SOURCE: Bayswater Uranium Corporation

October 16, 2007 15:28 ET

Bayswater to Acquire Northern Canadian Uranium Inc.

Deal Secures Strategic Development Properties in the United States and Resources in West Africa

VANCOUVER, BC--(Marketwire - October 16, 2007) - Bayswater Uranium Corporation (TSX-V: BAY) (FRANKFURT: B2V) announces that it has entered into a binding letter agreement whereby Bayswater will acquire all the outstanding shares of Northern Canadian Uranium Inc. (TSX-V: NCA) ("NCA") in exchange for shares of Bayswater on the basis of 0.65 BAY shares for each share of NCA.

Northern Canadian owns a portfolio of uranium properties in 13 project areas, some with historical resources, in Canada, United States and in Mali, West Africa, and has made application for 12 uranium concessions in Niger, West Africa. Many of these properties offer considerable synergy with Bayswater's uranium projects. In addition, two key officers and directors of NCA -- namely Praveen Varshney and Keith Laskowski -- will be joining the management of Bayswater along with other experienced members of NCA's uranium exploration team.

"Northern Canadian's key U.S. properties represent strategic assets for the development of Bayswater's United States projects and should significantly enhance the economics of our proposed mining operations," states George Leary, President of Bayswater. "Equally as important, this latest acquisition secures the services of a talented team of highly experienced geologists and personnel capable of spearheading development of our U.S. projects and assisting with Bayswater's exploration programs in Canada and elsewhere in the world."

Praveen Varshney, President of Northern Canadian, states, "Given Bayswater's excellent technical team and complementary projects, the combined companies create a stronger uranium company with an impressive portfolio of advanced and early-stage properties in major uranium regions in North America and West Africa, as well as a large cash position of $35 million to develop these outstanding assets."

NCA key projects that offer development synergy and immediate resource growth potential to Bayswater include the Elkhorn properties, Wyoming; Edgemont properties, South Dakota; Collins Bay property in the Athabasca Basin, Saskatchewan; Samit property, Mali, West Africa and the Carol R Mine property, Nevada. Also, four Niger concessions, once granted, will form a strategic addition to concessions that Bayswater has applied for near the Areva-operated Cominak and Somair uranium mines. NCA also owns additional properties in the Powder River Basin, Wyoming, the Great Basin, Nevada and in the Athabasca Basin, Saskatchewan with potential for discovery of additional resources. NCA has also applied for 8 concessions in the Djabo Basin, Niger -- a basin similar to the Tim Mersoi Basin that hosts the current deposits being mined by Areva. Except for the Niger concessions, NCA has completed work on all these projects such that all of the key properties are at the drill stage. In the case of the Elkhorn and Mali projects, planned drilling is designed to significantly expand the historical resource base on these properties.

Key NCA Projects:

Elkhorn Project, Wyoming: NCA owns over 16,700 acres under Federal, State and Fee agreements in the Powder River Basin of Wyoming strategically located near Bayswater's landholdings (Wood and New claims and five state leases comprising 5,680 acres) which, taken together, significantly enhance Baywater's planned exploration and mine development operations in Montana and Wyoming. NCA's Elkhorn project holdings include adjoining and nearby properties to Bayswater's Wood claims and State leases that would facilitate expansion of uranium resources on both companies' properties, and increase the potential feasibility of mining on these projects. Based on recent compilations of prior drilling and, as confirmed in part by NCA drilling in 2006, the combined near surface historical resources on Bayswater's and NCA's Wyoming Elkhorn/Wood properties include the following:

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                                       Average
            Resource                    Grade%      Lbs Contained
 Area       Class        Short Tons      eU3O8          eU3O8

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Busfield    Historical    158,025        0.108            341,411

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Clover      Historical     14,256        0.118             33,508

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Quad        Historical     16,669        0.153             50,839

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Vickers     Historical     14,672        0.084             24,568

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1972 Add.   Historical     18,330        0.102             37,525

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Tract41NBlk Historical     50,656        0.103            104,457

