Eloro Resources Ltd.
TSX VENTURE : ELO

Eloro Resources Ltd.

June 12, 2008 12:27 ET

Eloro Signs Letter of Agreement to Acquire a Strategic Hydrocarbon (Gas) Land Package in Quebec

TORONTO, ONTARIO--(Marketwire - June 12, 2008) - ELORO RESOURCES LTD. ("Eloro" or the "Company") (TSX VENTURE:ELO) is pleased to announce the signing of a Letter of Agreement (the "LOA") setting the terms for Eloro to acquire 4 oil and gas permits termed the Charlevoix Property (the "Property"), located in the Charlevoix area (NTS Map-Sheets 21M08 and 21M09) on the northern shore of the St. Lawrence River, 75 km NE of Quebec City, Quebec.

The Property encompasses an area of 53,405 hectares or 534.05 km2 along a segment of the same Paleozoic Basin that hosts the current "gas play" in the Utica Shale.

The Charlevoix area was historically explored for hydrocarbons in the late 1980's and early 1990's by the GHK Corporation ("GHK"). Based on GHK surface sampling, hydrocarbon analysis and extensive geophysical surveying, hydrocarbon seepage was identified at surface in a number of areas, in addition to occurrences of tar, anthracite and other carbon-rich compounds. More than 450 surface sites were sampled for hydrocarbons. Higher than background values in methane were also outlined in soils at 22 sites; one occurrence yielding up to 11,161 ppm or 1.12% methane. A Soil Fluorescence survey outlined the seepage of heavier hydrocarbons. Soils were also anomalous in iron, titanium, copper, manganese, vanadium, lead, barium and strontium, all known to be associated with hydrocarbons.

Mr. Thomas Larsen, Eloro's President and CEO states, "The shale gas play in Quebec is unique due to its potentially economic viability and scale. Management believes the Charlevoix Property offers excellent upside leverage for Eloro in the near term based on the significant gas play located further to the south in the Utica Shale. Eloro has now capitalized on the opportunity to acquire a major and strategic land holding in an area known to contain hydrocarbons, supported by a substantial and intact database that includes exploratory drilling. Eloro plans to rapidly evaluate the hydrocarbon potential of the Property, whether it is gas and/or oil, in light of favourable prices and the application of today's technology."

The Charlevoix Property Agreement

Eloro signed the LOA with the BRM Group (the "Vendor"), an arm's length party, enabling the Company to acquire a 100% undivided interest in the Property by executing a definitive Option Agreement on or before June 26, 2008, making cash payments totalling C$ 50,000 to the Vendor, completing C$ 500,000 in exploration expenditures over a two year period, and upon receipt of all regulatory approvals, the issuance of 1.5 million shares of Eloro to the Vendor. The Vendor would retain a 2.5% Gross Overriding Royalty, of which 1% may be purchased by Eloro for C$ 1.5 million.

Work completed in 2007 and 2008 on the Property included geological compilation, field mapping with surface sampling and a ground structural study that identified the main structural breaks covered by the Property, and an air-photo and LANDSAT satellite study to identify the main structures and alterations pertinent to the Shale Gas setting. Eloro is currently reviewing and compiling the technical information available for the Property and plans to proceed with a major geochemical survey, geological mapping and follow-up drilling in 2008.

Quebec's Shale Gas Play in the St. Lawrence River Lowlands

According to a recently released equity research group report from Fraser Mckenzie on "shale gas" in Quebec (the "Report") dated May 2, 2008, the "Utica Shale Gas Play" in the St. Lawrence River Lowlands located between Montreal and Quebec City (Quebec) is a "sleeping giant" that was recently awakened with the announcement that Forest Oil Corporation had successfully fracture-stimulated and tested two vertical wells drilled in the Utica Shale in Quebec on two of their permits. The Report stated that the Utica Shale exhibit excellent rock properties comparable to other more established "shale gas" formations, such as the Barnett Shale in Texas, which hosts up to 250 trillion cubic feet ("tcf") of recoverable reserves. The Report also indicated the economics of the Utica Shale could be more attractive than other similar "shale gas" discoveries, because of its shallower depth and close proximity to gas markets, and their "Barnett-type" rock attributes. The Utica Shale play encompasses a 1.5 million acre area in the St. Lawrence Lowlands south of the St. Lawrence River between Quebec City and Montreal. The Utica shale is estimated to contain up to 24 tcf of recoverable reserves. The Report concludes that although the Utica shale gas play is still at an early stage of establishing commerciality, preliminary indications are very encouraging.

Stock Option Grant

The Company also announces that it has granted 450,000 stock options to an employee and a consultant to acquire up to 450,000 common shares of the Company (the "Stock Options"). Each Stock Option entitles the holder thereof to acquire one (1) common share of the Corporation at an exercise price of $0.35 per common share prior to the close of business on June 12, 2013.

About Eloro Resources Ltd.

Eloro is a junior exploration company focused on discovering and developing precious and base metal quality resources in the James Bay and uranium resources in the Otish Basin districts of northern Quebec, and 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 owns 90 km2 of prospective uranium holdings in 10 properties (175 claims). The Timmins area holdings include both the prospective Hurdman Zinc-Silver Property, and the 30 km2 McArthur Lake Nickel Property.

Shareholders and stakeholders should visit the Eloro Resources IR Hub at www.agoracom.com/ir/eloro, where you can post questions and receive answers within 24 hours, or simply review questions and answers posted by other investors. If you would like to receive Eloro's news releases and the latest updates in real-time, you may download your e-mail address at elo@agoracom.com.

The information contained in this news release was prepared by Mr. Jean Lafleur, P. Geo., Eloro's Technical Advisor and Board member, and a Qualified Person under National Instrument 43-101 standards.

Any statements made in this news 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