Atomic Minerals Ltd.
TSX VENTURE : ATL.P

Atomic Minerals Ltd.

January 22, 2007 11:08 ET

Atomic Minerals Announces Signing of Letter of Intent to Acquire 1209 Unpatented Uranimum Mining Claims in Colorado

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 22, 2007) - Atomic Minerals Ltd. ("Atomic" or the "Company") (TSX VENTURE:ATL.P) is pleased to announce that it has entered into an agreement in principle with 0754257 B.C. Ltd. (the "Target") dated January 11, 2007 (the "Agreement") to acquire all of the issued and outstanding securities of the Target (the "Proposed Acquisition").

Atomic is a capital pool company and intends for the Proposed Transaction to constitute its Qualifying Transaction as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Proposed Acquisition is an arm's length transaction and upon completion of the Proposed Acquisition, Atomic expects to be a Tier 2 Mineral Exploration Issuer. A finder's fee in the maximum allowable amount under the policies of the Exchange will be paid in connection with this transaction.

The Target is incorporated under the laws of the Province of British Columbia. Substantially all of the Target's assets are held through wholly-owned subsidiaries and are located in the State of Colorado, USA. The Target currently has 42 shareholders holding an aggregate of 10,301,471 common shares. No dilutive securities are issued or outstanding.

Pursuant to the terms of the Agreement, the Company intends to acquire all of the outstanding shares of the Target from its shareholders pursuant to a share for share transfer on a 1:1 ratio. If fewer than 90% of the Target's shares are tendered for exchange, Atomic will have the option of not completing the Proposed Acquisition. The deemed value of the shares of the Company issued in connection with the Proposed Acquisition will be at a price of not more than $0.40 per share, subject to Exchange approval.

Concurrent with the Proposed Acquisition, Atomic will undertake a private placement for gross proceeds of up to CDN $5.0 million to fund exploration programs on the Target's mineral properties. In connection with this private placement, Atomic intends to seek an exemption from the requirement to have a Sponsor for the Proposed Acquisition.

Summary of the Target's Significant Assets

Through its wholly-owned subsidiaries, the Target holds mining leases over two separate groups of claims in the State of Colorado which are known to host uranium deposits - one in Dolores County and San Miguel County (the "Dolores Anticline") and the other in Grand County (the "Grand County Claims"). Each of the leases are subject to certain royalty interest, annual fees and annual exploration expenditures and are described below.

The Dolores Anticline

The Dolores Anticline is located on a 19,255 acre parcel of property in Dolores and San Miguel counties in southwestern Colorado, USA. The property is within a one-hour drive of the town of Dove Creek, Colorado, which is located approximately 100 air kilometres northwest of Durango, Colorado.

The Target's interest in the Dolores Anticline is held through a wholly-owned subsidiary of the Target pursuant to an exclusive mining lease dated May 30, 2006 with Kee Nez Resources, LLC of Colorado as the registered holder, and Mayan Minerals Ltd. ("Mayan") of British Columbia as the beneficial owner. The lease is for a term of 5 years with an option to extend for a further 5 years. Pursuant to the terms of the lease, the Target's subsidiary must pay lease payments totalling US$677,000 over the first 5 years of the term, and an additional US$100,000 at the end of each year thereafter prior to the commencement of production. There are no minimum exploration expenditures stipulated for the claims in the lease.

The claims are subject to royalties (from which the above-noted lease payments are deductible) ranging from 2% to 15% of the spot market price of uranium, and 3% of net returns in the case of all other ores, minerals, or other products removed from the leased property. The Target's subsidiary was required to issue a total of 1,764,700 shares in the capital of the Target to nominees of Mayan within five days of the execution of the lease.

The Grand County Claims

The Grand County Claims are comprised of 230 unpatented mining claims located in western Colorado, which are divided into three distinct properties: Troublesome Creek which is comprised of 123 claims over 2,460 acres, Little-Wolford Mountain which is comprised of 127 claims over 2,540 acres, and Beaver Creek which is comprised of 27 claims over 540 acres.

The Target's interest in the Grand County Claims is also held through a wholly-owned subsidiary of the Target pursuant to an exclusive mining lease dated September 11, 2006 with Augustus Ventures, LLC ("Augustus") of Colorado as the registered holder and the beneficial owner. The lease is for a term of 10 years with an option to extend for a further 10 years. Pursuant to the terms of the lease, the Target's wholly-owned subsidiary must pay a total of US$452,000 over the first 10 years of the term and US$45,000 on the date the first drilling permit is received in respect of claims on the leased property. The leased property is subject to a minimum annual work commitment in the amount of US$150,000 in the first year after the effective date of the lease, US$210,000 in the second year after the effective date of the lease and US$240,000 in the third year after the effective date of the lease.

The Grand County Claims are subject to royalties from which property rental payments are deductible ranging in the case of uranium from 2% to 15% of the spot market price for uranium and 3% of net returns in the case of all other ores, minerals, or other products removed from the leased property. The Target's subsidiary was required to issue 267,000 common shares in its capital to Augustus on the effective date of the lease and a further 266,500 common shares in its capital six months after the effective date the lease. The subsidiary is required to issue 266,500 shares in its capital to Augustus upon the date the first drilling permit is received in respect of the claims on the leased property.

