RX Exploration Inc.
CNQ : RXEX

November 20, 2007 13:05 ET

RX Exploration Inc. Engages IBK Capital Corp. to Complete $8.5 Million Financing

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2007) - RX Exploration Inc. ("the Company") (CNQ:RXEX) is pleased to announce that it has retained the services of IBK Capital Corp. ("IBK") to act as its agent to raise an aggregate amount of $8.5 million through the following private placements:

1. A private placement of 3,333,333 common shares issued at a price of $0.15 per common share for total gross proceeds of $500,000. This seed capital offering is scheduled to close on or around November 21, 2007;

2. A private placement offering of 10,000,000 units of common shares and warrants ("Units") at a price of $0.50 per Unit, for total gross proceeds of $5,000,000. Each Unit will consist of one common share and one common share purchase warrant exercisable for two years at $0.75 per common share ("Hard Dollar Offering"); and,

3. A private placement offering of 6,000,000 units of flow-through common shares and warrants ("Flow-Through Units") at a price of $0.50 per Flow-Through Unit, for total gross proceeds of $3,000,000. Each Flow-Through Unit will consist of one common share and one-half common share purchase warrant exercisable for two years at $0.75 per common share ("Flow-Through Dollar Offering").

Hard Dollar Offering

The net proceeds of the Hard Dollar Offering will be used primarily to fund an underground drilling program on the Company's Drumlummon Mine property at Marysville, Montana, one of the larger former producers of gold and silver in the Western United States. Historical mine production of precious metals was 1.1 to 1.2 million tons with an average grade of 0.5 ounce/ton gold in addition to the silver content. The Drumlummon mine is of the "bonanza"- type epithermal deposits which are very young and low temperature in origin and which can produce high grades over large widths. For a number of reasons, including a 20-year lawsuit between competing mining companies, there are substantial areas in the mine which have never been developed and have been flooded since 1901.

Between 1946 and 1951, gold, silver, copper, lead, and zinc were recovered from the mine by former owner, William Wade who describes gold results from the Xmas Vein. The ore shoot was 600 feet long, 12 to 14 feet wide and stoped $16.50 between the 800 and 700 (0.47 oz/ton) and $24 between the 600 and 700 (0.69 oz/ton) and above the 600 went to $35 (1.0 oz/ton) and up to $50 per ton (1.43 oz/ton). The mining activities of Mr. Wade were curtailed in 1950 when his mill burned down. 12 years after the disastrous fire that resulted in the shut down of his mine, Mr. Wade, the last person to mine the Drumlunnon, wrote in a 1962 report that "the ore of the camp generally averages 0.5 oz. gold and 6 oz. silver, recovered values, plus whatever is lost in the tailings". He went on to say that "there is a reasonable expectation that several ore-bodies exist in this group similar to the Drumlummon".

The Company plans to commence an underground drilling program to establish the validity of this historic information, which was not calculated in accordance with current standards, and are reported here for completeness only. Mineral reserves have been presented by prior operators but it is not currently possible to present mineral resource and mineral reserve estimates as estimates in compliance with section 2.4 of National Instrument 43-101 are not in existence. The Company plans to test certain virgin exploration areas containing the Drumlummon Lode and parallel and intersecting lodes. Previously disputed ground is considered a prime target and will also be tested, for the first time ever. A program of rehabilitation of the 400 Level, crosscutting to establish drill stations, and underground diamond drilling will test vertical sections of these targets in detail.

The Drumlummon mine is covered in its entirety by 26 contiguous surveyed, patented mineral claims dating to the early days of mining in the 1870's, and covering an area of approximately 290 acres. A further group of 68 contiguous unpatented mineral claims was staked on behalf of the Company in 2007. These claims overlap the southern part of the patented claims and extend for another 2 miles to the southwest covering a total area of approximately 1,390 acres.

A more detailed description of the property can be found in the Company's news release and National Instrument 43-101 compliant technical report filed on www.sedar.com on September 5, 2007.

Timothy J. Beesley, P.Eng., of T.J. Beesley Geological Services Inc., is a "qualified person" within the meaning of National Instrument 43-101 and is responsible for the technical information contained in this news release regarding the Drumlummon Mine.

Flow-Through Offering

Net proceeds of the Flow-Through Offering will be used to fund exploration work on the Company's Veekay Lake-Zulapa project located on and adjacent to the Eabametoong First Nation lands and the community of Fort Hope, Ontario.

The Fort Hope area is hosted by the same Archean greenstone belt as the Pickle Lake and world-famous Red Lake gold mining camps, and local exploration has been driven by deposit models based on these mining camps.

