Poplar Creek Resources Inc.

November 28, 2008 18:32 ET

Poplar Creek Resources Inc. Announces Progress of Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2008) -


Further to the news release of August 8, 2008, Poplar Creek Resources Inc. ("Poplar Creek" or the "Corporation") (TSX VENTURE:PCK.P) on the TSX Venture Exchange (the "Exchange") announces that certain documentation relating to the proposed Qualifying Transaction has been submitted to the Exchange pursuant to Exchange Policy 2.4 Capital Pool Company (the "CPC Policy") and the Exchange has granted the Corporation's application to exempt the requirement for a Sponsor and has indicated that the shares will resume trading upon issuance of a "Resume Trading Bulletin".

The proposed Qualifying Transaction is the acquisition ("Acquisition") of a 100% interest in Alberta Crown Oil Sands Lease No. 7406120425 (the "Oil Sands Lease" or "Lease LO 425") comprising five sections (3,200 acres) and located approximately 60 miles north of Fort McMurray, Alberta with a legal description: sections 28, 29, 30, 32 and 33, T99-R09-W4, for the consideration of $150,000 cash, 1,800,000 Poplar Creek common shares (the "Vendors' Shares") issued at a deemed price of $0.25 each and a 2.5% overriding royalty agreement. The consideration is payable 2/3 to Keppoch Energy Ltd. ("Keppoch") and 1/3 to Pan Pacific Land Corporation ("Pan Pacific"), both of Calgary, Alberta (collectively, Keppoch and Pan Pacific are referred to as the "Vendors").

The Acquisition will constitute a Qualifying Transaction of the Corporation as defined in the CPC Policy and upon issuance of a Final Exchange Bulletin, the Corporation will be classified as a Tier 2 Category 3 Oil and Gas Issuer.

The cash position of Poplar Creek at this time is approximately $1,411,000 after payment to the Vendors. No financing was deemed to be required to complete the Acquisition or to undertake the proposed exploration program.

Post-closing of the Acquisition, Poplar Creek will have 13,834,000 shares issued and outstanding (of which 3,800,000 shares which were issued to the founders of Poplar Creek are subject to a 3 year escrow agreement with releases of 10% on issuance of the Final Exchange Bulletin and 15% every six months thereafter, all in accordance with the CPC Policy). There are outstanding options to directors and officers to purchase 1,190,000 shares at $0.20 each plus outstanding agent's options to Blackmont Capital Inc., the agent on the Corporation's IPO, to purchase 676,000 shares at $0.20 each until April 18, 2009.

The directors of Poplar Creek, who were the directors on the IPO, will remain the same. They are Donald G.J. Dutton, Lee Nichols, Gregory R. Harris, George Watson, James H. Decker and Barry Davies. Donald G. J. Dutton will continue as the President and CEO and George Watson has been appointed CFO. Mr. Howard Keele, who was appointed Vice-President Exploration in July 2007, has resigned.

Poplar Creek and the Vendors are at arm's length. Post-closing Keppoch will own approximately 8.7% and Pan Pacific approximately 4.3% of the issued and outstanding shares. The Vendors' Shares will have a four month trading restriction and will not be subject to escrow restrictions.

The Jackson Report

Poplar Creek retained George Jackson, P. Geol., 1165150 Alberta Ltd. of Calgary, Alberta to prepare a technical report (the "Jackson Report") within National Instrument 51-101 and GOGE Handbook standards on the Lease. The author of the Jackson Report is independent and arm's length from the Corporation. The Jackson Report with an effective date of November 10, 2008, has been reviewed by the Exchange and is acceptable as part of the supporting documentation for the Qualifying Transaction. The Jackson Report has been filed in its entirety on www.sedar.com. The following is a summary of the Jackson Report:

Athabasca Oil Sands Lease 7406120425 (Lease LO 425) is located in northeastern Alberta near the as yet undelineated northern terminus of commercially exploitable surface mineable oil sands deposits. The Athabasca River occupies approximately the western half of sections 30 and 32 of the subject lease and the lease is surrounded by other oil sands leaseholds. No physical outcroppings of oil sands are known on the Oil Sands Lease, nor are there any bore holes on the lease that intersect oil sand. However, publicly available drill hole data from recent drilling completed by other companies has revealed that oil sands do occur within one mile of the leases' western boundary, and extend at least two miles north of the Lease's northern boundary.

Geological mapping, incorporating data from more than 100 bore holes in the vicinity of the Oil Sands Lease, together with the presence of operating and proposed oil sands mining operations within eighteen miles of the lease indicate that the lease has potential and is deserving of further exploration. A $1,210,000 ($1.21 million) 5-well core drilling and sampling program is recommended for the property to confirm the presence of oil sand and define trends for potential oil sand development.

Lease LO 425 was acquired from The Alberta Crown on December 13, 2006 and has a primary lease term of fifteen years, subject to the annual payment of applicable rentals. Access to the lease is gained via a combination of provincial highways, winter access roads and seismic cut lines. The region is a boreal mixed wood forest. Reasonably well drained terrain is prevalent throughout the area. Poorly drained areas are covered by small ponds, open bogs, muskeg swamps and organic soils. The bogs and swamps are sufficient in number to prevent year-round wheeled vehicle access to the area, so winter access only exploration drilling conditions are in effect.

