Pacific Wildcat Resources Corp.
TSX VENTURE : PAW

Pacific Wildcat Resources Corp.

February 28, 2011 09:15 ET

Pacific Wildcat Completes Mrima Hill Acquisition and Final Tranche of Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 28, 2011) -

"NOT FOR DISTRIBUTION TO U.S NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES"

Pacific Wildcat Resources Corp. (TSX VENTURE:PAW) ("PAW" or the "Company") President & CEO, Darren Townsend announced today the successful completion of the Initial Closing of an acquisition that gives PAW the rights, subject to the completion of certain conditions, to acquire a 70% interest in Cortec Mining Kenya ("CMK"), a private company that owns 100% of the Mrima Hill Rare Earth and Niobium project (the "Project") in Kenya. In addition the Company has also closed the balance of its previously announced brokered private placement (the "Financing") which included the issuance of 15,464,872 units (each a "Unit") at a purchase price of $0.22 per unit for gross proceeds of $3,402,271 (see below for details).

Mr. Townsend commented this morning, "The conditional clauses for the Initial Closing in the Acquisition Agreement have now been satisfied and the applicable initial cash and share payments have been made to the Vendors thus completing the Initial Closing. I would like to thank the Company's shareholders and financial advisors for their patience during the period of time required to complete the due diligence process. Your Pacific Wildcat management team feels that Mrima Hill has the potential to be a significant Rare Earth Oxide ("REO") and Niobium deposit that will enable the Company to move forward with resource definition and, subject to applicable regulatory approvals and positive feasibility studies, the subsequent development of Mrima Hill."

The Company will now submit the samples from the 974 metre RC drilling program that was completed in October 2010 for assaying. Upon receipt of these drill results, which are expected prior to the end of April 2011, the Company will move towards completing an initial 43-101 Niobium resource estimate for the property as well as reporting on the Rare Earth Oxide grades from this drilling program.

The Managing Director of CMK, Mr. David Anderson, has entered into an ongoing consulting agreement with PAW and will remain a key component of its management team going forward. It is the intention of PAW and Cortec UK to apply for a mining license for the Mrima Hill Project as soon as possible. 

In addition, the Company will be required to apply for additional permits that are required in order to conduct mining operations on the property, including a permit from the Board of the Kenyan Forest Service, and will be required to conduct environmental impact assessment studies as are customary for mining projects. There can be no assurance that the Company will be able to obtain a mining licence or any of the permits that are required in order to commence mining operations on the Project. PAW's management team under the guidance of its President and CEO, Mr. Darren Townsend will provide the technical expertise to the ongoing work programs. A further drilling program of approximately 1,500 metres of diamond drilling is scheduled to commence, subject to drill rig availability, in early April.

The Agreement

In a news release dated July 23, 2010 Pacific Wildcat announced that it had entered into a Conditional Purchase Agreement (the "Agreement") with Finebrook Investments Pty Ltd, as trustee for the O'Sullivan Superannuation Fund ("O'Sullivan Fund"), Stirling Capital Limited ("Stirling"), Dunross Capital Ltd ("Dunross") and Cortec (Pty) Ltd. ("Cortec UK") to acquire (the "Acquisition") a 70% interest in CMK, a private Kenyan company that holds three prospecting licences in Kenya, subject to certain conditions precedent (please refer to that news release on the Company's website at www.pacificwildcat.com for complete details of the Agreement). The Acquisition will be completed in two tranches.

The Company has today closed the initial tranche of the Acquisition and acquired 7% of the issued share capital of each of Stirling and Cortec UK (the "Initial Closing"), to be held in escrow pending completion of the final tranche of the Acquisition, with the balance of 93% of the issued share capital of Stirling and Cortec UK to be acquired upon the satisfaction of certain condition precedents (the "Final Closing"). In consideration for the acquisition of the 7% interest in Stirling and Cortec UK, the Company paid to the O'Sullivan Fund and Dunross (the "Vendors") a total of Aus$1,128,000 to be expended by the Vendors by June 30, 2011, or such later date as may be agreed upon by the parties, on a work program on the Project; and issued to the Vendors an aggregate of 5,000,000 common shares in the capital of the Company, of which 2,000,000 shares will be held in escrow pending completion of the Acquisition. 

Upon the Final Closing, in consideration for acquiring the balance of a 93% interest in each of Stirling and Cortec UK, the Company will pay to the Vendors approximately Aus$15,161,528 in cash, which amount is subject to adjustment in accordance with the terms of the Acquisition Agreement and receipt of the acceptance of the Exchange, and will issue to the Vendors up to 28,702,353 common shares of the Company.

The Financing

The Company also wishes to announce that it has also closed the balance of its previously announced brokered private placement. The final tranche of the Financing included the issuance of 15,464,872 Units at a purchase price of $0.22 per Unit for gross proceeds of $3,402,271. Each Unit comprises of one (1) common share and one half (1/2) of a non-transferable common share purchase warrant. Each full warrant (a "Warrant") entitles the purchaser to purchase one Common Share at a purchase price of $0.30 per share, at any time until August 25, 2012, subject to an accelerated expiry date in certain circumstances.

