Westcore Energy Ltd.

April 22, 2010 19:48 ET

Westcore Announces Agreement with 49 North to Acquire Interests in Additional Manitoba Coal Permits

CALGARY, ALBERTA--(Marketwire - April 22, 2010) - Westcore Energy Ltd. (TSX VENTURE:WTR)("Westcore" or the "Corporation") is pleased to report that it has entered into a binding agreement with 49 North Resources Inc. ("49 North") to acquire interests in Manitoba Quarry Exploration Permits in respect of an aggregate of 10,273 hectares of lands that are immediately adjacent to the Corporation's Manitoba properties. Two Permits have been granted by the Mines Branch of Manitoba Innovation, Energy and Mines (in respect of an aggregate of 8,653 hectares) and a further three applications (in respect of an aggregate of 1,620 hectares) are pending. Westcore will initially acquire a 50% interest in the foregoing permits and pending permits, together with all rights attaching to them (collectively, the "Assets"), with the ability to increase this interest to as much as 80%. The consideration payable under this agreement will consist of the issuance of an aggregate of 1,000,000 common shares in the capital of Westcore, together with a cash payment in the amount of $250,000. Under the agreement, Westcore will operate all exploration and drilling activities in respect of the Assets and will bear responsibility for all exploration expenditures and related costs (including insurance and maintenance costs such as taxes, fees and rents required to keep the Assets in good standing) until such time as a bankable feasibility study is completed. Westcore is obliged to expend not less than $500,000 on exploration expenses in respect of these properties during its 2010 – 2011 exploration program and will earn additional interests in these Assets based upon the following:

  1. Provided that Westcore incurs and pays exploration expenditures in excess of $1,000,000 on or before December 31, 2012, Westcore will earn a further 10% interest in the Assets;
  2. Provided that Westcore completes a bankable feasibility study in respect of the Assets on or before December 31, 2013, Westcore will earn a further 20% interest in the Assets, following which the parties will share subsequent exploration expenditures and related costs in proportion to their ownership interests.

The 49 North property is located immediately east of Westcore's Black Diamond Property. Although no historical drilling has been conducted within the property boundary, the area is mapped as being underlain by the Mannville Formation. This is the same unit that hosts all the recent coal discoveries made by a number of companies in both Saskatchewan and Manitoba since Goldsource Mines Inc. made their initial coal discovery in 2008 (see Goldsource news release dated April 22, 2008). There is a high potential for coal to exist on the 49 North property due to its proximity to Westcore's Black Diamond Property, where 4 new discoveries have been made in the past year (see Westcore news releases dated April 9, 2009, and March 22, 2010). The Westcore discoveries occur as a string of deposits running north-south along the eastern border of the property (see Figure 1), and there is evidence from Westcore's airborne geophysical data that at least one of their undrilled targets straddles the boundary separating the two properties. Westcore has also had an opportunity to review a 2009 airborne geophysical study extending over the 49 North property. Based upon this review and having regard to its own results and discoveries on its Black Diamond Property, Westcore is very encouraged about the prospects of further discoveries on the 49 North property. It is believed that any coal deposits discovered on 49 North's property have the potential of occurring even closer to surface than Westcore's deposits, due to what appears to be a regional trend of shallowing of the Mannville Formation and a thinning of glacial overburden from west to east.

Paul Conroy, President and CEO, states: "Westcore is extremely excited about this agreement with 49 North. With the success of our winter drilling program in Manitoba, we look forward to the prospect of extending our interests and our discoveries further east on the 49 North lands and further developing and proving up this entire area play. Having regard to the proximity of these lands and the extension of our geological and geophysical analysis, we are very optimistic about these prospects and intend to make them top priorities in our 2010 – 2011 drilling program."

This transaction and the common shares issuable hereunder are subject to the review and approval of the TSX Venture Exchange.

As 49 North currently holds in excess of 10% of the outstanding voting securities of Westcore, it is considered to be an "Insider" and a "Non-Arm's Length Party" vis-à-vis Westcore. Accordingly, this transaction is considered to be a "related party transaction". Management of Westcore has determined that exemptions will apply in respect of the valuation and minority approval requirements that arise under applicable securities laws in respect of related party transactions.

Ellen MacNeill, Professional Geoscientist in the Province of Saskatchewan and Qualified Person for this news release, has reviewed and approved its contents.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

To view the 49 North Coal Quarry Permit Location Map, please visit the following link: http://media3.marketwire.com/docs/422wtr.pdf.

Neither 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 the release.

Contact Information

  • Westcore Energy Ltd.
    Paul Conroy
    President and Chief Executive Officer
    (403) 697-4005
    (403) 263-0271 (FAX)