SOURCE: Bayswater Uranium Corporation

July 10, 2007 08:30 ET

Bayswater Enters Into Agreement With Stornoway to Explore Diamond Targets at Itza Lake Property, Nunavut

VANCOUVER, BC--(Marketwire - July 10, 2007) - Bayswater Uranium Corporation (TSX-V: BAY) is pleased to announce the Company has entered into an agreement with Stornoway Diamond Corporation (TSX: SWY) to explore Bayswater's 430,738 hectare (1,064,353 acres) Itza Lake property for diamonds. Located 80 kilometres northwest of the hamlet of Baker Lake, Nunavut, marginal to the North Thelon Basin, Itza Lake's diamond potential was recognized late last year through an airborne geophysical survey that identified a number of circular, magnetic features, similar to those associated with kimberlite pipes, the primary host rock for diamonds. As the survey covered only about 20% of the current property, which was expanded in early 2007, there is strong potential to locate further kimberlite targets. The agreement with Stornoway enables Bayswater to focus on uranium exploration at Itza Lake while benefiting from the property's diamond potential.

Under the terms of the Letter Agreement, Stornoway can earn a 60% interest in the diamond rights at Itza Lake by issuing $75,000 worth of Stornoway shares to Bayswater and incurring $4,000,000 in exploration expenditures over five years -- a minimum of $500,000 must be spent before September 1, 2008. Furthermore, Bayswater will receive 25,000 shares of Stornoway or $40,000 in cash, at Stornoway's election, for each geographically distinct, in-situ kimberlite body, up to a maximum of ten bodies, identified on the property. Bayswater will receive a further 50,000 shares or $200,000 in cash, at Stornoway's election, for each kimberlite which returns greater than 75 carats per hundred tonnes (based on diamonds recovered on a 0.85 mm square mesh sieve) from a minimum one tonne sample.

Upon Stornoway earning its 60% interest, Bayswater has thirty days to elect to form a joint venture whereby Stornoway will contribute 60% and Bayswater shall contribute 40% of all future expenditures on the property. Provided Stornoway earns a 60% interest and Bayswater elects not to form a joint venture within thirty days, Stornoway has a further thirty days to elect to proceed to earn a further 20% interest in the diamond rights to the Itza property (bringing its total property interest to 80%) by funding all work towards the completion of a bankable feasibility study on the property. Provided Stornoway earns an 80% interest in the diamond rights to Itza, the partners shall enter into a joint venture whereby each partner will contribute its pro-rata share of all future expenditures on the property.

George Leary, President of Bayswater, states, "This partnership enables Bayswater to increase Itza's value while keeping our exploration efforts focused on the property's excellent uranium potential. It also serves as a deal model for our other properties where we also have discovered potential diamond targets including the Central Mineral Belt in Labrador, and in the South Thelon Basin." Added Mr. Leary, "As a well financed diamond explorer with extensive experience in the Arctic, Stornoway makes an ideal partner to explore and develop the diamond potential of the Itza Lake properties."

Eira Thomas, CEO of Stornoway, comments, "We're delighted to have the opportunity to explore for diamonds at Itza Lake. The initial anomalies identified by Bayswater's first survey are attractive targets; since only a portion of the property has been covered, there is excellent opportunity to find additional targets through more extensive detailed airborne surveys."

Bayswater's large Itza Lake property is comprised of a continuous land package consisting of 1,024,353 acres owned 100% by Bayswater and a 40,000 acre permit area held under the Canada Uranium Joint Venture with Strongbow Exploration Inc. (TSX-V: SBW). The land package is located close to diamond company De Beers' land holdings in the region.

A property map showing the magnetic clusters can be viewed at http://www.bayswateruranium.com/i/misc/Itza-Kimberlites.jpg

About Bayswater Uranium Corporation -- The Super Junior™ Uranium Company

As the only uranium explorer to have major landholdings in each of Canada's most important producing and exploration regions -- the Athabasca Basin, the Central Mineral Belt, and the Thelon Basin -- Bayswater Uranium Corp. is well positioned to be a market leader in uranium exploration. Bayswater combines the uranium expertise of its technical and managerial teams with a large, highly prospective and diverse property base. The result is a Super Junior™ Uranium Company with the share liquidity and market capitalization to provide value to both the retail and institutional investor.

For further information visit www.bayswateruranium.com.

On behalf of the Board of:

BAYSWATER URANIUM CORPORATION

George M. Leary
President
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents herein.

Contact Information

  • For further information contact:

    John Gomez
    Manager, Investor Relations
    Telephone: (604) 687-2153