Macquarie Private Wealth Inc. ("Macquarie") was engaged by the Company as the agent in connection with the Financing. In consideration for the services provided by Macquarie to the Company, the Company paid to Macquarie a cash commission of $272,182 as well as an aggregate of 1,237,189 broker units (each a "Broker Unit"). Each Broker Unit entitles Macquarie to purchase, at any time within eighteen months from the Closing Date of the Offering, one Unit at a purchase price of $0.22 per Unit.

In accordance with Canadian securities legislation currently in effect, the securities issued pursuant to the Financing will have a restricted "hold" period in Canada expiring on June 26, 2011.

The Mrima Hill Project

The Mrima Hill Project is located in the southeast of Kenya and is 70 kilometres south of Mombasa, the largest port in East Africa. The ground area covered by the Mrima Hill licences is 1,180 sq. km. Mrima Hill has a target niobium mineralisation based on historic data consisting of 40 to 50M tonnes grading 0.7% - 0.8% Nb2O5 (based on a cut-off grade of 0.2% Nb2O5) with a high grade component of 10 to 15M tonnes at a grade of 1.2% - 1.45% Nb2O5. (Based on a cut-off grade of 1.0% Nb2O5). In addition a large Rare Earth Oxide mineral deposit is located coincidently and in close proximity to the Niobium deposit at Mrima Hill. Binge FW (1955) reports a total of 32 million tonnes of mineralisation at 3.1% REO in the surface weathered profile down to approximately 8m depth (see Company News Release– dated 23rd July 2010).

Note that the potential quantities and grades of the above estimates are conceptual in nature, and there is insufficient exploration to date to define a mineral resource and therefore it is uncertain if further exploration will result in the target being delineated as a mineral resource. A "qualified person" as defined under National Instrument 43-101 has not completed sufficient work to classify the above mentioned historical estimate as a current mineral resource. The Company is not treating the historical estimate as a current mineral resource. The historical estimate is not compliant with NI 43-101 and should not be relied upon.

The rare earth and niobium mineralized zones partially overlap and most of the historic work has focused to depths of less than 10 m from surface. A NI 43-101 compliant Niobium resource estimate is scheduled to be completed in Q2, 2011.

Historic rare earth and niobium exploration was conducted from 1953 by the Geological Service of Kenya who assayed 81 test pits and also sampled the Government Shaft in the SW corner of the mineralised area reported from surface 26.6m at 14.6% REO. This exploration was followed up by Anglo American who between 1955-1957 dug some four hundred 10m test pits and drilled eight diamond drill holes. Pechiney Saint Gobain between 1969-1972 then undertook a Europium exploration program.

Pacific Wildcat Resources has confidence in the quality of the exploration results obtained and resource calculations completed by these reputable organizations but they precede the establishment of NI 43-101 standards and as a consequence cannot be relied upon. A drilling program designed to twin a significant number of the historic shafts/drill holes and confirm the historic results is underway on the Project with physical drilling having been completed in October 2010 and assays expected to be reported prior to the end of April 2011.

Although drill data at depth is limited, the historic diamond drill hole MK7 by Anglo American indicates considerable potential below the surface laterite layer for high Niobium grades. Significant intersections include:

  • 30.00 metres @ 4.83% Nb2O5 from 48.72 to 78.72 metres (including 5.51 metres @ 7.00% Nb2O5) and:
  • 6.96 metres @ 2.47% Nb2O5 from 26.03 to 32.99 metres.

(see Company News Release – Dated 23rd July 2010).

Summary

Prices of rare earth metals, tantalum and niobium appreciated substantially during 2010 and the recent rare earth export quota permanent reduction of 35% by China means continued high prices for Rare Earths are likely (China currently mines greater than 90% of the world supply of rare earths). With its Muiane Tantalum Project in Mozambique and its interest in the Mrima Hill rare earth/niobium project in Kenya, Pacific Wildcat aims to become a producer of strategic and rare earth metals.

ON BEHALF OF THE BOARD OF DIRECTORS OF PACIFIC WILDCAT RESOURCES CORP.

Darren Townsend, President

Investors are cautioned that trading in the securities of Pacific Wildcat Resources Corp. should be considered highly speculative. Cautionary note: This press release contains forward looking statements, particularly those regarding cash flow, capital expenditures, work programs and investment plans. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Resource estimates, unless specifically noted, are considered speculative. The Company intends to file a NI 43-101 report on the Mrima Hill property to confirm the historical resource estimate as soon as the information is available. All the niobium and rare earth drill results and estimates of historic resources predate and are therefore non-compliant with National Instrument 43-101 ("NI 43-101") reporting standards and should not be relied upon. The Company is not treating the historical estimates as current mineral resources or reserves. The Company has not undertaken any independent investigation of the drill results or resource estimates nor has it independently analysed the results of the previous exploration work in order to verify the resources and therefore the historical drill results and estimates should not be relied upon. The Company believes that these historical drill results and estimates provide a conceptual indication of the potential of mineral occurrences within the project and are relevant to ongoing exploration. The Company intends to confirm the historic resource estimate through drilling as soon as possible.

QUALIFIED PERSON AND DISCLAIMER

Qualified Person: Michael John Sperinck, BSc – Geology and Chemistry, MAusIMM, an independent consultant with Global Mining Services and qualified person under NI 43-101, and as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' has reviewed the scientific and technical data and exploration and resource contents relating to the Mrima Hill Project contained in this news release.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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