RX Exploration Inc.

December 16, 2009 18:38 ET

RX Exploration Commences De-Watering Program and Intends $500,000 Private Placement

TORONTO, ONTARIO--(Marketwire - Dec. 16, 2009) - RX Exploration Inc. (CNSX:RXE) (the "Company") is pleased to make the following announcements.

De-watering Program

The Company is pleased to announce the successful start-up and commissioning of its new $500,000 water treatment plant and pumping system constructed in the #1 hoist room on the 400 level of the Drumlummon Mine. The plant will allow the Company to de-water the mine below the 400 level. This will provide access to enable exploration of mineralized targets at depths below where inferred resources are currently defined and mining of gold and silver mineralization remaining in the "D" Block of the Drumlummon vein and in the recently discovered Charly vein system. The terms of the water discharge permit issued by the Montana Department of Environmental Quality (DEQ) stipulate a maximum arsenic content of 3 parts per billion (ppb) in discharged water at a maximum discharge rate of 400 gallons per minute (gpm) with discharge to groundwater. Although the U.S. drinking water standard is 10 ppb, the DEQ based its lower non-degradation standard on the measured 3 ppb level of Silver Creek, the closest stream to the mine. Initial measurements of water discharge from the treatment plant are below the allowable discharge limit.

DEQ representative, Robert Cronholm, publicly commented that "RX Exploration is complying with state regulations. They're doing what we've asked them to do."

The contract for the design and construction of the plant was awarded to CDM Inc, through their Helena branch office. CDM is an international engineering and construction firm headquartered in Cambridge, Massachusetts. The plant is arsenic specific and uses an iron based absorption media to bond with the arsenic. Design capacity of the plant is 300 gpm based on twin streams of 150 gpm each. Each stream enters a leading (cleaner) tank then flows into the lagging (polishing) tank before discharge into a HDPE pipe to an abandoned rail bed where 2600 feet of buried perforated pipe distributes the water to underlying groundwater.

Randall Huffsmith, Vice-President of CDM commented "RX Exploration has chosen a dependable treatment technology that was developed and proven in the drinking water industry in response to the 10 ppb arsenic drinking water standard. This technology will allow RX Exploration to successfully continue exploration and mining in an environmentally responsible manner."

RX calculations indicate that 42 million gallons of water need to be pumped to de-water to the 600 level. At 300 gpm this will take 120 days of pumping at 24 hours per day. Re-timbering of the #1 shaft is proceeding as the water level recedes. The water is presently at the 440 foot level.

Private Placement

The Company intends to complete a private placement of up to $500,000 consisting of 1,666,667 units at $0.30 per unit. Each unit will consist of one common share and one share purchase warrant. Each warrant will entitle the holder to purchase one additional common share for two years from closing at $0.40 per share. The expiry date will be accelerated to thirty days from the tenth consecutive trading day on which the common shares of the Company close at or above $0.60. The securities will be subject to a four month hold period from closing.

Commissions or finder's fees of 9% cash and 10% compensation options will be paid on this offering where appropriate. The compensation options will be exercisable at $0.30 per share for a two year period. The net proceeds will be used primarily for exploration and development on the Company's principal property, the Drumlummon Mine in Montana, general administrative expenses, and working capital.

About RX Exploration

RX Exploration (CNSX Symbol: RXE) is a gold exploration company whose strategy is to re-examine gold projects within North America that have previously reached advanced exploration, underground development or past gold production. The company is currently focused on re-starting the Drumlummon mine, a Bonanza-grade past producing underground gold-silver mine in Montana.

RX Exploration Inc. is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNSX (Symbol: RXE). There are 83,114,911 common shares issued and outstanding.

Forward Looking Statements: Statements made in this news release that relate to future plans, expectations, events or performances are forward looking statements. Such statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • RX Exploration Inc.
    Murray R. Nye
    (204) 989-2434
    RX Exploration Inc.
    John F. O'Donnell
    Chairman of the Board
    (416) 862-7330