Black Bull Resources Inc.
TSX VENTURE : BBS

Black Bull Resources Inc.

January 29, 2007 07:00 ET

Black Bull Cancels Agreement with U.S. Silica and Announces September 30, 2006-Annual Financial Statement Release Along With December 31, 2006-Interim Financial Statement Release

SHELBURNE, NOVA SCOTIA--(CCNMatthews - Jan. 29, 2007) - Black Bull Resources Inc. (TSX VENTURE:BBS) is proceeding to terminate its U.S. Silica Company (USS) sales agreement for non-performance. In light of discouraging sales results achieved by U.S. Silica, the Company is notifying USS of termination. Discussions are underway with U.S. Silica regarding resolution of the issues arising from these activities.

Black Bull Resources Inc. has released the Audited Financial Statements and Management Discussion & Analysis (MD&A) for the year ended September 30, 2006.

The Company reports a net loss for the year of $3,001,754 ($1,402,998 in 2005) or $0.068 per share ($0.032 in 2005). Net sales of $130,558 ($38,714 in 2005) were primarily of Scotia White™ quartz to the southern U.S.A. The Company recorded $670,790 ($240,115 in 2005) in non-cash operating items resulting in a net cash loss from operations of $2,330,964 ($1,162,883 in 2005) or $0.053 per share ($0.026 in 2005).

During the fourth quarter, the Company reports a net loss of $891,613 ($393,908 in 2005) or $0.020 per share ($0.009 in 2005). Net sales for this quarter were $103,085 ($14,976 in 2005). The Company recorded $193,904 ($63,907 in 2005) in non-cash operating items resulting in a net cash loss from operations of $697,709 ($330,001 in 2005) or $0.016 per share ($0.007 in 2005).

As reported in the Financial Statement Notes and MD&A, the Company was able to develop one customer in the pool industry located in the U.S. southwest. Their orders were for a specific, narrow cut of the production capacity at the White Rock Property. This cut accounted for a small percentage of plant production and the exclusive sales representative, U.S. Silica Company, was not successful in obtaining any significant complementary orders from other customers. Black Bull suffered from high costs for the one sold product, due to the low utilization of production.

In an effort to conserve cash, the Company temporarily ceased production operations and restructured management in October 2006. The Company has since received sufficient written and verbal commitments from potential customers to resume operations. The re-opening is tentatively scheduled for the spring of 2007.

Black Bull has also released the Interim Financial Statements and Management Discussion & Analysis (MD&A) for the three-month period ended December 31, 2006.

The Company recorded a net and comprehensive loss during the quarter of $589,206 ($484,535 December 31, 2005) or $0.013 per share ($0.011 December 31, 2005). Net sales for this quarter were $28,078 ($3,298 in 2005). The Company recorded $129,078 ($55,562 in 2005) in non-cash operating items resulting in a net cash loss from operations of $460,127 ($428,978 in 2005) or $0.010 per share ($0.010 in 2005).

As reported in the Financial Statement Notes and MD&A, Black Bull is focused on converting letters of intent and verbal commitments to purchase orders and contracts. It is also continuing to broaden the potential customer and product bases. The Company is implementing a plan to improve operations at the White Rock Property. Some workers have been re-hired to perform the plant maintenance and upgrade program. Management is currently determining staffing requirements, with operations expected to resume in mid to late April 2007.

The Company has developed a better understanding of its markets, and based on early commitments, it expects to produce and sell 20,000 to 30,000 tons of Scotia White™ quartz in the balance of calendar 2007. Indications are that demand should double to 40,000 to 60,000 tons in 2008. If these sales levels are reached, the Company expects to achieve positive cash flow in the second quarter of calendar 2008.

The Company intends to raise $850,000 from a private placement for convertible debentures bearing interest at the rate of 12% per annum, maturing in 12 months, and convertible into common shares of Black Bull at a conversion rate of $0.15. Black Bull anticipates closing the private placement by mid-February. The Company has received conditional regulatory approval for the private placement.

Earlier this month, the Company entered into an Agreement with Metso Canada Minerals Inc., to purchase a portable closed-circuit Barmac crushing plant. This crushing system is designed to reduce the cost of production by providing a dryer, properly sized feedstock material which will reduce operating costs and waste rock. It will also provide Black Bull with additional products to compliment its dried and screened Scotia White™ quartz.

The Company intends to hire a permanent CEO and sales staff. In the interim, the Sales Taskforce will continue to sell Scotia White™ quartz, while the Board develops and staffs a new organization plan for the business.

About Black Bull Resources Inc.

Black Bull Resources Inc. is a Canadian mining company based in Nova Scotia that operates the White Rock Mine near Shelburne. The Mine produces a bright-white, high-purity quartz, marketed under the Scotia White™ trademark which is used in a range of value-added, specialty products.

Further detailed information may be obtained from the Company's website www.blackbullresources.com or corporate filings at www.SEDAR.com.

FORWARD LOOKING STATEMENTS: This news release contains certain forward-looking statements. All statements, other than statements of historical fact, included herein, including without limitation statements regarding the Company's mining properties, development results or future plans, are forward looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed elsewhere in documents that are available to the public.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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