TORONTO, June 27 /CNW/ - Sprott Resource Corp. ("SRC") is pleased to announce that The Talbot Group of Australia (the "Talbot Group") has agreed to make a substantial, strategic investment in PBS Coals Corporation ("PBS"), a corporation of which SRC owns 44,194,938 common shares (approximately 37%). PBS, and certain of its major shareholders, including SRC, have agreed to sell, and the Talbot Group has agreed to purchase, an equity position of 19.9% in PBS at a price of $6.00 per share. SRC has committed to selling up to 17,640,916 common shares of PBS. In addition, the Talbot Group has agreed to purchase shares representing 19.9% of the securities sold from treasury under a proposed private placement, which is expected to be completed in the next 30 days. The transaction with the Talbot Group is subject to customary conditions, including documentation and due diligence. Commenting on the transaction, Robert Scott, President of PBS stated: "We are delighted that the Talbot Group has decided to become a strategic investor in PBS. We thank Kevin Bambrough at SRC in particular for the introduction to Ken Talbot and Dennis Wood and we look forward to continuing to build PBS with the addition of their deep expertise in the coal industry." Commenting on the transaction, Kevin Bambrough, President and CEO of SRC, stated: "We are also very pleased that the Talbot Group has agreed to invest in PBS. The coal market is extremely exciting right now. The price of coal continues to move higher, with Rotterdam thermal coal futures for 2012 trading at US$193 per tonne, an increase of over US$70 per tonne in the past two months. This dramatic increase in the forward price of thermal coal points to excellent long-term pricing for metallurgical coal." The Talbot Group is a privately owned investment firm, which is the investment company of Ken Talbot. The Talbot Group is based in Brisbane, Australia and is a leading investor and manager of coal assets on a global basis. Ken Talbot was the founding shareholder of MacArthur Coal and served as the CEO of MacArthur during its rapid growth to become the world's leading producer of high quality PCI coal. Mr. Talbot recently resigned from the Board of Directors of MacArthur after negotiating strategic investments by CITIC and Arcelor Mittal. Mr. Talbot has agreed to serve as a Director of PBS Coals upon closing of the investment. Dennis Wood, Managing Director of the Talbot Group has agreed to serve as a consultant to PBS specifically in the areas of corporate development and strategic growth initiatives. Messrs. Talbot and Wood bring a combined 50 years plus of coal industry experience to PBS, as well as a global contact base of strategic relationships with steel manufacturers, coal producers, transportation and logistics providers, investors as well as the governments in related countries. Mr. Wood offered the following insight into the investment: "We have committed to invest in PBS because we believe that the company is in an ideal position to grow its production of high quality coking coals for many years to come. The Eastern US coalfields have long interested us as being one of the only global metallurgical coal producing regions with both available infrastructure and an abundance of attractive reserves. PBS, in our opinion, is in an outstanding position to take advantage of that growth due to its experienced management team, high quality reserves, low-cost operations and excellent access to ports. We look forward to participating as both a major investor and in providing strategic guidance to the company while it executes a growth plan designed to make it a globally recognized independent coking coal supplier." 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 contained herein may constitute "forward-looking statements" or "forward-looking information" under applicable securities laws. Some of the forward-looking statements can be identified by words such as "expects", "anticipates", "should", "believes", "plans", and similar expressions. These statements necessarily involve risk, including without limitation, risks associated coalmine production, changes in the price of coal, delivery issues associated with coal production and regulatory issues relating to coal production and use. Actual results and future events 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 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.
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