhorn/Alzada Project, located approximately 100 miles northeast of Reno Creek, is a planned development project for possible future US production. As well, Bayswater is the only uranium company to have major landholdings in each of Canada's most important producing and exploration regions – the Athabasca Basin, the Central Mineral Belt, and the Thelon Basin. Bayswater combines a balanced portfolio of advanced and exploration projects with the uranium expertise of its technical and managerial teams. To capitalize on current market conditions and strong growth of the nuclear industry, the Company will continue to pursue acquisition opportunities of advanced-stage uranium projects with mid-term production potential. Bayswater's vision is to build a major international uranium company. Shares of the Company are listed on the TSX Venture Exchange under the symbol “BYU”. For further information visit www.bayswateruranium.com.
On behalf of the Board of:
BAYSWATER URANIUM CORPORATION
George M. Leary
Statements in this news release other than purely historical information, including statements relating to the Company’s future plans and objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in mineral exploration, development and mining. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on such statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws. 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 news release.
John Gomez, 604-687-2153
Manager, Investor Relations