Eloro Resources Ltd.
TSX VENTURE : ELO

Eloro Resources Ltd.

January 30, 2008 13:30 ET

Eloro Options Otish Uranium Properties, Announces Sale of Additional Uranium Properties

TORONTO, ONTARIO--(Marketwire - Jan. 30, 2008) - ELORO RESOURCES LTD. (TSX VENTURE:ELO) ("Eloro") is pleased to announce that it has signed a Letter Agreement (the "Agreement") with Northfield Metals Inc. ("Northfield") allowing Northfield to earn a 50% interest and operatorship in Eloro's wholly-owned Otish Uranium North and South properties located in the Otish Mountains, Quebec ("Otish Uranium Properties"). Eloro is also pleased to announce the sale ("Sale"), to Northfield, of six wholly-owned uranium properties located in the James Bay District of Quebec (the "James Bay Uranium Properties").

The Otish Uranium Properties Agreement

Under the terms of the Agreement, Northfield has an option to earn a 50% interest and operatorship in the Otish Uranium Properties by incurring C$3 million on exploration related expenditures on or before January 31, 2012, as follows:

- C$300,000 on or before January 31, 2009;

- an additional C$500,000 on or before January 31, 2010;

- an additional C$1,000,000 on or before January 31, 2011; and

- an additional C$1,200,000 on or before January 31, 2012

Pursuant to the Agreement, Northfield has agreed to issue 1,000,000 common shares of Northfield (the "Shares") to Eloro as follows: i) 100,000 Shares after receipt of all necessary regulatory approvals, ii) 166,667 Shares on or before January 31, 2009, iii) 333,333 Shares on or before January 31, 2010, and iv) 400,000 Shares on or before January 31, 2011. The Otish Uranium Properties are currently encumbered with a 2% net smelter return royalty, of which, 1% may by purchased from the royalty holder for C$ 1 million.

The Otish Basin Uranium Mineralization

The Otish Uranium Properties, comprising 158 claims totaling 82.1 km2, straddle the unconformity contact with the underlying granites and offer potential for classic unconformity-type uranium mineralization both below and above the unconformity surface. Eloro's Otish Uranium Properties are in a similar regional geological context as Strateco Resources Inc.'s high-grade uranium intersection, and the high grade uranium mines in the Athabasca Basin in Saskatchewan, the world's largest producing uranium camp.

The Otish Uranium Properties are located approximately 20 km NE of Strateco Resources Inc.'s Matoush Uranium Discovery, where they have intersected significant uranium mineralization in drillhole MT-06-35 2.13% U3O8 over 15.2 m (refer to the Strateco Resources Inc.'s press release dated February 20, 2007). The Otish Basin is also being actively explored by Cameco and Areva, the world's largest uranium producers.

The Matoush Uranium Discovery is closely linked to a regional fault which appears to have acted as a conduit for uranium-bearing fluids. The uranium mineralization found at Matoush lies well above the basin rim and resembles perched bodies found above the McArthur River and Cigar Lake uranium deposits in the Athabasca basin.

James Bay Uranium Properties Sale

Under the terms of the Sale, Northfield has agreed to purchase Eloro's James Bay Uranium Properties in exchange for 500,000 common shares of Northfield. The James Bay Uranium Properties are currently encumbered with a 1% net smelter return royalty.

Eloro's James Bay Uranium Properties are comprised of six properties (Gaval, Maguy, Meech, and Rupert North, Zone 90, and Zone 99) that total 122 claims and cover an area of 6,274 hectares. The Gaval property contains anomalous uranium mineralization in an unconformity type geological model; Maguy and Meech contain anomalous uranium mineralization within a geological pegmatitic model. The highlight showings on each property are as follows: Gaval 435ppm uranium ("U"), over 1.5m in drillhole G-77-8 (Source: MRN assessment file GM 37020); Maguy: 0.44% U3O8 (grab sample) in migmatitic and pegmatitic rocks; Meech: 467 ppm U (grab sample) in pegmatites; Zone 90: 0.092% U located in a fracture within a granodiorite; Zone 99: 0.011% U3O8, hosted in fractures and shear zones associated to a regional structure. Located south of the Eastmain greenstone belt is the Rupert North property that hosts a showing that contains 515ppm U hosted in a granitic pegmatite.

The James Bay Uranium Properties were acquired by Eloro based on historical values and have not benefited from any significant exploration for uranium since the 1970's.

Since there are common directors to both companies, the Board of Directors of each of Eloro and Northfield struck an independent committee to review and assess the Agreement and Sale. In each case, the independent committee was composed of one independent director. Each independent committee reviewed each proposed transaction and its underlying property and concluded that both the Agreement and Sale transactions were comparable to transactions between other mineral exploration companies relating to comparable properties. Each independent committee recommended to its respective Board of Directors that the Agreement and Sale transactions be approved. The Agreement and Sale transactions are subject to approval of the Boards of Directors and any necessary regulatory approvals.

About Eloro Resources Ltd.

Eloro is a junior exploration company focused on discovering and developing precious and base metal quality resources in James Bay and uranium resources in the Otish Basin districts of northern Quebec, as well as base and precious metals in the Timmins Camp of northern Ontario. Eloro currently has eleven gold-copper-silver properties (1,062 claims) covering 548 km2 in the La Grande and Eastmain Greenstone Belts, proximal to Goldcorp's Eleonore Gold Prospect. Eloro also has an option to earn a 50% interest in 31 claims held by Virginia Mines Inc. Additionally, Eloro's Otish Mountain District uranium holdings consist of its wholly-owned Lac Mills property, the Otish Uranium Properties currently optioned to Northfield Metals Inc., and the Lac Henry property currently optioned to Icon Industries Limited. The Timmins area holdings now include the prospective Silver-Zinc-Gold Hurdman Property, the 30 km2 McArthur Lake Nickel Property and the Douglas Property.

The technical content of this press release has been reviewed by Martin Bourgoin, P. Geo., Executive Vice-President, of Eloro, and the company's Qualified Person under the guidelines of National Instrument 43-101.

For all Eloro investor relations needs, investors are asked to visit the Eloro Resources IR Hub at http://www.agoracom.com/ir/eloro where they can post questions and receive answers within the same day, or simply review questions and answers posted by other investors. Alternatively, investors are able to e-mail all questions and correspondence to elo@agoracom.com where they can also request addition to the investor e-mail list to receive all future press releases and updates in real time.

Statements in this release that are not historical facts are "forward-looking statements" and readers are cautioned that any such statements are not guarantees of future performance, and that actual developments or results, may vary materially from those in these "forward-looking statements".

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

Contact Information

  • Eloro Resources Ltd.
    Thomas G. Larsen
    President and CEO
    (416) 868-9168
    (416) 361-1333 (FAX)
    or
    Eloro Resources Ltd.
    Jorge Estepa
    Vice-President
    (416) 868-9168
    (416) 361-1333 (FAX)
    Website: www.elororesources.com