Eloro Resources Ltd.
NEX BOARD : ELO.H

Eloro Resources Ltd.

June 28, 2005 13:21 ET

Eloro Acquires new Gold Copper and Uranium Properties in Virginia Gold Camp; Eloro Announces $750,000 Private Placement Financing

TORONTO, ONTARIO--(CCNMatthews - June 28, 2005) -

Not for dissemination in the United States of America

Eloro Resources Ltd. (NEX:ELO.H) (the "Company" or "Eloro") is pleased to announce that it has entered into a letter agreement (the "Letter Agreement") with an arm's length party, Mr. J.S. Lavallee (the "Vendor"), pursuant to which Eloro has agreed to acquire (the "Acquisition") gold copper properties (the "Taiga and Summit-Gabbre Properties") and several uranium properties (the "James Bay Uranium Properties")(collectively, the "Properties"), all located in northern Quebec.

Pursuant to the Letter Agreement, Eloro has agreed to acquire a 100% interest in the Properties by the issuance of 600,000 common shares of Eloro and the payment of $30,000 to the Vendor. The Vendor will retain a 1% Net Smelter Return royalty on the Properties, of which Eloro will have the option to purchase 0.5% for $500,000.

The Taiga Property is located within the La Grande Archean Volcano Sedimentary belt, which represents a favorable geological environment for gold and base metal mineralization. The Taiga Property consists of 24 cells (72 claim blocks) totaling 1225 hectares, located in SNRC's 33G09 and 33G10, which is immediately west and adjacent to Virginia Gold Mines Inc.'s Lac Corvet/Island Lake gold property, located on the same La Grande Archean Volcano Sedimentary belt. Virginia Gold Mines Inc.'s Poste Lemoyne project is located 50 kilometers to the west of the Taiga Gold Copper Property. Historical sampling results obtained from the Taiga Property include:

Historical sampling results obtained from Taiga Property

(Source: MNRQ Government files, GM 56146, Exploration Boreal, 1999)



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Sample type Results
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Rock sample 2.33 g/t Au
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Rock sample 6.70 g/t Au
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Rock sample 2.88 g/t Au
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Rock sample 5.62 g/t Au
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Rock sample 2.47 g/t Au
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Rock sample 2.74 g/t Au
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Rock sample 2.61 g/t Au
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Rock sample 3.70 g/t Au
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Rock sample 2.22 g/t Au
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Trench sample 19.34 g/t Au
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Trench sample 2.73% Zn, 2.13% Cu
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Trench sample 1.26 g/t Au/5m
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Trench sample 4.48 g/t Au
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Rock sample 3.35 g/t Au, 0.72% Pb
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Rock sample 4.41 g/t Au
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Rock sample 1.29 g/t Au
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Rock sample 7.30 g/t Au
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Diamond drill core 3.03 g/t Au/1.3m
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Eloro's management is encouraged by the potential of the Taiga Property and has accordingly added an additional 62 cells (186 claim blocks) through map staking for a total land package consisting of 86 cells (258 claim blocks), representing 4,386 hectares. The Summit-Gabbre Property consists of 3 cells (9 claim blocks, 153 hectares) and is located adjacent to Virginia's Summit Property along the La Grande Archean Volcano Sedimentary belt. Eloro has since staked 18 additional cells (54 claim blocks, 918 hectares) through map staking. Compilation work is currently ongoing on the Summit-Gabbre Property.

The Acquisition also includes the James Bay Uranium Properties which are comprised of 7 non-contiguous properties totaling 29 cells (87 claim blocks, 1,479 hectares) located in SNRC's 33A01, 33C14, 33F13, 33F08, 33F13, 33F10. All 7 properties contain uranium showings, and the highest value of 1.31% U308 occurs as disseminations within pegmatite sills. Eloro has enhanced these uranium properties by adding 37 cells (111 claim blocks) to the original 29 cell land package in the Acquisition, increasing the total to 66 cells (198 claim blocks) representing 3,366 hectares.

The completion of the Acquisition of the Properties is subject to certain conditions precedent, including the entering of a formal agreement, the board of directors' approval of Eloro, and the receipt of all necessary regulatory and exchange approval, including that of the NEX and TSX Venture Exchange Inc.

In addition, the Company wishes to announce that it has engaged Northern Securities Inc. ("Northern"), to complete a brokered private placement (the "Private Placement") of up to 1,666,667 Flow Through Units of Eloro at a price of $0.15 per unit to be issued on a "flow through" basis under the Income Tax Act (Canada), as well as up to 4,166,667 Units of the Company issued on a non "flow through" basis, priced at $0.12 per unit for total proceeds of up to $750,000. Each Flow Through Unit will consist of one common share (the "Common Shares") to be issued on a "flow through" basis under the Income Tax Act (Canada) and one-half of one non-transferable share purchase warrant of the Company (the "Flow Through Unit Warrants"). Each whole Flow Through Unit Warrant will entitle the holder to purchase one Common Share at a price of $0.18 per share for a period of two years. Each Unit will consist of one Common Share and one-half of one non-transferable share purchase warrant of the Company (the "Unit Warrants"). Each whole Unit Warrant will entitle the holder to purchase one Common Share at a price of $0.18 per share for a period of two years. All securities issued pursuant to the Private Placement will be subject to the applicable statutory exchange and regulatory hold period.

The Company has agreed to pay to Northern, as a commission, 10% of the aggregate gross proceeds of the Private Placement, in addition to broker warrants (the "Broker Warrants") equal to 10% of the number of Unit and Flow Through Units sold pursuant to the Private Placement. Each Broker Warrant will be exercisable into one Unit.

The net proceeds of the Private Placement will be used to commence exploration programs at Eloro's recently acquired exploration projects located in Quebec, and to finance continued exploration at the Hurdman Zinc Silver Property, located in northeastern Ontario, and for working capital.

The Private Placement and related commissions payable to Northern are subject to regulatory approval and Eloro is required to file a formal application with the TSX Venture Exchange Inc. (the "Exchange") to maintain this price reservation. Further, the Private Placement is subject to Eloro obtaining reactivation (the "Reactivation") as a Tier 2 mining issuer on the Exchange. The Company has filed an application and documentation with the Exchange in order to obtain reactivation as a Tier 2 mining issuer on the Exchange. The Reactivation and the completion of the Private Placement will be subject to the approval of the Exchange.

The contents of this press release have been reviewed by Martin Bourgoin, B.Sc., P.Geo, a qualified person under the guidelines of National Instrument 43-101.

The NEX and TSX Venture Exchange Inc. have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Eloro Resources Ltd.
    Thomas G. Larsen
    President
    (416) 868-9168
    or
    Eloro Resources Ltd.
    Jorge Estepa
    Vice President
    (416) 868-9168