Paragon Minerals Corporation
TSX VENTURE : PGR

Paragon Minerals Corporation

November 15, 2007 08:50 ET

Paragon Minerals and Sprott Resource Corp. Sign JV Option Agreement on JBP-Appleton Linear Gold Project

Sprott Resource Corp. to Earn 55% Interest by Spending $2.175 Million Over Four Years

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 15, 2007) - Paragon Minerals Corporation (TSX VENTURE:PGR) is pleased to announce the signing of a Joint Venture option agreement with Sprott Resource Corp. ("Sprott") (TSX:SCP) for Paragon's JBP and Appleton Linear gold properties. The properties are located near Gander, Newfoundland and consists of 14 contiguous mineral licenses (592 claims) covering 14,800 hectares. Exploration by Paragon has documented a high grade gold-bearing environment within the sedimentary rocks that underlie the project area.

"We are pleased to welcome Sprott as a new partner in Newfoundland" said Michael Vande Guchte, President and CEO of Paragon. "Sprott is a well-funded, TSX-listed company with an impressive management team and Board, and we look forward to continuing exploration on these properties with Sprott". This agreement will allow Paragon to further focus on its 100%-owned South Tally Pond project, where an aggressive exploration program is being planned on its new massive sulphide discovery at the Lemarchant prospect.

The option agreement gives Sprott the right to earn a 55% interest in Paragon's project by spending $2.175 million on exploration over four years with a firm $375,000 exploration expenditure commitment in the first year. The agreement also calls for Sprott to make $250,000 in payments to Paragon over the four years, including $25,000 to be paid on signing of the agreement and to make all underlying property agreement payments. The agreement gives Paragon the option to contribute an additional $125,000 in the first year which would then raise Sprott's fourth year exploration expenditure by $250,000. Paragon will be operator of the joint venture during the earn-in period.

When Sprott earns a 55% interest, a Joint Venture will be formed with each party having the right to maintain its respective interest by funding its share of exploration costs. The agreement also gives Sprott the right, subject to certain conditions, to increase its interest to 70% by completing a feasibility study and providing a positive production decision. The agreement provides for a standard dilution clause. A finder's fee of $12,500 will be paid by Paragon to the finder of the option partner, subject to regulatory approval.

The partnering of the JBP and Appleton Linear gold properties is an important part of Paragon's business plan to advance its exploration projects through partner-funded exploration while allowing it to focus on its key projects. Paragon suspended its drilling program on the JBP Linear property in late September pending the outcome of the joint venture discussions with Sprott. Results of the 4 holes (690 metres) completed in September will be made available in follow-up news release.

Paragon Minerals Corporation is a Canadian-based mineral exploration company listed on the TSX Venture Exchange. Paragon is focused on base and precious metal exploration in the Province of Newfoundland and Labrador.

PARAGON MINERALS CORPORATION

Michael Vande Guchte, President & CEO

Exploration work on the JBP-Appleton Linear was carried out under the supervision of David A. Copeland, M.Sc. P.Geol, Qualified Person as defined under National Instrument 43-101. Historical results and information contained herein were obtained from reports filed with the Government of Newfoundland & Labrador.

Forward-looking statements - This news release contains certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Forward-looking statements in this document include statements regarding future exploration programs and joint venture partner participation.

Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration success, continued availability of capital and financing, inability to obtain required regulatory or governmental approvals and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change. These statements are based on a number of assumptions, including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of regulatory and governmental approvals for the transactions described herein, the ability of Paragon and other relevant parties to satisfy stock exchange and other regulatory requirements in a timely manner, the availability of financing for Paragon's proposed transactions and exploration and development programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially.

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

Contact Information

  • Paragon Minerals Corporation
    Bill Cavalluzzo
    VP Investor Relations
    Toll Free: 1-877-533-6353
    Website: www.paragonminerals.com