Southwestern Resources Corp.
TSX : SWG

Southwestern Resources Corp.

October 19, 2005 17:26 ET

Newmont to Acquire 400,000 Southwestern Shares at CDN$13 per Share; Liam Core Area and Regional Area Combined into Single Venture

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 19, 2005) -

THIS NEWS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Southwestern Resources Corp. (TSX:SWG) is pleased to announce that Newmont Mining Corporation of Canada Limited ("Newmont") has agreed to purchase Cdn$5.2 million of Southwestern common shares and, in a separate transaction, the Liam gold-silver project will be combined under the Liam Regional Venture with Newmont Peru Limited.

As a result of the continuing success of the regional exploration program at Liam, as described in previous press releases, the Liam Core Area Option Agreement will be terminated, and the area that was covered by that agreement will be included within an amended Liam Regional Venture Agreement. The purpose of this rationalization is to allow more effective exploration of this emerging epithermal gold-silver district. Southwestern remains manager under the Regional Venture Agreement, however the technical committee may appoint Newmont as manager on designated portions of the project.

Southwestern has signed separate agreements with Newmont under which:

- Newmont has agreed to purchase 400,000 Southwestern common shares at Cdn$13.00 per share for gross proceeds of Cdn$5.2 million. For a period of twelve months, Newmont has agreed not to sell the shares and to exercise its voting rights as directed by Southwestern or abstaining from voting. This non-brokered private placement is subject to approval of the Toronto Stock Exchange.

- The Option Agreement covering the Liam Core Area will be terminated, and the 3,500 hectare area covered by that agreement will be amalgamated into an amended Liam Regional Venture Agreement.

With the addition of the Liam Core Area and a further 2,800 hectares of concessions recently acquired, the Liam Regional Venture now comprises approximately 196,000 hectares of exploration concessions. Under the terms of the Liam Regional Venture, Newmont and Southwestern each have a 50% working interest and will each contribute 50% of the exploration funding. Newmont can earn a 70% interest in those portions of the Liam Regional Venture that it advances to a bankable feasibility study by funding 100% of the costs to put a deposit into commercial production.

John Paterson, President and CEO of Southwestern, said, "We're excited with the positive results of the ongoing regional exploration program. The rationalization of the Liam agreements will allow exploration within the broader area to be more effectively prioritized. We also welcome Newmont's increased shareholding in Southwestern."

Forward Looking Statement

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

Contact Information

  • Southwestern Resources Corp.
    Timo Jauristo
    VP, Corporate Development
    (604) 669-2525
    (604) 688-5175 (FAX)
    or
    Southwestern Resources Corp.
    John G. Paterson
    President & CEO
    (604) 669-2525
    (604) 688-5175 (FAX)
    or
    Southwestern Resources Corp.
    Daniel G. Innes
    VP, Exploration
    (604) 669-2525
    (604) 688-5175 (FAX)
    info@swgold.com
    www.swgold.com