Canadian Small Cap Resource Fund 2006 No. 1 Limited Partnership

Canadian Small Cap Resource Fund 2006 No. 1 Limited Partnership

October 15, 2007 15:07 ET

CSCRF 2006 No. 1 LP Announces Early Cash Distribution

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 15, 2007) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR UNITED STATES WIRE SERVICES

Canadian Small Cap Resource Fund 2006 No. 1 Limited Partnership ("the Partnership") is pleased to announce an early distribution of cash in the amount of $1.00 per unit for each unit held by the limited partners, to be paid during the third week of October 2007.

"Earlier this year we took advantage of some strong performances of several companies in our portfolios to raise some cash for our limited partners," said Stephen Wilkinson, president of Canadian Small Cap Resource Fund 2006 No. 1 Management Ltd. (the "General Partner"), general partner of the Partnership.

"We're thrilled to once again send some of this cash back to the Partnership several months ahead of the anticipated wind-up of the LP next spring. We did the same thing last year with the 2005 CSCRF LP, and we are today also announcing a $1.00 per unit early distribution on the CSCRF 2006 No. 2 LP at the same time we announce this distribution for CSCRF 2006 No. 1 Partnership. This sends a very strong and positive message to our limited partners that we are focused on delivering absolute returns to them over and above the tax benefits of investing in flow-through shares."

The Partnership raised $7,592,710 by issuing 759, 271 units at $10.00 per unit in July of 2006. These funds were subsequently invested in portfolios of flow-through shares of early stage mining and oil & gas exploration companies. The Portfolio Advisor to the Partnership is Bolder Investment Partners, with Shane Meyers of Bolder being the portfolio advisor working closely with the General Partner. The Partnership is expected to wind up in the spring of 2008. As of June 30, 2007, the NAV of the Partnership was $10.65.

"We've seen some difficult markets over the summer months, and to be able to deliver cash back to limited partners in this scenario is proof that our model is really working," said Neil MacDonald, CEO of NovaDX Ventures Corp., parent company of the CSCRF Group of Funds.

"NovaDX manages deal flow to our flow-through partnerships and also has the ability to offer other financing means to these early stage exploration companies. As a result, we believe that CSCRF limited partners unit-holders benefit from more attractive opportunities at better prices than they otherwise would be offered. This early distribution shows how well this can work."

Tax Consequences of Early Distribution

Donald Cameron, CFO of the General Partner, has provided the following background note with an explanation of some of the tax consequences of this early distribution:

A distribution of capital from the Partnership in itself is not a taxable transaction. It does however reduce the adjusted cost base of a unitholder's partnership interest ("acb"), which will give rise to taxable capital gains in one of the following events:

1. the acb at the end of a calendar year is negative; or

2. the proceeds received on dissolution of the Partnership or sale of a unit exceeds the acb of that unit.

A Unitholders' acb is also reduced by business losses and CEE allocated, hence it is anticipated that this distribution will create the situation contemplated in event # 1 above. The taxable amount to be included in 2006 is approximately $0.375 per unit, however each limited partner should consult with their professional advisor as the calculation is specific to each limited partner's circumstances."

About the CSCRF Group: Canadian Small Cap Resource Funds is a leading, Vancouver-based investment management company that creates and distributes limited partnerships that invest in flow-through shares of Canadian junior mining and energy companies. CSCRF is a subsidiary of NovaDX Ventures Corp. (TSX VENTURE:NDX). For more information on the CSCRF Group, please visit www.cscrf.ca.

About NovaDX Ventures: NovaDX is a Vancouver-based investment firm whose primary focus is on providing merchant banking and other business advisory services to micro-cap natural resource issuers, a largely overlooked but important sector of the equity markets. NovaDX's business plan involves seeking out investment opportunities in companies that have quality management and projects that demonstrate an above average opportunity for new resource discoveries. NovaDX works closely with management of these companies with the objective of mitigating risk and enhancing the value of its investments. NovaDX intends to pursue opportunities in North America and abroad. NovaDX seeks a return on its investments supplemented with revenue from investment banking, investment management and advisory services. For more information please visit www.novadx.com.

On the behalf of the Partnership:

Stephen Wilkinson, President, CEO & Director

Contact Information

  • Canadian Small Cap Resource Fund 2006 No. 1 Limited Partners
    Stephen Wilkinson
    President, CEO & Director
    Toll Free: 1-888-350-8818 or (604) 331-1223
    or
    Canadian Small Cap Resource Fund 2006 No. 1 Limited Partners
    Rick Peterson
    (604) 633-2776
    or
    Canadian Small Cap Resource Fund 2006 No. 1 Limited Partners
    Adam Ho
    (604) 633-2776
    (604) 683-6564 (FAX)
    Website: www.cscrf.ca