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                    Total Historical Resources: 592,308 lbs eU3O8

(Note: Historical resources as stated above are based on Federal Resources 1973 historic reports in the Marriott Library Special Collection Archives at the University of Utah and are non-compliant with NI 43-101 standards, have not been verified by any of the Company's Qualified Persons, are provided for information purposes only and as such should not be relied upon. However, NCA has completed confirmation drilling and advanced a portion of the Busfield deposit to a NI 43-101 compliant resource comprising an indicated 397,000 lbs eU3O8 grading 0.08% eU3O8 and an additional inferred 5,000 lbs eU3O8 grading 0.08% eU3O8 as summarized in a report for NCA dated April 18, 2007 by Jan C. Rasmussen and Bart Stryhas of SRK Consulting.)

NCA stated in a news release dated August 9, 2007 that "The Busfield resource remains open in three directions for expansion and occurs within the central region of a 12 mile (20 km) long trend of uranium mineralization defined by historic drilling and five historic open pit mines." NCA holds four main blocks of land holdings and Bayswater holds seven along this mineralized trend. Upon closing of the acquisition, a significant drilling program comprising more than 200 drill holes to expand resources is planned on this project next year.

The potential of the Elkhorn project area, including both NCA's and Bayswater's land holdings, and the new claims of Bayswater, which surround the previously active Hauber mine immediately to the west of the Elkhorn project area, for open pitable roll front type uranium resources is considered excellent as indicated by many pits, small mines and uranium occurrences in the region, many of which are on NCA's and Bayswater's combined land holdings. Bayswater's goal is to develop open-pitable resources in this region sufficient to support a conventional mill. Such a mill would provide synergy and considerable cost savings with respect to any potential ISR operations to be developed on the Company's roll front deposits in Carter County, Montana and on any ISR resources defined in Wyoming.

Edgemont Project, South Dakota: NCA's Edgemont Project consists of three blocks of land holdings comprising 52 claims (over 1000 acres) in the Powder River Basin that cover portions of a uranium mineralized trend that extends over a strike length of 18 miles (29 km). One of the three blocks is located immediately adjacent to PowerTech Resources' (TSX-V: PWE) Dewey uranium deposit which has a reported historic uranium resource in excess of 8 million pounds U3O8. PowerTech is currently preparing a feasibility study on this deposit which, based on historic drilling, is indicated to extend onto NCA's ground. A major drilling program is planned next year to test for this potential resource extension.

Collins Bay Extension Project, Saskatchewan: NCA owns a 90% interest in 13 contiguous claims comprising over 92,000 acres, subject to an agreement with Bullion Fund Inc., located at the eastern margin of the Athabasca Basin. The property is situated along the northeastern extension of the Collins Bay Fault and also covers sub parallel regional faults associated with the Eagle Point, Collins Bay and Rabbit Lake uranium deposits and two related underground mines, immediately to the southwest, that are owned and operated by Cameco Corporation (TSX: CCO).

The Eagle Point and Collins Bay deposits, which are closely associated with the Collins Bay Fault, have a combined reported resource of approximately 140 million pounds U3O8. The Collins Bay Extension claim block covers over 25 km of the prospective strike extension of the Collins Bay structure. NCA has recently completed a V-TEM and magnetic survey of the property that has identified over 100 km of combined strike length of favourable basement conductors associated with fault structures. Limited preliminary drilling last winter confirmed the targeted fault zones with favourable geologic settings, associated alteration and anomalous radioactivity with uranium values of up to 0.03% U3O8 -- all of which confirmed the favourability of the conductive structures tested for high grade unconformity type uranium deposits.