Lease LO 425 lies within Alberta's Athabasca oil sands area defined by the Energy Resources Conservation Board (ERCB). Until recently, very little outcrop or publicly available borehole data existed to define the northward extent of preserved oil sand accumulations near Lease LO 425. In June, 2006, Synenco Energy Inc. applied to Alberta Energy and Utilities Board and Alberta Environment for approval to their proposed Northern Lights Mining and Extraction Project located in portions of Townships 98 and 99, Range 5,6 and 7W4M. At the present time, this is the closest well-defined mineable oil sands deposit relative to the Lease LO 425. The closest proposed open pit in the Northern Lights Project is located about fifteen miles southeast of Lease LO 425. The Synenco application describes the thickness of McMurray Formation oil sands in their project area to range from zero where it has been removed by erosion, to more than 100 m in some locations. The variation in thickness is attributed to high relief on the Devonian erosional surface combined with the irregularity of erosion by post-McMurray processes. The maximum oil sands thickness occurs within low areas on the Devonian surface, while the McMurray Formation is thin or absent on the Devonian highs and where Quaternary erosion is deep. The Synenco application states further that overburden (that material lying above the ore body) consists of Holocene, Pleistocene, rare Clearwater, and non-bitumen bearing McMurray sediments with Pleistocene (glacial) sediments forming the majority of the overburden.

Published government reports, Synenco's detailed application for approval to their Northern Lights Mining and Extraction Project, and the three 3-well cross sections discussed in the report all conclude that McMurray formation oil sand accumulations this far north occur primarily as non-continuous pods of oil sand contained within structural lows on the Devonian surface. Available drill logs for nearly one hundred of the wells shown on the McMurray Oil Sand Distribution map (viewable on SEDAR) were analyzed with respect to presence or absence of oil sand and elevation of the Devonian surface. The map is overly simplistic in areas with low drill hole density, but it does demonstrate that Lease LO 425 lies within an area of potential oil sand accumulation. The map also demonstrates that the extent of individual oil sand pods within the area is highly variable. Therefore, it is not possible to quantify the potential oil sand resource on the lease. Based on the generic estimate of undiscovered petroleum initial-in-place ("PIIP") (equivalent to undiscovered resources) described in the report for a typical oil sands project in the area, Lease LO425 may have potential to contain a petroleum resource. PIIP as per the Canadian Oil and Gas Evaluation Handbook Volume 1 is defined as "that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered." There is no certainty that any portions of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. To date there have been no drill hole intersections or any known outcroppings of oil sands on Lease LO 425.

Exploration and development drilling, accompanied by appropriate core sample collection and downhole geophysical logs is the only available method to assess the lease's oil sand potential. Nearby drilling programs have demonstrated how variable the distribution of oil sand can be and have shown that one well per section is insufficient to confirm or deny the presence of oil sand. A preliminary five well drilling and coring program is recommended for the lease. Subsequent drilling programs can be designed to delineate the trends of any oil sand occurrences recorded in these first five wells.

This far north in the Athabasca oil sand deposit, the variability of oil sand in terms of depth of occurrence, thickness and continuity is recognized. There is a risk that any of the five proposed wells will not encounter oil sand. Evaluations should be undertaken at the conclusion of field data collection from each well at which time go-forward decisions can be made for subsequent wells.

Filing Statement

The Corporation has submitted a Filing Statement (the "Filing Statement") to the Exchange which has been accepted and has been filed on www.sedar.com. The closing of the Acquisition will only occur at least seven days thereafter. A further news release will be issued upon closing of the Acquisition.

Trading Resumption

Trading of the Poplar Creek shares was halted at the request of the Corporation on August 8, 2008 and has remained halted since then. Trading will resume on the opening of trading on Wednesday, December 3, 2008 upon issuance by the Exchange of a Bulletin.

This news release has been reviewed and approved for issuance by the Board of Directors of Poplar Creek.

Investors are cautioned that, except as disclosed in the Filing Statement of the Corporation any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

For more information on Poplar Creek Resources Inc., investors should review the Corporation's filings which are available at www.sedar.com.

George Jackson, a qualified person as defined in National Instrument 51-101, supervised the preparation of the technical information in this release.

This release includes certain statements that may be deemed "forward looking statements". All statements in this release, other than statements of historical facts, which address future exploration drilling and activity, reserves potential, and events or developments that the Corporation intends, plans, anticipates, believes, estimates or expects are forward looking statements. Actual results may differ materially. Although the Corporation believes such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could cause results to differ materially from those in the forward looking statements include, but are not limited to: availability and costing of exploration contractors; exploration success; continued availability of capital government regulations, laws and charges; environmental developments; exploitation economics; and generally the economic, market, financial and business conditions in the present volatile and uncertain economic period. Investors are cautioned that any statements are not guarantees of future performance and actual results or developments may differ materially from those stated in the forward looking statements. The Company does not intend, and does not assume any obligation to update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Poplar Creek.

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

Contact Information

  • Poplar Creek Resources Inc.
    Donald G. J. Dutton
    President & CEO
    (403) 471-5640
    Poplar Creek Resources Inc.
    Gregory R. Harris
    (403) 777-9222