Prize Mining Corporation

Prize Mining Corporation

September 12, 2007 12:58 ET

Prize Mining Announces Proposed Acquisition of the Primrose Molybdenum Property

CALGARY, ALBERTA--(Marketwire - Sept. 12, 2007) - Prize Mining Corporation ("Prize") (TSX VENTURE:PRZ) is pleased to report that it has signed a binding letter of intent ("LOI") that sets out certain basic terms and conditions by which Prize may enter into an option agreement or some other mutually acceptable arrangement (the "Transaction") with Larry Bratvold ("Bratvold') and Brian Scott ("Scott") (Bratvold and Scott are collectively referred to the "Optionor") to acquire a 100% interest in the Optionor's Primrose Molybdenum Project ("Primrose Moly Project").

Prize also announces that it is satisfied with the results of its due diligence review of the Primrose Moly Project and will now proceed with the negotiation with the Optionor of definitive documentation (the "Transaction Documents") in respect of the Transaction. Prize and the Optionor agreed in the LOI that the Transaction Documents would provide Prize with the right to purchase a 100% interest in the Primrose Moly Project by paying $350,000 and issuing to the Optionor 550,000 common shares of Prize in tranches over the course of the three years following the date of the Transaction Documents. In addition, Prize and the Optionor agreed that the Transaction Documents would provide Prize with the obligation to incur expenditures on the Primrose Moly Project totalling $380,000 over the course of the three years following the date of the Transaction Documents in order to maintain its right to purchase the Primrose Moly Project. The LOI also provides that the Transaction Documents will provide that upon the completion of the purchase of the Primrose Moly Project, the Optionor will be granted a royalty in an amount equal to 3% of net smelter returns in all minerals produced from the Primrose Moly Project and that Prize will have the option to purchase one-half of such royalty for $2,000,000.

About the Primrose Moly Project

The Primrose property consists of 11 mineral claims (4,450 hectares) located in the Atlin Mining District, south of Whitehorse, Yukon, near the BC/Yukon border. Roads and infrastructure are located 14 miles north at the Mt Skukum minesite. The railway at Bennett is 19 miles to the east.

The property lies near the northeastern border of the wide northwest-trending belt of "Coast Intrusions" of Jurassic-Cretaceous age. It is situated just off the southwest corner of the Bennett Lake Cauldron Subsidence Complex and its related ring dykes. The Mt Skukum and Berney Creek ore bodies lie approximately 14 miles north of the property and the Adanac Molybdenum property at Ruby Creek near Atlin lies 100 miles to the east.

The chief lithology underlying the property is granite alaskite grading to quartz monzonite. Occurring within the outcrop area of the granite is a strong colour anomaly and well-developed fracture-zone, five by one kilometer in extent. Parallel tributary creeks may represent areas of more intense fracturing.

Limited prospecting in 1969 and 1978 located widespread molybdenum mineralization within and beyond the fracture zone. This occurs in four modes:

1. as medium to coarse disseminations in granite

2. as coarse blebs and rosettes lining and within quartz veinlets

3. as medium to coarse blebs along fractures

4. as very fine blebs and streaks lining micro-fractures

The outer limits of MOS2 mineralization were not met over the extensive area examined. All showings observed on the western slopes were in rusty granite, but many boulders of unaltered non-ferruganous, molybdenite-bearing intrusive rock were seen in creek bottoms, indicating that the mineralized zone extends to the east beyond the limits of the colour anomaly.

The fact that the 1969 prospecting located several boulder trails of molybdenum bearing rocks on the eastern slope of the mountain verifies this indication. Samples from these boulder trains assayed 0.41% and 0.549% molybdenite.

The "main showing" examined in 1978 by geologists for Pinto Resources is a 250 meter exposure of continual molybdenum consisting of very fine blebs lining microfractures in the bottom of a creek. Fracture density here is more than 15 per foot. This area represents the least leached area and if the rock is representative of the leached area, considerable molybdenum may exist below the oxidized cap.

