Channel Resources Ltd.

Channel Resources Ltd.

November 12, 2008 09:22 ET

Channel Enters Into Letter of Intent for Option to Acquire Alberta Lithium Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2008) - Channel Resources Ltd. ("Channel" or the "Company") (TSX VENTURE:CHU) announces that it has entered into a Letter of Intent ("LOI") with Polaris Capital Ltd. ("Polaris"), a private company, for the acquisition of a 100% interest in the Fox Creek Lithium Project ("Fox Creek"), located approximately 200 kilometres west of Edmonton, Alberta.

The Fox Creek permit encompasses approximately 260 square kilometres over aquifers identified, through province-wide Government of Alberta studies on formation water geochemistry, to have potentially economic concentrations of lithium. Data used in these studies were compiled from regulatory submissions by the petroleum industry as well as from unpublished data sets. The studies indicate that formation waters with lithium concentrations comparable to those of brines found at Clayton Valley, Nevada, which has been in production since the 1960s, are contained at Fox Creek in Devonian age rocks at depths of approximately 3,200 metres. Over 100 existing wells drilled by oil and gas companies are known to have penetrated the target aquifer.

Lithium is used in a wide variety of products including glass, ceramics, aluminum production, lubricants, pharmaceuticals and batteries, especially those used in consumer and industrial electronics. Demand is projected to increase significantly with the further development of lithium-ion batteries for use in electric and hybrid-electric vehicles and it is this growth area that is expected to drive the price of lithium carbonate for the short and medium terms.

The LOI with Polaris, with a cash consideration of C$10,000, grants to Channel a four month exclusive period to assess the potential of Fox Creek and to formalize an option agreement (the "Agreement") for the acquisition of 100% interest in the project, subject to a 2% NSR royalty. The major terms in the Agreement have been agreed to include:

- Payment of $10,000 and 1,000,000 common shares of Channel to Polaris upon execution of the Agreement;

- Payment of $10,000 and 1,000,000 common shares of Channel to Polaris on each of the first four anniversary dates of the Agreement;

- Following full exercise of the purchase option, the 2% NSR royalty may be purchased at Channel's discretion at any time for consideration of C$2,000,000.

The Agreement will be subject to the approval of the TSX Venture Exchange.

The above information has been prepared under the supervision of Colin H. McAleenan, P.Geo, who is the Company's "Qualified Person" under the definition of NI 43-101.

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, whether as a result of new information or future events or otherwise.

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

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