Sprott Resource Holdings Press Releases


Press Release

Sprott Resource Corp. announces intention to amalgamate its Mantaro Phosphate Project with Stonegate Minerals


        -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  development".      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         segment.        -  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  resource estimate.      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.          

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