San Anton Resource Corporation

San Anton Resource Corporation

December 08, 2006 07:00 ET

Kings Minerals and Andaurex Close Financing and Business Combination

San Anton Receives Conditional Approval for TSX Listing

OTTAWA, ONTARIO--(CCNMatthews - Dec. 8, 2006) - San Anton Resource Corporation (TSX:SNN) is pleased to report the closing of the previously announced amalgamation of Andaurex Industries Inc. with Kings Minerals Canada Inc. to form San Anton, as well as the closing of the related private placement financing. Conditional approval for the listing of the shares of San Anton has been received from the TSX and the shares are expected to commence trading in the week of December 11, 2006 under the symbol SNN.

Under the financing, which was over subscribed, the agents exercised a $2.25 million over-allotment option resulting in gross proceeds of $17.25 million. The financing was led by Haywood Securities and included Canaccord Capital and Sprott Securities. The proceeds of the financing, net of agents' fees and expenses, are expected to be approximately $16.4 million. Under the financing and subsequent amalgamation, San Anton has issued 21,437,500 shares and 10,718,750 warrants of San Anton to the private placement investors, with each warrant exercisable to acquire one common share of San Anton at an exercise price of $C1.20 for a period of 24 months. The agents were also granted compensation options to purchase 871,875 units of San Anton at a price of $0.80 per unit for a period of two years, with each unit consisting of one common share and one half of a share purchase warrant with each whole warrant having terms identical to those of the financing.

As a result of the amalgamation, San Anton has acquired a 51% interest in the San Anton property in central Mexico, where small scale mining of high grade gold-silver veins has occurred for centuries. The property has only been subjected to modern exploration techniques since mid 2004 when fragmented ownership was consolidated into one cohesive land package. Since then, more than twenty high grade epithermal vein-breccias, intrusion-related gold, and gold skarn exploration targets have been identified.

The first and only target which has received extensive work to date is Cerro del Gallo where a substantial near-surface gold/silver (+copper) resource has been drilled off in less than two years. The Cerro del Gallo deposit hosts NI 43-101 measured and indicated resources of 225 million tonnes grading 0.81g/t AuEq(i) (5.9Mozs AuEq(i)) and inferred resources of 229 million tonnes grading 0.71g/t AuEq(i) (5.2Mozs AuEq(i)), both based on a 0.30g/t AuEq(i) cut-off grade. Graeme Rabone, an independent consultant, who is a Qualified Person under National Instrument 43-101, has reviewed and approved the technical information in this release.

(i) Au equivalent has been calculated as Au + (Ag/60) + (Cu X 2.3). Metallurgical recoveries and smelter returns have been assumed at 100%.

The resource estimate is based on approximately 24,635 meters of drilling in 110 holes to December, 2005. Drilling has been almost continuous since then with over 60,000m of infill and expansion drilling in 244 drill holes now completed. Much of this is drilling has been designed to upgrade inferred resources to the measured and indicated category, and to expand and better define the gold rich zone by drilling it on 50 meter, and in some cases 25 meter centers. Drilling has continued with two rigs seven days a week and the exploration budget for the next 12 months exceeds $US10million. San Anton intends to prepare a new resource estimate in the first
quarter of 2007 and a PFS is expected later in the year.

Gregory Bowes, President and CEO of San Anton commented that "While a multi million ounce resource has been outlined at Cerro Gallo in less than two years, it is a relatively new discovery that is still open laterally and at depth. Significant opportunities also exist to enhance the economics of potential development scenarios by expanding both the gold rich and gold skarn zones, drilling other nearby zones of higher grade silver, copper and molybdenum mineralization, and exploring over 10km of related epithermal vein-breccia systems."

Following completion of the amalgamation and related transactions, including the financing, San Anton now has 103,773,309 common shares outstanding. In addition, San Anton has outstanding securities convertible into a maximum of 26,964,062 additional common shares consisting of the following: (i) 10,000,000 warrants issued to Kings Minerals Mexico Pty. Ltd. , with each warrant exercisable to acquire one common share of San Anton at an exercise price of $C1.20 for a period of 5 years; (ii) the 10,718,750 warrants issued to the private placement investors, as well as an additional 62,500 warrants having the same terms; (iii) the 871,875 compensation options issued to the agents under the financing, which, including the exercise of the warrants issuable thereunder, may be exercised for a maximum of 1,307,812 common shares; and (iv) 4,875,000 stock options which have been granted to various holders in connection with the completion of the amalgamation, entitling holders to purchase up to 4,875,000 common shares at an exercise price of $0.80 with exercise terms ranging from two to five years.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of San Anton are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from expectations are detailed from time to time in the filings made by Andaurex and San Anton with securities regulators.

Contact Information

  • San Anton Resource Corporation
    Gregory Bowes