Puget Ventures Inc.
TSX VENTURE : PVS

Puget Ventures Inc.

July 08, 2008 15:24 ET

Puget Venture Inc. Signs Agreement to Acquire Werner Lake Mineral Belt Properties

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 8, 2008) - Puget Ventures Inc. (TSX VENTURE:PVS) ("Puget" or the "Company") is very pleased to announce today that it has entered into an arms-length and binding Letter of Intent with 1592129 Ontario Inc. ("1592129"), Commerce Capital Inc. ("Commerce") and other shareholders of 1592129 to acquire an undivided 100% interest in the Werner Lake Mineral Belt Properties in the Kenora Mining Division of the Province of Ontario, through the acquisition of the securities of 1592129 (the "Transaction").

1592129 is the owner of the mineral interests known as the "Werner Lake Mineral Belt Properties", which comprise of 79 claims and 69 licenses of occupation. The mineral interests also include two options to acquire additional claims, including the patent claim known as the Norpax Property and two unpatented claims known as the Harper Option and the Rives Option.

This Transaction will constitute a Reverse Take Over (RTO) under the policies of the TSX Venture Exchange the ("Exchange") and will require, among other things, approval from the disinterested shareholders of the Company.

The Company is currently an Exchange Tier 2 Mining listed issuer. The Company first listed on the Exchange on October 31, 2007 as a CPC and subsequently underwent a Qualifying Transaction with the acquisition of an earn-in option on the Trout Bay Property in Red Lake, Ontario. Coincident with the Qualifying Transaction, Puget Ventures Inc. completed a financing for $1.5 million, targeted for first year operating and exploration activity on the Trout Bay Property. Puget is currently operating a 2000 metre drilling program on Trout Bay's historic Copper-Zinc deposit with assay results expected in early fall.

Upon completion of the Transaction, the Company will continue to be engaged in the exploration and development of mineral properties.

About the Werner Lake Belt Properties

The Werner Lake Belt Properties consist of approximately 1,700 hectares in the Kenora Mining District in the extreme western part of the Province of Ontario. These claims were acquired by Commerce Capital Inc. in trust in 2003, after the previous owner, Canmine, entered bankruptcy proceedings.

There are six mineralized zones with formally reported mineral resources on the property: Norpax deposit, West Cobalt deposit, the Werner Lake Minesite Cobalt deposit, the Eastern Shallows Cobalt deposit and the Big Zone deposit. Both the West Cobalt deposit and the Werner Lake Minesite have experienced past production, along with the Gordon Lake mine. All have continued exploration potential and potential for historic resource expansion.

Numerous other showings have not been explored adequately to assess their mineral association and potential including the Central, Rexora No 3 and Rexora No 4. The areas of these showings were not covered by either of the airborne magnetic/electromagnetic surveys undertaken by earlier owners Canmine and Atikwa. Puget would plan to fly additional airborne surveys to fill in the gap in these surveys and integrate the results with the earlier data.

The Norpax Nickel-Copper deposit is located approximately seven kilometres east of the Manitoba border at Tigar Lake.

The Werner Lake Minesite Cobalt deposit is 500 metres east of the West Cobalt Deposit, which was mined during World War II. Both are located approximately 14 kilometres from the Manitoba border. The Werner Lake Minesite Cobalt deposit was the focus of activity by previous owner Canmine prior to their bankruptcy proceedings.

The Big Zone is located on unpatented mining claim 1208152 between Seal Lake and Tigar Lake, west of Werner Lake, approximately seven kilometres east of the Manitoba-Ontario border.

The Eastern Shallows deposit has a nickel-platinum group elements association and low cobalt in contrast with three of the other deposits, namely the Werner Lake Minesite, West Cobalt and Big Zone. It is located 4.2 kilometres east of Werner lake Minesite Deposit, near the eastern shore of Gordon Lake.

In addition to the potential expansion to existing resources, Puget Ventures Inc. plans an extensive review of previous work by the Ontario Geological Society, among others, to further target exploration opportunities on the Werner Lake Mineral Belt.

The Transaction

The Company, 1592129, Commerce and the other shareholders of 1592129 have entered into the Letter of Intent dated July 7th, 2008.

