Farallon Resources Ltd.
OTC Bulletin Board : FRLLF

Farallon Resources Ltd.

May 13, 2008 09:11 ET

Farallon Announces $80 Million Silver Sale Agreement With Silver Wheaton

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 13, 2008) - Dick Whittington, President and CEO of Farallon Resources Ltd. (TSX:FAN)(OTCBB:FRLLF) ("Farallon" or the "Company"), is pleased to announce that the Company and its wholly owned subsidiaries have entered into an arrangement with a subsidiary company of Silver Wheaton Corp. ("Silver Wheaton") to sell up to 75% of the silver produced from the Campo Morado polymetallic (zinc, gold, silver, copper, lead) project in Guerrero State, Mexico.

Under the agreement, Silver Wheaton will pay $80 million in cash to Farallon in the following stages: a $15 million payment upon signing, a $15 million payment upon the completion of certain formalities in Mexico (expected to take one week) and a $50 million payment in a series of pre-arranged installments over the next few months. Upon delivery of the silver, Silver Wheaton will also pay Farallon a fixed price payment per ounce of silver produced equal to the lesser of $3.90 and the spot price at the time of sale (subject to a 1% annual adjustment starting in the third year of silver production).

A portion of the funds from Silver Wheaton will be used to retire the Company's Bridge Facility, with the balance used for the completion of construction and startup working capital for the Company's G-9 Project.

The Company's financing plan, as outlined in Farallon's March 21, 2007 news release, which mandated NM Rothschild and Sons Limited to arrange a US$70 million facility, is unchanged.

Dick Whittington said: "We are very pleased to have completed this transaction with Silver Wheaton, which will greatly assist us in our plans to complete the G-9 Project. Silver Wheaton is the largest public mining company with a 100% of its operating revenue from silver production and we are extremely pleased with the establishment of this new relationship.

This is an exciting time for the Company and its shareholders. We are now fully funded to production at G-9, which coupled with recent exploration successes, positions the Company to deliver on both of its corporate objectives: to advance G-9 to production and to find another G-9."

Farallon is advancing the G-9 Project through a parallel track program. Exploration drilling is expected to further confirm the high-grade mineralization within the G-9 deposit, and mine planning and design, equipment acquisition and site preparation activities are all taking place concurrently, with the goal of beginning production in July 2008.

For further details on Farallon Resources Ltd. and its Campo Morado property, please visit the Company's website at www.farallonresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.


J.R.H. (Dick) Whittington, President and CEO

Forward Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, continuity of mineralization, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes that the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. The likelihood of future mining at Campo Morado is subject to a large number of risks and may require achievement of a number of technical, economic and legal objectives, including obtaining lower than expected grades and quantities of mineralization and resources, recovery rates and mining rates, changes in and the effect of government policies with respect to mineral exploration and exploitation, the possibility of adverse developments in the financial markets generally, delays in exploration, development and construction projects, fluctuations in the prices of zinc, gold, silver, copper, lead and other commodities, obtaining additional mining and construction permits, completion of pre-feasibility and final feasibility studies, preparation of all necessary engineering for underground and processing facilities as well as receipt of additional financing to fund mine construction. Such funding may not be available to the Company on acceptable terms or on any terms at all. There is no known ore at Campo Morado and there is no assurance that the mineralization at Campo Morado will ever be classified as ore. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at www.sedar.com and the Company's annual report on Form 20-F at www.sec.gov.

No regulatory authority has approved or disapproved the information contained in this news release.

Contact Information

  • Farallon Resources Ltd.
    Michael Curlook
    Investor Services
    (604) 684-6365 or Toll Free: 1-800-667-2114
    (604) 684-8092 (FAX)
    Website: www.farallonresources.com