Crescent Resources Corp.

Crescent Resources Corp.

November 03, 2006 08:00 ET

Crescent Resources Corp.: Letter Agreement Signed to Acquire 70% of the Oviedo Uranium Property, Paraguay

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 3, 2006) - Crescent Resources Corp. (TSX VENTURE:CRC) is pleased to announce that it has signed a Letter Agreement that sets out the essential terms between Crescent Resources Corp. ("Crescent") and Coronel Oviedo Mining Company SA ("Coronel"), a Paraguay corporation, whereby Crescent can earn up to a 70% interest in the Oviedo uranium property located in Paraguay.

The Oviedo property is a large property covering over 500,000 hectares in central Paraguay that was subject to extensive uranium exploration between 1976 and 1983. This activity was centered on a large belt of Permo-Carboniferous age continental sandstones that represent the western flank of the Parana Basin. In neighboring Brazil these same sandstones contain numerous uranium occurrences including the Figueira Mine that reportedly hosted approximately 19 million pounds of U3O8. Most of the uranium occurrences in this environment are "roll-front" type deposits similar to those being currently exploited by low-cost in-situ leach methods in the western United States. Exploration activity on the Oviedo property ceased in 1983 due to low uranium prices. Coronel have accumulated a large database on the project including the results of approximately 65 widely spaced reconnaissance drill holes of which several showed significant uranium grades.

Between 1976 and 1983 the Anschutz Corp. (a private Denver-based US oil company) with joint-venture partners Korea Electric Power and Taiwan Power Company spent approximately US$30 million evaluating an area covering over 2.5 million hectares of prospective ground in which the Permo-Carboniferous age continental sandstones outcrops in central Paraguay. This work consisted of airborne radiometric and magnetic surveys, detailed geological mapping, ground geophysical and geochemical surveys which narrowed down the areas of interest. This was followed with regional scale diamond drilling with initial drilling at 15 kilometre spacings drilled across inferred host trends. Towards the end of the program some closer spaced holes were drilled over two areas where significant uranium mineralization was found. In total only approximately 65 widely spaced drill holes were drilled on the Oviedo property and of these 21 drill holes showed significant uranium values.

The depth of the known roll-front type uranium mineralization on the Oviedo property intersected by the past drilling is at depths between 150 to 250 metres and the characteristics of the host formations suggest that low cost in-situ leaching recovery could work well in this environment.

Under the terms of the Letter Agreement, Crescent can acquire an initial 50% joint-venture interest in the Property by funding US$5,000,000 of expenditures on the Property within a period of three years from closing and by making an aggregate of US$750,000 in cash payments and issuing an aggregate of 3,500,000 common shares of Crescent to Coronel. Crescent has agreed to fund US$2,000,000 of exploration within the first year, US$2,500,000 in the second year and US$500,000 in the third year of the agreement. In order to maintain its 50% interest Crescent is required to fund an additional US$2,500,000 of expenditures in the third year. The period to complete this funding can be extended from three years to four years by paying US$500,000 to Coronel.

Crescent will then have a further option to acquire a 70% joint-venture interest in the property by completing a prefeasibility study within a four-year period from closing. The period to complete this study can be extended to five years by paying US$500,000 to Coronel.

On the signing of the Letter Agreement Crescent will pay Coronel US$25,000 and an additional US$175,000 will be paid and 800,000 shares issued on completion of all legal and technical due diligence, the execution of the definitive legal agreement and obtaining all regulatory approvals for closing. On or before the first anniversary of the closing Crescent will pay Coronel $250,000 and issue 1,200,000 shares, and the final payments of US$300,000 and 1,500,000 shares are to be paid on or before the second anniversary.

Coronel will be the operator of the joint-venture programs until US$5,000,000 has been spent at which point Crescent has the right to become the operator.
This agreement between Crescent and Coronel remains subject to regulatory approval, due diligence and definitive documentation. There will be a finder's fee payable to an arms-length person on completion of this transaction subject to regulatory approval.


Crescent's initial goals will be to compile all previous data with a view to locating old drill holes on the ground and then commencing a drilling program as soon as possible in close proximity to the areas where anomalous or significant grade uranium mineralization occurred in previous drilling. As exploration for this type of uranium occurrence requires a great deal of drilling it is anticipated that over 20,000 metres of drilling will be completed within the first year subject to financing.

Crescent is a mineral exploration and development company with a defined growth strategy of adding value through discovery and rapid project advancement through exploration. Crescent is currently focused on the exploration of the Matupa Gold Project in Mato Grosso State, Brazil and the Boulder Lake Uranium Project in northern Manitoba. These projects were acquired based on management's belief that they have the potential for further discovery and growth. The Company has 17,804,679 shares common shares outstanding.

Michael J. Hopley, President and CEO of Crescent, is the Qualified Person, as defined in NI 43-101, and is responsible for the preparation of the technical information contained in this news release.


As part of this transaction, Crescent announces a non-brokered private placement of up to 6,000,000 units at a price of $0.50 per unit for gross proceeds of up to $3,000,000. Each unit will consist of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the subscriber to purchase one additional common share in the capital of the Company at a price of $0.75 for a period of one year from closing of the private placement. The private placement is subject to compliance with applicable securities laws and to receipt of regulatory approval.

Proceeds of this private placement will be primarily used for property costs and commencement of exploration and drilling on the Oviedo Property as well as general corporate purposes and the evaluation of other properties for possible acquisition.


Michael Hopley, President and Chief Executive Officer

WARNING: The Company relies on litigation protection for "forward looking" statements. Actual results could differ materially from those described in the news release as a result of numerous factors, some of which are outside the control of the Company.

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

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