More recently, NCA has completed geological modeling based on known deposits in the immediate area and has developed and successfully tested, over a local Cameco uranium deposit, a unique geochemical sampling technique involving conventional lake bottom sediments and peat and plant sample using commercial analytical laboratories, with on-site, real-time evaluation of radon gas extracted from pore water from the same samples. Utilizing this technique, NCA have recently completed an extensive sampling program over the favourable conductive targets within the Collins Bay Extension property. Preliminary results indicate that over 12 high priority multiple-point anomalous targets have been identified that warrant drill testing. These targets are coincident with favourable conductive zones and associated fault structures in close proximity to the Collins Bay deposits and Eagle Point mine. Drilling of these highly promising targets is planned for the first quarter of 2008.

Samit Project, Mali, West Africa: The Samit property in Mali, West Africa comprises a 1000 sq km mining concession within the Tilemsi Basin -- similar geologically to the Tim Mersoi Basin located to the southeast in neighboring Niger, the 4th largest producer of uranium in the world. Previous work by Power Reactor & Nuclear Fuel Development Corporation (PMNC) of Japan during 1974 to 1981 included over 400 drill holes to evaluate uranium-bearing apacrete occurrences in a 400 sq km area on a limestone plateau overlapping basement rocks similar to the Air Massif in Niger. Drilling outlined a historic resource comprising approximately 440,000 pounds U3O8 grading 0.085% U3O8 (Note: Historical resources as stated above are non-compliant with NI 43-101 standards, have not been verified by any of the Company's Qualified Persons, are provided for information purposes only and, as such, should not be relied upon.). Based on work done by NCA this year, a program of drilling to confirm and expand resources is planned for next year. In addition, NCA has recently been awarded a large exploration permit area adjacent to the Samit project resource area that adds significantly to the potential for expansion of the resource.

Carol R Mine Project, Nevada: The Carol R Mine in southwestern Nevada is centered on an historic open pit mine which produced uranium in 1955-56. Uranium mineralization is stratigraphically controlled within a mixed sequence of sediments and volcanics. State of Nevada records list one sample that assayed 0.94% U3O8. The property was drilled in 1972 and historic reports state that "significant inferred uranium resources" were identified which are non-compliant with 43-101 standards as above. The project warrants detailed surface evaluation and drilling to evaluate resource potential.

Development and Exploration Highlights

Following closing of the acquisition, the corporate goal will be to significantly expand the combined NCA and Bayswater historical uranium resources in Wyoming, bring them into NI 43-101 compliance, and begin baseline studies, permitting and licensing in order to fast track projects to production. NCA and Bayswater are in the process of initiating these plans. On the other NCA key exploration properties, including Edgemont, Collins Bay, Samit and Carol R Mine, multiple drill-ready targets have already been identified and as a result drilling programs are being planned to evaluate these attractive prospects.

Addition of Key Management Personnel

In conjunction with the acquisition, the board of directors, corporate officers and advisors of Bayswater will remain the same and Praveen Varshney, currently President of Northern Canadian Uranium Inc., will join the board of directors of the Company. Mr. Varshney is a Chartered Accountant and has been actively working in the capital markets for 16 years. He was a director of Camphor Ventures Inc., now merged with Mountain Province Diamonds Inc. (TSX: MPV) a company with the largest diamond mine under development globally. He is also Chief Financial Officer of Mantle Resources Inc., a mineral resource exploration company with a 100% interest in the Akie sedex zinc discovery in British Columbia, Canada; and a director of Carmanah Technologies Corp. (TSX: CMH), one of the largest solar companies in Canada.

Also, joining Bayswater's management team upon closing of the acquisition is Keith Laskowski, MSc who will be appointed to the position of VP Exploration - USA. Mr. Laskowski is a highly experienced mining geologist with more than 28 years of exploration and mining experience throughout North America, Asia, Latin America, and Africa. He serves as Vice President and a director for Northern Canadian Uranium Inc., and has extensive experience in both project generation and venture negotiations, with over 115 project ventures to his credit. He began his uranium career in 1977, working for the U.S. Department of Energy's NURE project, and then worked for Kerr McGee Corporation prior to the collapse of the uranium markets. He re-entered the uranium exploration business briefly in 1998, evaluating uranium properties in Mongolia for Harrods Minerals, and later acquired 14 projects that were vended to Erdene Gold Inc. and International Uranium Corporation/Denison. From 1980 to 1997 he worked for Newmont Exploration Ltd. as a senior geologist, and then served as President and CEO of Gallant Minerals Services Ltd., a private exploration company owned by Mohamed Al Fayed. He later served briefly as President/CEO of several junior mining corporations and now serves as a director of Northern Canadian Uranium Inc. and Gallant Minerals Services Ltd. Mr. Laskowski is the owner of KAL Exploration Inc., a private US Corporation, and also serves as the Country Manager of exploration for Eurasian Minerals Inc. in Haiti. He is a designated Qualified Person as described in NI 43-101. Upon closing of the acquisition, Mr. Laskowski will devote essentially all of his time to the management and development of Bayswater's U.S. assets.