The Zulapa Deposit (also known as the Reserve Lake Prospect; Little Long Lac Prospect; Lac-Reserve Prospect; Reserve #2 property (A and B Zones) was discovered in 1942 by V.K. Prest who reported quartz veins on the north shore of Reserve Lake while mapping the area for the Ontario Department of Mines. Little work was conducted in the area until 1960, when trenching, stripping and blasting revealed visible gold over an area 1000 ft x 400 ft. Assays of samples collected during this work returned up to 10 ounces per ton gold (reported by Oja). Prospecting by Little Long Lac Gold Mines Limited also discovered gold in quartz veins north of the original discovery. Subsequent drilling of 27 AXT drill holes in 1961 (total of 7,087 ft) drilled by Lac yielded visible gold in 11 holes. 18 holes were drilled in the A Zone, 6 holes in the B Zone, and 3 holes outside the A Zone. Consequently, Lac calculated reserves of 1,041 tons per vertical ft grading 0.28 ounces per ton gold.

In the fall of 1960, the Federal Government withdrew the Reserve from further staking as a staking rush was developing (Zulapa Mining Corporation, shareholders letter) due to the encouraging prospecting and drill results.

In 1961, the Reserve #1 group consisting of 17 contiguous unpatented claims at the west end of Reserve Lake were acquired by Zulapa Mining Corporation. Zulapa Mining Corporation Ltd. also acquired the Lac claims north of the lake in 1963, with the claim group termed (Reserve No. 2). Drilling was carried out by Zulapa, which drilled 55 drill holes, with 21 holes having visible gold. In 1968, Zulapa recommended an exploration shaft be sunk, but no record of its undertaking is available.

Reserve estimates were calculated on a number of mineralized zones, but were not calculated in accordance with current standards, and are reported here for completeness only. Historical mineral resource estimates included here for Reserve Creek were not verified, and were calculated using methods that were standard in the industry at that time. Lac (W. Maybank) calculated reserves of 1,041 tons per vertical ft grading 0.28 opt (Ontario Dept of Mines and Northern Affairs, Operation Fort Hope, Misc. Paper 42; 1970).

- Indicated 300,000 tons to 300 ft and 700,000 tons to 700 ft (OGS Open File Report 5926)

- 170,000 tons (drill indicated) grading 0.28 opt to 300 ft (Zulapa) (OGS Open File Report 5926)

- George Darling report (Summary Report B Lac-Reserve Prospect, Little Long Lac Gold Mines Limited, Fort Hope Area; George B. Darling, 1962)

- A Zone: 885.4 tons per foot of depth, grading 0.255 opt gold (uncut and before dilution)

- B Zone: 156 tons per foot of depth, grading 0.338 opt gold (uncut and before dilution)

- Total: 1041 tons per foot depth grading 0.267 opt gold (uncut and before dilution)

The Company entered into an option and joint venture agreement dated October 21, 2005 with Wabassi River Resources Inc. ("Wabassi"), an arm's length company controlled by John R. Moses and John C. Gingerich, to acquire an undivided 50% interest in 108 unpatented mining claim units. The First Nation entered into a Memorandum of Understanding with Geotechnical Business Solutions Inc. ("GBS") to assist the First Nation in the exploration and development of mineral deposits both on the First Nation land (AI.R. 64, Fort Hope) and adjacent to it. GBS is in the process of obtaining a more formal agreement with the First Nation, whereupon GBS will assign and transfer to Wabassi 100% of its interest in the mineral and other appurtenant rights comprising the land which formerly encompassed the Zulapa Prospect and it will become part of the joint venture with the Company.

This information in this news release is from the National Instrument 43-101 compliant technical report prepared for the Company by John Rae, a "qualified person" within the meaning of the instrument. The full report was filed at www.sedar.com on July 21, 2006.

Other Corporate News

The Board of Directors has agreed to change the name of the Company to MONTANA MINING INTERNATIONAL INC., subject to the approvals of the shareholders and the Director under the Business Corporations Act (Ontario). John F. O'Donnell has been appointed to fill the vacancy created by an increase in the number of directors and he will serve as Chairman of the Board. John practices corporate and securities law in Toronto. He has been counsel to and has been instrumental in creating and reorganizing several publicly traded companies, including mineral exploration companies.

About IBK Capital Corp.

John O'Donnell said: "I have worked with IBK Capital in the past and we are pleased to work with their professional staff to raise the necessary capital to proceed with our projects. IBK's reputation is excellent and they have a worldwide network of contacts to help us bring our projects to fruition. The IBK Team has an impressive history in the financings of mining projects world wide. Bill White said "IBK Capital is delighted to be part of this exciting team, especially at this early stage in the Company's development."

RX Exploration Inc. (CUSIP # 78347W107) is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNQ (Symbol: RXEX). There are currently 23,033,675 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.

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

Contact Information

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