/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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