Continental Precious Minerals Inc.

Continental Precious Minerals Inc.

September 17, 2007 12:47 ET

Continental Precious Minerals Inc.: Update on Activities in Sweden

TORONTO, ONTARIO--(Marketwire - Sept. 17, 2007) - Continental Precious Minerals Inc. (TSX:CZQ) (the "Company" or "Continental") is pleased to announce that it is starting a drilling program of approximately 1,000 metres on its MMS (or multi-metal sediment) (Narke) licences in southern Sweden.

This drilling is part of the Company's drilling program for the next twelve months, which also includes a further 15,000 metres of drilling in and around the Company's MMS Viken licence. Once a main target area is identified on the MMS Viken licence, drilling of approximately 2,000 metres on a tighter grid with some angled holes is contemplated. In addition to drilling the MMS Viken area and to the north and south of this licence, Continental is contemplating the completion of a preliminary economic study for the MMS Viken licence in early 2008. The Company has engaged engineering consultants to perform initial metallurgical and process testwork on the core samples from this area. In late August 2007, independent qualified persons updated an earlier resource estimate for the MMS Viken licence. In addition to significant amounts of vanadium, molybdenum and nickel, the August 2007 inferred resource estimate included approximately 232 million pounds of uranium (685 million tons grading 0.34 pounds per ton uranium oxide). These significant levels of uranium, vanadium and other metals point to the potential to expand the resources further in this area. To date, Continental has completed approximately 5,300 metres of drilling in and around the MMS Viken licence.

Due to the recent success in substantially increasing its inferred resource estimate, the Company has reached a stage where its strategy of pursuing opportunities that will be beneficial to the Company and its shareholders may include establishing strategic alliances with partners or the sale of an asset.

History of Alum Shale Exploitation in Southern Sweden

The Company has not conducted any previous exploration work in southern Sweden in the area of its MMS (Narke) licences. The Alum Shale Formation, which underlies part of Scandinavia (extending from Finnmark in northern Norway to Skane in southern Sweden), is referred to in several published and unpublished historical geological reports. According to one such report written on behalf of the SGU in 1985 entitled "The Scandinavian Alum Shales" by Astrid Andersson, Bertil Dahlman, David G. Gee and Sven Snall, the Alum Shale Formation was at the time of such report viewed as Sweden's most important fossil energy resource and also considered to be the largest known uranium resource in Europe.

When the kerogen content of the alum shales was identified, various attempts were made to extract and refine the hydrocarbons. Kerogen is a naturally occurring solid, insoluble organic matter that occurs in source rocks and can yield oil upon heating. Using conventional retorting methods, oil yields were significant only in Kinnekulle and Ostergotland in southern Sweden. Production at a pilot plant at Kinnekulle reached 500 tonnes of petroleum a year and later expanded during World War II, largely for military purposes. With the availability of conventional oil after the war, alum shale oil operations were terminated in 1966. During the period 1942-1966, about 50 million tonnes of shale were processed.

It was also recognized that certain facies of the Alum Shale Formation containing kolm lenses were uranium-enriched and attempts were made to mine them. In the late 1940's, the SGU, on behalf of the Swedish Oil Shale Company and, later, the Atomic Energy Company, established that some parts of Narke and Vastergotland in southern Sweden contained units at least three metres thick with more than 200 ppm uranium. Later, at Ranstad, a 3.5 metre thick unit containing 300 ppm uranium was discovered and a production facility established. A plant designed to produce 120 tonnes of uranium per year was built but, during the 1965-1969 period, it only produced at half of capacity due to depressed uranium prices.

In 1940, vanadium was recognized as a constituent of the Dictyonema facies of the alum shale in Skane and small amounts of vanadium pent oxide were produced together with potassium and ammonium sulphate.

In the 1985 SGU report referred to above, Sweden's alum shale resources were estimated at approximately 50 billion tonnes of shale containing 6 billion tonnes of kerogen, taking into account only shales containing more than 10% organic matter.

Continental has not undertaken any independent investigation of the SGU's resource estimate of alum shales referred to in this news release, nor has it independently analyzed the assay results of the previous exploration results in order to verify the resource database, and therefore the historical estimates should not be relied upon. The estimates are not current estimates made in compliance with either National Instrument 43-101 or National Instrument 51-101 and Continental is not treating these historical resource estimates as a resource or reserve within the meaning of either National Instrument 43-101 or National Instrument 51-101 as verified by a qualified person or any other expert. At best, Continental views these historical estimates as a conceptual indication of the potential size of the resource contained within the Alum Shale Formation as a whole (and not necessarily an indication of any resource underlying Continental's property interests). In essence, these estimates are only relevant to Continental's decision to proceed with exploration.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements regarding the Company's expectations as to drilling programs, a preliminary economic study, strategic alliances with partners and sale of an asset. The inferred resource estimate contained in this news release is an estimate only and is not equivalent to reserves and does not mean that the mineral resource can be economically mined. Actual developments may differ materially from those contemplated by these statements depending upon, among other things, there not being any change to Swedish mining laws, there not being an adverse decision of regulators or public or environmental opposition, the ability of find strategic partners or buyers as well as those factors discussed in the Company's disclosure documents filed on SEDAR at The forward looking statements contained in this news release represent the Company's views and expectations as of the date of this release and should not be relied upon as representing its views and expectations at any subsequent date.

Contact Information

  • Continental Precious Minerals Inc.
    Ed Godin
    (416) 805-3036