Capella Resources Ltd.

Capella Resources Ltd.

December 09, 2009 14:30 ET

Capella Enters Into Royalty Reduction Option Agreement for Nevada Gold Project in Chile

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 9, 2009) - CAPELLA RESOURCES LTD. (TSX VENTURE:KPS)(PINK SHEETS:CPSJF) ("Capella" or the "Company") is pleased to announce that it has entered into an option (the "Nevada Royalty Reduction Option") to reduce the royalty on the Company's 100% interest in the Nevada gold property located in the Copiapo area of Northern Chile (the "Property"). The Property is held by the Company's wholly-owned Chilean subsidiary, Sociedad Capella Limitada ("Sociedad Capella") and the Property is currently subject to a 5% net smelter return royalty (the "Royalty"). The Royalty is legally held by International Mineral Resources Ltd. ("IMR"), a privately held company incorporated pursuant to the laws of the Turks and Caicos Islands, and beneficially held by IMR (a 50% beneficial interest) and an arm's length party (a 50% beneficial interest) (the "Arm's Length Party" and together with IMR, the "Royalty Holders").

Pursuant to the terms of the Nevada Royalty Reduction Option, the Company, on behalf of Sociedad Capella, will pay the Royalty Holders an aggregate payment of CDN$200,000 in cash, or at the Company's election issue 500,000 common shares in the capital of the Company to the Royalty Holders, as consideration for the option to reduce the Royalty. The Company, on behalf of Sociedad Capella, may exercise the option, on or before December 9, 2013, to reduce the Royalty from 5% to 2% by paying the Royalty Holders a further aggregate cash payment of US$3,000,000. All shares issued in relation to the Nevada Royalty Reduction Option, if any, will be subject to a hold period pursuant to applicable securities laws and the polices of the TSX Venture Exchange (the "Exchange"), of four months plus one day from the date of issuance.

The Nevada Royalty Reduction Option is considered to be a "Related Party Transaction" as such term is defined by the polices of the Exchange as IMR is legally and beneficially owned by Richard L. Bachman, an officer and director of the Company. The Nevada Royalty Reduction Option (and the consideration payable in connection therewith) is subject to applicable regulatory approval and the exercise of the Royalty Reduction Option is subject to disinterested shareholder approval and approval of the Company's Board of Directors.

Lajitas Royalty Reduction Option
In 2008 the Company, through its wholly-owned subsidiary Compania Minera Cerro El Diablo Limitada, entered into an option to reduce the royalty on the Company's 100% interest in the Dorado (Lajitas) gold property also located in the Capiapo area of Northern Chile (the "Lajitas Royalty Reduction Option"). For more information on the Lajitas Royalty Reduction Option see the Company's news releases dated September 26, 2008 and November 3, 2008 (copies of which are available at The Company's shareholders approved the Lajitas Royalty Reduction Option at the Company's Special and General Meeting on October 30, 2009. The exercise of the Lajitas Royalty Reduction Option remains subject to the approval of the Company's Board of Directors.

About Capella Resources Ltd.
Capella Resources Ltd. is a publicly traded, junior exploration and mineral development company with a strong portfolio of precious and base metal projects in Chile, USA and Atlantic Canada. The Company has a 100% interest in the Lajitas and Nevada gold-copper properties located in the Maricunga Gold and Copper District and approximately 700 kilometres northwest of Santiago, Chile. The properties comprise ten exploration claims and six exploitation claims totalling a cumulative 3,500 hectares in area. The Company holds a 100% interest in the Tinton Gold Project located 15 kilometres west-northwest of the famous and historic Homestake Mine in the Black Hills at Lead, South Dakota. The Tinton property consists of 1,270 hectares contained in 157 unpatented mining claims.

The Company also holds 3,839 mineral exploration claims covering an aggregate land area of over 71,558 hectares in Atlantic Canada (Nova Scotia, New Brunswick and Newfoundland and Labrador).


Gerald Aberle, Vice President Operations

FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements, which address future events and, conditions, which are subject to various risks and uncertainties. The Company's actual results and financial position could differ materially from, those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: results of exploration activities and development of mineral properties, fluctuations in the marketplace for the sale of, minerals, the inability to implement corporate strategies, the ability to obtain financing, currency fluctuations, general market and industry conditions and other risks disclosed in the Company's filings with Canadian Securities Regulators.

Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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