Breakwater Resources Ltd.
TSX : BWR

Breakwater Resources Ltd.

January 08, 2008 17:27 ET

Breakwater Makes Friendly Offer to Acquire Metco Resources

TORONTO, ONTARIO--(Marketwire - Jan. 8, 2008) - Breakwater Resources Ltd. (TSX:BWR) has reached an agreement with Metco Resources Inc. whereby Breakwater will purchase 100% of Metco for 7,000,000 common shares of Breakwater. This agreement is subject to normal closing conditions including the approval of regulatory authorities and Metco shareholders at a special and general meeting expected to be held mid-March being more than one month after Metco's annual meeting which is scheduled for February 8, 2008.

This transaction allows Metco's shareholders to participate in the potential offered by Breakwater shares while enabling Breakwater to consolidate its land position in the Lebel-sur-Quevillon camp, gain entry into a large and prospective land package in the Matagami camp and also secure additional feed for its Langlois mill.

In Lebel-sur-Quevillon, Metco and Breakwater have a 50:50 joint venture on properties extending over 15 km (186 claims, 3,402 ha) in the same deformation corridor as Breakwater's current deposits. The companies also share 50:50 the Orphee Deposit where a two phase 14,000m diamond drill program in 36 holes was completed early in November 2007.

In Matagami, Metco owns 100% of the Caber and Caber North deposits. On July 18th, 2007, Metco announced that the results of a NI43-101 compliant prefeasibility study (GENIVAR and Scott Wilson RPA) determined that the Caber Deposit contains probable mineral reserves of 589,000 tonnes at an average grade of 8.58% Zn, 0.84% Cu, 8.89 g/t Ag and 0.13 g/t Au. The prefeasiblity study assumed truck haulage a distance of 38km to railhead in Matagami then by rail for a further 110km to Breakwater's Langlois mill. The Caber deposit contains an additional inferred resource of 171,000 tonnes at an average grade of 8.4% Zn, 1.3% Cu, 11 g/t Ag and 0.17 g/t Au. The Caber North deposit, located 1.2 km from the Caber Deposit, contains inferred resource of 2.6 Mt at an average grade of 4.26% Zn, 1.59% Cu and 21.06 g/t Ag.

Metco's exploration properties in Matagami extend for some 60km along the prospective west flank where the Key Tuffite horizon has been intersected in many locations. The properties include the wholly-owned Galinee property (217 claims, 3,451 ha) and La Gauchetiere property (8 claims, 128 ha) as well as properties explored in a 50:50 joint venture with SOQUEM Inc., namely Du Dome-Matagami, B6-20 McIvor, Caber and Samson (493 claims, 19,922 ha).

Metco also owns 100% interest in three (3) base metal properties (89 claims, 1,815 ha) in Rouyn-Noranda and one (1) gold property (36 claims, 735 ha) in Chibougamau.

In the Gaspe Peninsula, Metco has a joint venture with Regal Consolidated Ventures Ltd on the Mont de l'Observation copper property (399 claims, 22,283 ha).

For more information on Metco, please consult Metco's website at www.metco.ca.

Contact Information

  • Breakwater Resources Ltd.
    Ann Wilkinson
    Vice President, Investor Relations
    (416) 363-4798 Ext. 277