Highland Resources Inc.
TSX VENTURE : HI

Highland Resources Inc.

February 27, 2009 15:59 ET

Highland Resources Inc.: Negotiations Concluded with Canadian Prospector Inc. Over Properties in the Beardmore-Geraldton Area

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27, 2009) - Highland Resources Inc. (TSX VENTURE:HI) ("Highland" or the "Company") is pleased to announce that it has entered into a Mineral Property Purchase & Joint Venture Agreement (the "Agreement") with Canadian Prospector Inc. ("CPI") to acquire an undivided 51% interest in certain mineral exploration properties located in the Province of Ontario (the "Proposed Acquisition").

Highland is a Tier 2 Mineral Exploration Issuer trading on the TSX Venture Exchange.

Pursuant to the terms of the Agreement, the Company proposes to acquire a 51% interest in 89 mineral claims consisting of approximately 18,624 acres located in the Beardmore-Geraldton Belt of the Thunder Bay Mining District, Ontario (the "Property"). The area is known to host numerous gold deposits along with hosting numerous base metal occurrences. The claims are subject to a 3% net smelter return royalty in favour of Jamie Wheeler, the President and Chief Executive Officer of CPI.

The consideration for the Proposed Acquisition shall be (i) the payment by Highland of an aggregate $250,000, (ii) Highland incurring Expenditures in the aggregate amount of $1,000,000 on the Property within 12 months from the Approval Date, and (iii) Highland issuing 2,916,666 Shares to be held in escrow until $1,000,000 in exploration expenditures have been incurred by Highland. In the event Highland does not incur $1,000,000 of Expenditures, the Shares shall be returned to Highland for cancellation.

Summary of the Target's Significant Assets

CPI holds 100% in 89 mineral claims in the Thunder Bay Mining District. Prominent among the claims are the blocks comprising what is commonly known as the Rickaby Property.

Rickaby Property

The Rickaby property is a grassroots gold property located in Elmhirst and Rickaby Townships in Northwestern western Ontario (see attached Claim Map, also available on www.sedar.com) located in the Thunder Bay Mining District.

The property is in the Geraldton-Beardmore Gold belt which has a long history of gold exploration and development and has produced an estimated 4,373,300 ounces of gold over the years from 24 mining operations of various sizes, including production from one deposit located in part on the property.

The property hosts gold-rich quartz veins and has exploration potential for base metal massive sulphide mineralization. The gold veins on the property occur in and around a granodiorite stock and are identical to gold veins that exhibit high grades, substantial widths and considerable continuity being developed on the adjacent Hercules property by Kodiak Exploration. Low grade base metal mineralization occurs on the property as well in a stringer/replacement type sulphide occurrence. The mineralization occurs in a rhyolite volcanogenic hydrothermal system of the kind in which many massive sulphide deposits in the Canadian Shield occur. There is unevaluated potential for massive sulphides at depth in the volcanogenic hydrothermal system.

No qualified person has undertaken independent verification of the information contained in this press release. The Company has not conducted any exploration on the property to date.

J. L. LeBel, P. Eng., of Orequest Consultants Ltd., who is independent to the Company, is the Company's qualified person on the project as required under NI 43-101 and has prepared the technical information contained in this press release. He has prepared a 43-101 compliant report on the Rickaby Property, Thunder Bay Mining Division, Ontario, which will be submitted to the regulatory authorities for review and acceptance, and subsequent filing on SEDAR.

Proposed Part-and-Parcel Financing

In connection with the proposed acquisition, Highland proposes to raise the first tranche of the funds required pursuant to the Agreement, by way of a short form offering document to be prepared in accordance with Exchange Policy 4.6 with Jordan Capital Markets Inc. as the Agent for the offering, on a commercially reasonable efforts basis.

The proposed financing will be subject to regulatory approvals and will involve the issuance of up to 5,000,000 Units priced at $0.15 per Unit for gross proceeds of up to $750,000 dollars. Each Unit will consist of one common share and one-half of one transferable share purchase warrant, a whole warrant exercisable to purchase one share at a price of $0.30 for a period of 12 months from the date of Closing, or $0.40 for the period of 12 months (plus one day) to 24 months from the date of Closing. The Agent will have the option to increase the size of the Offering by up to 15% to cover over-allotments for a period of 15 days from the Closing.

The proceeds from the private placement will be used to complete the transaction with CPI, and conduct initial work on the Rickaby Property.

The Agent in this offering will be compensated as follows:

(a) a commission equivalent to 8.0% of the gross proceeds, payable in cash and/or Units or a combination of both, at the election of the Agent;

(b) Agent's warrants equal to 15% of the Units sold pursuant to the Offering, each Agent's warrant exercisable for one Unit at an exercise price of $0.15 for a period of 24 months from the date of Closing; and

(c) a corporate finance fee.

Finder's Fee

In connection with the proposed acquisition, a finder's fee will be payable in accordance with Exchange policies in connection with the introduction of Highland to CPI. This fee, payable in Highland Shares (the "Finder's Fee Shares") will result in the issuance of 393,749 Highland Shares at a deemed value of $0.15 per Highland Share and is subject to regulatory approval.

To view accompanying map, please click on the following link: http://media3.marketwire.com/docs/HImap.pdf

ON BEHALF OF THE BOARD

Robert Eadie, Chief Executive Officer and Director

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Highland Resources Inc.
    Robert Eadie
    (604) 602-4935
    (604) 602-4936 (FAX)