Puget Ventures Inc.

Puget Ventures Inc.

September 11, 2008 14:04 ET

Puget Ventures Inc. Formalizes Werner Lake Mineral Belt Acquisition

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 11, 2008) - Puget Ventures Inc. ("Puget" or the "Company") (TSX VENTURE:PVS) is pleased to announce that it has formalized its acquisition of an undivided 100% interest in the Werner Lake Mineral Belt Properties in Kenora Mining Division of the Province of Ontario by the acquisition of 1592129 Ontario Inc. ("1592129"), previously announced on July 8, 2008. Pursuant to an agreement among Puget, 1592129 and the shareholders of 1592129, Puget will acquire all of the issued and outstanding shares of 1592129 (the "Transaction").

"Puget Ventures is very pleased to have concluded the due diligence portion of the acquisition of the first class Werner Lake assets," said Erin Airton, President. "With the Norpax Nickel Deposit, the two past-producing Werner Lake Cobalt Mines and the other significant exploration and resource expansion targets, we are very excited to move onto the ground with our team."

1592129 is the beneficial owner of the mineral interests known as the Werner Lake Mineral Belt Properties, which are comprised of mineral claims, leases, and licenses of occupation covering an area of approximately 1,700 hectares located in the Kenora Mining District in the Province of Ontario.

The mineral interests also include two options to acquire additional mineral interests located in the Reynar Lake area of the Kenora Mining Division in the Province of Ontario, including an option to acquire a mineral lease over mineral interests known as the "Norpax Property" and an option to acquire eight unpatented claims.

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. Further details of the Transaction are available in the Company's news release dated July 8, 2008.

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.

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. There are five mineralized zones with historically reported mineral resources on the property: the 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 cobalt-copper production, along with the Gordon Lake mine, which Puget's properties will surround. All have continued exploration potential and potential for historic resource expansion.

Puget Ventures Inc. also signed a Letter of Intent to acquire up to a 60% interest in an additional 1200 hectares controlled by Benton Resources Corp. (TSXV:BTC) on August 14, 2008.

Numerous other showings on the combined package 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.

The majority of the interests comprising the Werner Lake Belt Properties are held by Commerce Capital Inc., a shareholder of 1592129, in trust for 1592129. Commerce is entitled to a 1% net smelter return on all ores, minerals or concentrates produced from the Werner Lake Belt Properties.

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

Gerald Harper P.Geo., a qualified person as defined by National Instrument 43-101, has reviewed the contents of this release.

The Transaction

The Company, 1592129, and the shareholders of 1592129 had entered into the Letter of Intent dated July 8th, 2008, which is now replaced with a formal agreement dated September 8, 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 Capital Inc., a shareholder of 1592129, is a privately held company incorporated based in Nova Scotia, which holds most of the interests comprising the Werner Lake Belt Properties 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 Company does not anticipate any new members joining the Board of Directors of the Company as a result of the Transaction.


In consideration for the issued and outstanding shares of 1592129, the Company will provide the following:

(a) an aggregate total of $3,000,000, payable to Atlantis or as Atlantis may direct (on behalf of itself and on behalf of the shareholders of 1592129) in instalments, of which $35,000 has been paid 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 to the shareholders of 1592129 in two equal instalments over two years;

(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.

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

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.

The Company has also announced a concurrent private placement financing (see the Company's news release dated August 27, 2008). Completion of the Transaction is conditional on completion of the private placement financing.

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.

Concurrent Financing

The Company has arranged a brokered private placement, through a syndicate of agents led by Canaccord Capital Corporation and including Research Capital Corporation and Dundee Securities Corporation, (the "Agents"). The private placement consists of 1,875,000 Units and 3,530,000 Flow-Through Shares (the "Offering") for total proceeds of $4,500,500. The Company has also granted the Agents an option to sell additional Units and Flow-Through Shares to raise additional gross proceeds of up to $2,000,000 (in any combination of Units and FT Shares). Each Unit is priced at $0.80 and consists of one common share and one-half of a common share purchase warrant, exercisable into a common share at $1.00 within an eighteen (18) month period. Each Flow-Through Share is priced at $0.85.

Proceeds of the financing will be used to make the first payment under the Transaction, fund general exploration expenditures on the extensive Werner Lake properties in north western Ontario, to meet exploration commitments on the Trout Bay property in Red Lake, Ontario and for general working capital.

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 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.

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