Sphalerite, galena, chalcopyrite, cassiterite and florite occur in the southern part of the property, mostly associated with fracture zones and quartz veinlets. A three meter wide, zone of high grade sphalerite and galena occurs, with sulphides forming sub-parallel bands. Although more work is needed an aureole of polymetallic mineralization around a molybdenum core has been suggested. The geology of the property appears to be favourable for the occurrence of a "porphyry type" molybdenum deposit.

Regional geochemistry surveys taken by the BC Government have identified gold, silver, zinc, molybdenum, and lead anomalies, over the 95th percentile, on the property.

The information set out above was compiled from a 1992 survey by British Columbia Ministry of Energy, Mines and Petroleum Resources as part of the Regional Geochemical Survey Program.

The foregoing suggests that the potential exists on the Primrose property for a low grade, large tonnage, fracture-controlled molybdenum +/- tin deposit. In short, favourable features of the property include:

- Strong fracture system over 5.5 x 1 km area

- Strong pyritization accompanying fracturing

- Presence of widespread polymetallic mineralization, including Mo, Sn, Zn, Pb, and Cu, with Mo occurring dominantly along fractures.

- Previous exploration has also identified significant, disseminated and vein molybdenite over wide-spread areas of the property including the western slopes, the summit, and the eastern slopes of the mountain.

- Highly leached surface area with significant (250 meter) gully exposure of continuous Mo mineralization suggesting higher grade mineralization exists under the leached cap.

- Large unexamined regions of the property with the limits of Mo mineralization yet to be determined. In addition, ice fields in the northern cirques have receded greatly since 1969 exposing new areas next to Mo boulder trains to be explored.

- Adjacent to the Bennett Lake volcanic cauldera and its associated ring dikes.

Should the Optionor and Prize finalize negotiations and enter into the Transaction Documents, Prize anticipates carrying out a work program on the Primrose Moly Project as described below.

1. Prepare base maps and compile all available geological, geochemical, and claim data, including air and satellite images used to map lineaments and variation in textiles to improve on current knowledge of structure and lithologic distributions.

2. Follow-up prospecting, mapping and trenching of mineralized areas identified in previous exploration with emphasis on fracture density and rock alteration. Trenching and surface blasting to penetrate below the strongly leached cap.

3. Rock geochemistry survey to attempt to define a W or Sn-W aureole around a MO core in the host granite.

4. Geophysical techniques, including Induced Polarization, Electromagnetics, and Magnetics should be carried out, at least on a reconnaissance basis, to aid in understanding the location and geometry of mineralized zones.

5. Based on results of 1, 2, 3 and 4, a program of diamond drilling to test the mineralized zones at depth.

There is no certainty that Prize will successfully conclude negotiations with the Optionor and acquire the right to purchase the Primrose Moly Project. The completion of the Transaction is subject to acceptance by the TSX Venture Exchange.

Mr. William Dynes, P. Geol. is the Qualified Person, as defined in NI 43-101, who has reviewed and verified the scientific and technical mining disclosure contained in this new release.

About Prize Mining

Prize Mining Corporation (TSX VENTURE:PRZ) is dedicated to the exploration, discovery and development of precious metal deposits. Prize is exploring for gold in the Atlin area of British Columbia, Canada and for nickel-copper-palladium and platinum on the Muskox Layered Intrusion in Nunavut, Arctic Canada.

This news release contains forward-looking information including but not limited to comments regarding the timing and content of acquisitions and upcoming work program and geological interpretations. Forward-looking information includes disclosure regarding possible future events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action, and therefore, involves inherent risks and uncertainties. When used in this news release. The words "estimated", "plan", "anticipated", "expected", "intend", believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Prize to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. For any forward-looking information given, management has assumed that the analytical results it has received are reliable, and has applied geological interpretation methodologies which are consistent with industry standards. Although management has a reasonable basis for the conclusions drawn, there can be no assurance that forward-looking statements will prove to be accurate and actual results may differ materially from those currently anticipated in such statements.


Harry McGucken, President and CEO

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

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