Sprott Resource Holdings Press Releases

Press Release

Sprott Resource Corp. Files March 31, 2008 Quarterly Report

        /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR      DISSEMINATION IN THE UNITED STATES/        TORONTO, May 15 /CNW/ - (TSX:SCP) - Sprott Resource Corp. (the "Company"  or "SRC") reports that it has released its unaudited consolidated financial  statements for the first quarter ended March 31, 2008 and that these  consolidated financial statements and the related management's discussion and  analysis of financial position and results of operations ("MD&A") can be found  on SEDAR at www.sedar.com.      The Company ended the first quarter of 2008 in a strong financial  position with working capital of $33.2 million. This number has decreased  since the end of the quarter due to the Company's additional investment in PBS  Coals Corporation ("PBS Canada") (described below). In addition, the Company  held portfolio investments valued at $11.1 million, plus its investment in PBS  Canada.      A number of events took place subsequent to the end of the first quarter,  which will affect the Company going forward. First, the Company invested an  additional U.S.$24 million in PBS Canada by electing to exercise its  preemptive rights in respect of a U.S.$64.5 million share offering by PBS  Canada. PBS Canada has used the funds raised through the share offering to  subscribe for shares of its subsidiary Mincorp Acquisition Corp. ("Mincorp"),  which in turn has used the funds to acquire all outstanding warrants and 30  percent of the stock owned by management and employees. As a result of these  transactions, PBS Canada now owns over 85 percent of Mincorp. The Company  continues to own approximately 37 percent of PBS Canada.      The coal market, and in particular the metallurgical coal market, remains  exceptionally strong, with record price settlements being reported. Analysts  expect the market to remain strong into the foreseeable future. Management is  of the view that there is a structural deficit in the market, which should  support strong pricing for some time.      Also subsequent to the end of the quarter, the Company entered into a  letter of intent with the parties to the Mantaro Phosphate Project exploration  and option agreement, which the Company entered into in November 2007.  Pursuant to the letter of intent, the Company has agreed to buy out the future  interests of the parties under the original agreement for 1,771,308 common  shares of the Company and U.S.$1.5 million in cash payments. As well, the  Company has agreed to make additional cash payments of up to U.S.$4 million  conditional on obtaining certain licenses, agreements and permits. Assuming a  definitive agreement is reached, the Company will have 100 percent ownership  of the Mantaro Phosphate Project (subject to a 2% royalty). The revised  structure will provide the Company with greater flexibility to explore  opportunities with joint venture partners, management groups and liquidity  options.      The Company also entered into two agreements subsequent to the end of the  quarter concerning the exploration for potash and phosphate. The first, with  Altius, concerns the exploration of the St. George's basin in Newfoundland for  potash. The Company can earn up to 60 percent of the project by spending $2.5  million over 4 years. The second, with Lara Exploration Ltd. ("Lara"),  concerns the exploration for potash, phosphate and other fertilizer feedstock  minerals outside of Canada. Lara has mineral exploration experience in  particular regions of the world. The Company hopes to leverage that experience  into the generation of attractive fertilizer feedstock minerals projects.      The Company also announced subsequent to the end of the quarter that it  has formed a new company named One Earth Resources Corp. ("One Earth"), to be  headed by Mr. Blaine Favel, former Grand Chief of the Federation of  Saskatchewan Indian Nations. One Earth will be focused on resource development  opportunities with the First Nations. The Company will seed One Earth with  initial capital and then invest in projects generated by One Earth on a  case-by-case basis. Management believes that there are excellent natural  resource development opportunities on First Nations' lands and is pleased to  be able to work with Mr. Favel.      Finally, the Company announced, subject to shareholder, warrantholder and  regulatory approval, a warrant incentive program to encourage the early  exercise of 39,920,000 warrants that expire September 5, 2009. Details of this  warrant incentive program are disclosed in the Company's press release dated  May 13, 2008. Having early access to the additional capital provided by these  warrants would give the Company the ability to grow and diversify its exposure  to quality resource opportunities.      Going forward, management will continue to seek out attractive business  opportunities in the natural resource sector and will work on advancing its  current projects.        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 or future market conditions, may constitute forward-looking  statements under applicable securities laws and necessarily involve risk,  including without limitation, risks associated with mineral exploration  projects and risks associated with commodity prices. 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. Subject to  applicable laws, 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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