Newstrike Resources Ltd.

Newstrike Resources Ltd.

April 23, 2007 12:37 ET

Newstrike Resources Ltd. Options New Mineral Prospect

TORONTO, ONTARIO--(CCNMatthews - April 23, 2007) - Newstrike Resources Ltd. (TSX VENTURE:NR) ("Newstrike") is pleased to announce that it has entered into a letter of intent with Ragnar U. Bruaset & Associate Ltd. and D.L. Cooke & Associates Ltd. (together, the Optionors") pursuant to which Newstrike has been granted the option to acquire a 100% legal and beneficial interest in the property known as the Jean property, comprised of 31 mineral claims located in the Omineca Mining Division, British Columbia.

In order to acquire its interest in the property, Newstrike is required to make cash payments totaling $340,000 over a four year period (of which $10,000 has been paid, and a further $30,000 is payable upon execution of a definitive option agreement), issue an aggregate of 500,000 common shares over a three year period (of which 150,000 common shares must be issued upon the execution of a definitive option agreement), and incur aggregate exploration expenditures on the property of $1,500,000 over a four year period (of which $300,000 must be expended in the first year). The transaction remains subject to the execution of a definitive option agreement and the approval of the TSX Venture Exchange.

The Optionors will retain a 3% net smelter return ("NSR") interest from any production on the property following the exercise by Newstrike of its option, in connection with which Newstrike will pay to the Optionors an aggregate advance royalty of $50,000 per year commencing on the fifth anniversary of the date of the definitive option agreement. Newstrike may purchase 1/3 of the NSR at any time upon payment of $2,000,000, and may purchase 1/2 of the remaining NSR at any time thereafter upon payment of $1,500,000.

A finder's fee consisting of 15,000 common shares of Newstrike and $4,000 cash is payable to Mr. Barrie Hancock in connection with this transaction, which common shares and cash payment shall be deducted from the amounts otherwise payable by Newstrike to the Optionors pursuant to the terms of the agreement.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Newstrike Resources Ltd.
    Donald Rankin
    (416) 628-6556