Colorado Resources Ltd.
TSX VENTURE : CXO

Colorado Resources Ltd.

March 29, 2011 15:23 ET

COLORADO Announces-Approval on Agreement With OSISKO MINING by KINROSS

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 29, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

COLORADO RESOURCES LTD. (TSX VENTURE:CXO) ("Colorado" or the "Company") is pleased to announce further to its release of February 9, 2011 it has received TSX Venture Exchange (the "Exchange") acceptance of the Letter of Agreement (the "Assignment") with Osisko Mining Corporation ("Osisko) wherein Osisko will assign certain non-core property rights in four British Columbia properties acquired through Osisko's acquisition of Brett Resources under an exploration agreement ("PP Agreement") between Brett Resources and Kinross Gold Corporation ("Kinross"). In addition, Colorado will acquire from Osisko the Santa Clara Property located in El Salvador and an Exploration License Application for the Sabalos concession located in Nicaragua (both also former non-core assets formerly held by Brett Resources).

Osisko further to receipt of Kinross' approval, has assigned all of its rights, interests and obligations under the PP Agreement to Colorado. 

In return for assigning the property rights to Colorado as described, Osisko will receive from Colorado an aggregate 200,000 shares in the capital of Colorado (the "Colorado Shares") as follows: 

  1. 100,000 Colorado Shares within ten (10) business days following TSX Venture Exchange ("Exchange") approval of the transaction and the Assignment (issued);

  2. 50,000 common shares upon receipt by BRES of a government drill permit to conduct exploration work on the Santa Clara Property; and

  3. 50,000 common shares upon receipt by Alicante of an approved exploration concession for the License Application concerning the Sabalos concession.

In accordance with the terms of the Letter Agreement Osisko will participate for $500,0000 in the Company's Brokered Offering announced today (See News Release dated March 29, 2011) for 555,555 units at a price of $0.90 per unit (the "Unit"). Each Unit will consist of one share (a "Share") and one half of one common share purchase warrant. One full common share purchase warrant (a "Warrant") will permit the holder to purchase a further common share (a "Warrant Share") for a period of 24 months from closing at a price of $1.25 per Warrant.

The net proceeds from the Offering will be used to fund continued development of the Company's exploration properties including the Oro Gold Property in the Yukon and for general working capital purposes.

About Colorado

Colorado is currently engaged in the business of mineral exploration for the purpose of acquiring and advancing mineral properties located in British Columbia and the Yukon and is also aggressively seeking properties in Latin America. Colorado's initial focus will be to follow up exciting "Carlin" style mineralization found by previous workers on its Oro Gold Property in the Yukon as soon as conditions permit.

ON BEHALF OF THE BOARD OF DIRECTORS OF COLORADO RESOURCES LTD.

Adam Travis, President and Chief Executive Officer

NR 11-06

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding proposed exploration activities. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company's equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company's prospectus dated September 16, 2010 for a more complete discussion of such risk factors and their potential effects, a copy of which may be accessed through the Company's page on SEDAR at www.sedar.com.

Neither the 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 this release.

Contact Information

  • Colorado Resources Ltd.
    Adam Travis
    President and Chief Executive Officer
    (250) 768-1511
    (250) 768-0020 (FAX)
    or
    Colorado Resources Ltd.
    Terese Gieselman
    Chief Financial Officer and Secretary
    (250) 768-1511
    (250) 768-0020 (FAX)
    www.coloradoresources.com