1592129 is a privately held company incorporated in 2003 and based in Toronto, Ontario. The majority shareholder of 1592129 is Atlantis Minerals Inc., a privately held federal company incorporated in 2003. Commerce is a privately held company incorporated based in Nova Scotia who is also a shareholder of 1592129. Commerce also owns certain mineral interests in trust for 1592129. Wayne Turner, of Halifax, Nova Scotia, controls 1592129, Atlantis and Commerce. As a result of this Transaction, Mr. Turner will become a control person of the Company.

The names and jurisdiction of residence of each of the shareholders of 1592129, together with the names and jurisdictions of residence of each of the individuals who directly or indirectly beneficially hold a controlling interest in corporate shareholders, are listed below:



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Name of Individuals Jurisdiction
Shareholder with Controlling Interests of Residence
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Atlantis Minerals Inc. Turner Family Trust Ontario

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Commerce Capital Inc. Janet Turner Nova Scotia

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Merit Investment Co. Ltd. Harvey Meretsky Nova Scotia

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Poplar Properties Inc. Bill Johnstone Ontario

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Brian Cavanagh Nova Scotia
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Carle Ensminger Nova Scotia
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Larry Langley Nova Scotia
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Catherine Turner Nova Scotia
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Janet Turner Nova Scotia
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Mike Turner Ontario
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Scott Turner Ontario
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Wayne Turner Nova Scotia
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William Turner Nova Scotia
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Concurrent with the closing of the transaction, it is contemplated that there will be no new members joining the Board of Directors of the Company.

Consideration

(a) In connection with the Transaction, the Company will acquire all of the issued and outstanding securities in the capital of 1592129 for payment of the following: an aggregate total of $3,000,000, payable to Commerce or as Commerce may direct (on behalf of itself and on behalf of the shareholders of 1592129) in instalments, with $35,000 to be paid within 10 days of July 7, 2008 as a deposit, $965,000 to be paid on closing and $1,000,000 on each of the next two anniversary dates of closing;

(b) an aggregate total of 8,000,000 common shares in the capital of Puget , issued pro-rata to the shareholders of 1592129 in two equal instalments over one year;

(c) an aggregate total of 4,000,000 transferable share purchase warrants, each warrant entitling the holder to purchase one additional share at an exercise price of $1.50 per share, for a period of two years from closing;

(d) an additional aggregate total of 4,000,000 transferable share purchase warrants (the "Upside Warrants") to be issued on the first anniversary of closing, each entitling the holder to purchase one additional share for a period of two years from the date of issue, as follows:

(i) 2,000,000 Upside Warrants shall have an exercise price at $2.00 per share; and

(ii) the remaining 2,000,000 Upside Warrants shall have an exercise price at $4.00 per share.

Commerce shall also be entitled to a 1% net smelter return on all ores, minerals or concentrates produced from the Werner Lake Belt Properties, except on the Harper and Rives Options.

Concurrent Financing

As a condition of the Transaction, the Company must complete a financing of no less than $2 million. The terms of this financing will be announced at a later date.

Sponsorship of RTO

Sponsorship of a RTO is required by the Exchange unless exempt in accordance with the policies of the Exchange. The Corporation will apply for an exemption from sponsorship requirements on the basis that the Corporation, following the RTO, is a mining issuer with interests in Canadian based resource properties with a current Geological Report on each of the Corporation's principal properties and as such falls within the sponsorship exemptions of the Exchange policies. However, there is no assurance the Corporation will obtain this exemption.

Conditions to Closing

Closing of the Transaction is subject to a number of conditions, including, due diligence to be completed by both Puget and Commerce (on behalf of the other shareholders of 1592129) on or before August 8, 2008, execution of a definitive agreement on or before August 12, 2008, the concurrent financing of at least $2 million and all necessary approvals including shareholder approval and acceptance for filing by the Exchange.

Completion of the Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. It is anticipated that the Company will seek to obtain written shareholder approval from 50.1% of the shareholders of the Company. There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the Transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Puget Ventures Inc. should be considered highly speculative.

Dave Laudrum P.Geo., a qualified person as defined by 43-101, has reviewed the contents of this release.

Forward Looking Statement:

Some of the statements contained herein may be forward-looking statements which involve known and unknown risks and uncertainties. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various risks. The following are important factors that could cause the Company's actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events may differ materially from those anticipated in such statements. The Company undertakes no obligation to update such forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on such forward-looking statements.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Puget Ventures Inc.
    Ms. Erin Airton
    President
    (604) 601-8526 or (604) 808-6420
    (604) 669-3844 (FAX)
    Email: eairton@pugetventures.com