Board of Directors and Management of the Resulting Issuer

Concurrently with of the completion of the Proposed Acquisition, all of the current directors and officers of the Target will resign. It is currently contemplated that Warren McIntyre and Jeff Sheremeta will remain on the Board of Atomic and be joined by Robert McMorran, Ronald Atlas and Volkert (Bob) Bobeldijk. Greig Hutton and Thomas Lamb will resign their current positions as directors of Atomic. It is further contemplated that Mr. McIntyre and Mr Sheremeta will also assume management positions with Atomic. In addition, Richard Dorman will assume the role of Vice-President, Exploration for Atomic on completion of the Proposed Acquisition. Further information for each of the above-mentioned directors and officers is set out below.

Warren McIntyre - Chief Executive Officer and Director

Mr. McIntyre provides business development consulting services to both publicly traded and private companies. He has been a director and the corporate secretary of Continuum Resources Ltd., a junior exploration company listed on the Exchange, since March of 2003, and director and Chief Financial Officer of Evolving Gold Corp., a junior exploration company listed on the CNQ and OTCBB, since June of 2004.

Jeff Sheremeta, M.B.A., LL.B - Chief Financial Officer and Director

Mr. Sheremeta practiced securities law with the firm of Lang Michener LLP in Vancouver, British Columbia for six years until May 2006. His practice focused on financing, reorganization and acquisition of public and private companies, including reverse takeover transactions involving both Canadian and U.S. exchange-listed companies in all industries including resource, technology, and industrial issuers. Mr. Sheremeta now provides legal and consulting services to public and private companies in Vancouver.

Mr. Sheremeta received his M.B.A. from Queen's University in 2006. He received his Law Degree from the University of British Columbia in 1997, and was called to the British Columbia Bar in 1998. He originally received his Bachelor of Commerce from the University of Alberta in 1992. He also completed his Canadian Securities Course in June of 1998.

Robert McMorran, C.A - Director

Mr. McMorran, is president of Malaspina Consultants Inc., a private company that provides accounting and administrative services to junior public companies. Robert has over 20 years experience dealing with financial reporting and the administration of public companies, the last ten years through Malaspina. During this time, he has served as an officer and/or director of several public companies primarily involved in mineral exploration and development. Currently, Mr. McMorran is a director and Chief Financial Officer of Continuum Resources Ltd., a director of Terra Ventures Ltd., and Chief Financial Officer of both Wave Exploration Corp. and Merit Mining Corp. Until recently, Robert was Chief Financial Officer of the Canada Dominion Resources Group family of flow-through limited partnerships.

Mr. McMorran has been a member of the Institute of Chartered Accountants of B.C. since 1981. He received his Bachelor of Science in Mathematics from Simon Fraser University in 1976.

Ronald Atlas, J.D., C.P.A - Director

Mr. Atlas, of Wilmette, Illinois, has been the owner and President of Paragon Swimming Pool Construction Group since 1970. Prior to that, he was employed by the Internal Revenue Service from 1966 to 1969, and as a Certified Public Accountant with the firm Beckerman, Terrell from 1969 to 1970. Mr. Atlas has also been a director of Universal Uranium Ltd., a junior uranium exploration company, since June of 2006, and is the President and a director of Patriot Power Corp., a private uranium exploration company.

Mr. Atlas received his CPA from the University of Illinois in 1966, and his Juris Doctorate from DePaul University School of Law in 1970. He is also a member of the Illinois Bar Association and has been an attorney with the firm of Saken and Atlas since 1974.

Volkert (Bob) Bobeldijk - Director

Mr. Bobeldijk brings extensive experience in the uranium and nuclear technology fields. He has been the Senior Cost Specialist at Atomic Energy of Canada Ltd.'s major research laboratories at Chalk River, Ontario since 1991. He is a senior engineer with extensive experience in project management, cost estimating, scheduling, cost control, financial and economic analysis and audits for energy related projects. He is a member of the Professional Engineers of Ontario.

He received a degree in Civil Engineering from the Higher Technical School at The Hague in Holland in 1958. He also received a Bachelor of Arts in Economics from the University of Toronto in 1981.

Richard Dorman, B.Sc (Geo) - Vice-President, Exploration

Mr. Dorman's experience spans more than 29 years and covers all aspects of mineral exploration. He has extensive experience with sediment-hosted mineralized deposits in Colorado, Wyoming, Utah and Nevada. He has been the Vice-President, Exploration with Universal Uranium Ltd., an Exchange listed uranium exploration company, since 2005. He has also worked for Getchell Gold Corporation (a division of Placer Dome), and with uranium explorers Plateau Resources and Atlas Minerals.

Mr. Dorman received a B.Sc. in Geology from the Mackay School of Mines, University of Nevada, Reno, in 1976.

Proposed Financing

In connection with the Proposed Acquisition and subject to Exchange approval, Atomic proposes to raise up to CDN $5.0 million dollars by way of private placement of units to fund the Company's proposed exploration agenda for the Dolores Anticline and the Grand County Claims. The units will be priced at $0.50 and will each consist of a common share and a half-warrant, with each whole warrant exercisable for an additional common share at a price of $0.60 for one year from the date of issue. The private placement will be partially brokered, and the Company expects to finalize an agreement with a lead agent in the near future.

The proceeds from the financing are projected to be used as follows: $2.7 million for exploration of the Dolores Anticline, $600,000 for exploration of the Grand County Claims, $900,000 for additional claims acquisitions, and $300,000 for general corporate working capital purposes.

Description of Significant Conditions to Closing

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange Policies. The Company intents to apply for an exemption from sponsorship requirements, however there is no assurance that the Company will obtain this exemption.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Atomic Minerals Ltd.
    Warren McIntyre
    Chief Executive Officer
    (604) 639-2866
    (604) 662-3904 (FAX)
    Website: www.atomicminerals.com