Canoro Resources Ltd.

Canoro Resources Ltd.

April 03, 2006 08:00 ET

Canoro and Brownstone Enter into Letter of Intent for a Farmout of a Portion of AA-ON/7 and AA-ONN-2003/2 Exploration Blocks

CALGARY, ALBERTA--(CCNMatthews - April 3, 2006) - Canoro Resources Ltd. (TSX VENTURE:CNS) and Brownstone Ventures Inc. (TSX VENTURE:BWN), have entered into a Letter of Intent, whereby Canoro is farming out to Brownstone, a 15% participating interest in its AA-ON/7 and AA-ONN-2003/2 exploration blocks in northeast India, subject to partner and Government of India approvals. Canoro and Brownstone have also agreed to work together on future opportunities in India for the next three years.

To earn a 15% participating interest in both blocks, Brownstone will be paying Canoro US$2 million of Canoro's past costs and current 2-D seismic program costs. In addition, Canoro will be issued 400,000 common shares and 200,000 options of Brownstone from treasury. The options can be exercised at a price of $2.20 per option for a period of five years from the date of issue.

Proceeds from Brownstone, along with C$4.8 million received through the exercise of Canoro warrants during the first quarter of 2006, enhances Canoro's cash position for its ongoing development and exploration drilling programs on the Company's three blocks in India.

Canoro's existing partners in each block have pre-emptive rights on the same terms and conditions as the letter of intent on any transfer of interest by Canoro.

This transaction benefits both Canoro and Brownstone. Canoro's balance sheet is strengthened and its capital exposure to exploration reduced, providing flexibility for development expenditures for the Amguri field and NELP VI. For Brownstone, it provides an entry point into India's tight oil and gas market and a partner for future projects in India.

Canoro is a Canadian-based international oil and gas company operating in the prolific Assam/Arakan basin of northeast India. The Company has restored production from the suspended Amguri oil and gas field. Canoro is the operator of Amguri and has a 60% working interest. Canoro is the operator with a post-farmin 50% working interest in the 1,445 km2 AA-ON/7 exploration block, and has a post-farmin 15% non-operated working interest in the 295 km2 AA-ONN 2003/02 exploration block. Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.

Brownstone Ventures Inc. is an investment company with investments predominantly in natural resource related companies, a direct interest in oil and gas and an approximate 7% equity interest in Mega Uranium Ltd. Common shares of Brownstone trade on the TSX Venture Exchange under the symbol BWN.

Certain statements contained in this news release may be considered as "forward looking". Such statements are generally identifiable by the terminology used, such as "intend", "plan", "expect", "appears", "estimate", "budget", "outlook" or other similar words. Such "forward looking" statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Canoro Resources Ltd.
    Rob McInnis
    Director, Investor Relations and New Ventures
    (403) 543 - 5748
    (403) 543 - 5740 (FAX)
    Canoro Resources Ltd.
    2810, 715 - 5th Ave SW
    Calgary, Alberta T2P 2X6