Terms and Process of the Acquisition

NCA and Bayswater will enter into an Arrangement Agreement, whereby Bayswater will acquire NCA through its wholly owned subsidiary, Bayswater Holdings Inc. and each common share or convertible security of NCA will be exchanged for 0.65 of a Bayswater Share or convertible security (the "Conversion Ratio"). The exercise prices of the NCA convertible securities will be adjusted in accordance with the Conversion Ratio.

Following preparation of a fairness opinion by NCA and completion of satisfactory due diligence by both companies, the directors of NCA will recommend to their shareholders that they accept the Transaction as proposed, and will assist in all reasonable ways in obtaining execution and preparation of any documents, including an information circular to be presented to the shareholders of NCA.

This Transaction is subject to completion of satisfactory due diligence, a definitive Arrangement Agreement, shareholder approval of NCA and receipt of applicable regulatory approvals.

The Company's exploration activities are conducted under the supervision of George M. Leary, MSc P. Eng. (BC), president and CEO of the Company, and Vic Tanaka, B.Sc. P.Geo. (B.C.), COO of the Company. Both are qualified persons under NI 43-101. George M. Leary, president of the Company, is the qualified person responsible for the technical information in this news release.

About Northern Canadian Uranium Inc.

Northern Canadian Uranium Inc. is a Canadian public company focused on the acquisition, exploration and development of uranium resources. NCA's exploration programs are headed by Keith Laskowski (MSc, Director, VP Exploration), a designated Qualified Person (NI 43-101) and a geologist with over 28 years of exploration experience. The company has established a pipeline of uranium projects, ranging from resource definition to grassroots exploration. NCA is presently exploring three prospective uranium projects in the Athabasca Basin and six uranium projects in the Powder River Basin of Wyoming. The Elkhorn Project in Wyoming contains a NI 43-101 compliant indicated uranium resource of 400,000 lbs U308 that can be expanded with additional drilling. NCA also has three uranium projects in the Great Basin of Nevada, three projects along the southern flank of the Black Hills uplift in South Dakota and two uranium concessions in Mali, West Africa, one of which hosts a reported historic resource. Further information is available on the NCA's website at www.northerncanadian.ca.

About Bayswater Uranium Corporation - The Super Junior™ Uranium Company

Bayswater Uranium Corporation is a rapidly-growing international uranium exploration and development company. As the only uranium company to have major landholdings in each of Canada's most important producing and exploration regions -- the Athabasca Basin, the Central Mineral Belt, and the Thelon Basin -- Bayswater is a leader in uranium exploration in Canada, the world's largest producer of uranium. The Company also owns several advanced uranium properties in the United States that are being fast tracked to production. Bayswater combines a balanced portfolio of exploration and development projects with the uranium expertise of its technical and managerial teams. The result is a Super Junior™ Uranium Company with the share liquidity and market capitalization to provide value to both the retail and institutional investor. Bayswater is listed on the TSX Venture Exchange under the symbol "BAY." The Company's website is www.bayswateruranium.com.

On behalf of the Board of:
BAYSWATER URANIUM CORPORATION

George M. Leary
President

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents herein.

Contact Information

  • For further information contact:

    John Gomez
    Manager, Investor Relations
    Telephone: (604) 687-2153