RX Exploration Inc.

June 07, 2007 16:16 ET

RX Exploration Inc. ("RX") Issues Progress Report

TORONTO, ONTARIO--(Marketwire - June 7, 2007) - RX (CNQ:RXEX) wishes to provide a progress report on its various projects.

Montana Mining Project - Under two separate option agreements, RX was granted the right to acquire two mining properties comprising (i) The "Hard Rock Claims" in Marysville District which, prior to the 1980's, consisted of the number one hard rock gold producer in the State of Montana, the Drumlummon Mine; and (ii) the "Placer Claims" which included the tailings from the Drumlummon Mine which was by far the largest and most profitable mine in the Marysville District. As reported in RX's news release dated April 4, 2007, the Issuer conducted metallurgical test work on the Placer Claims and decided to drop the option on the Drumlummon Tailings property due to the presence of mercury in the tails and the concentration test products, and management's analysis of the risks inherent in a project involving mercury contamination. Pursuant to an amended option agreement dated May 17, 2007, the Issuer formally waived and surrendered all right, title and interest in the Placer Claims and agreed to deliver on an accelerated basis by June 16, 2007 the 200,000 common shares in the capital of RX required to maintain the option with respect to the Hard Rock Claims. Additionally, RX paid the property owners the sum of US$110,000 and the time for payment of the remaining US$130,000 of the first annual US$240,000 payment was extended to July 20, 2007.

RX is contemplating a further diamond drilling program in the summer of 2007 upon completion of necessary funding. Management has been involved in extensive discussions with a registered securities dealer regarding the potential of the dealer acting as agent for a financing to fund the Issuer's ongoing work on the Drumlummon Mine project. No agreements have been completed to date and the potential agent is currently conducting its own due diligence on the project, in particular, with respect to the availability of various permits that may be required in the State of Montana. In the event that an agreement is not concluded with the potential agent, RX intends to complete a private placement with accredited investors of up to 7,500,000 common shares at a price of $0.10 per share to enable it to make the US$130,000 option payment due by July 20, 2007. All or part of the placement may be subscribed for by insiders of RX. Subject to all necessary corporate and regulatory approvals, a significant shareholder of the company has agreed with RX to convert accrued liability in the amount of $181,556 into equity by payment of 1,815,560 common shares of RX at a price of $0.10.

L.J. Bardswich, P.Eng. (Ontario), a Qualified Person as defined in N.I. 43-101, supervised the drilling and sampling programs on the Drumlummon Mine and Drumlummon Tailings properties. He is responsible for the technical details concerning the Drumlummon properties contained in this news release.

Tudhope-Bryce Townships - Ontario - RX is in default of the cash and share option payment requirements under its option agreements. Management of RX is evaluating with its technical and financial advisors the results of the drilling programs on the Tudhope and Bryce Township properties which were announced in its news release dated April 4, 2007 but has yet to determine its future plans.

Veekay Lake - Ontario - RX is prepared to commence exploration on the Veekay Lake Project. In order to accomplish its business objectives, the Issuer commissioned a program of line-cutting in preparation for an IP survey on the Veekay Lake Project. RX is continuing consultation through its joint venture partner with a First Nation prior to commencing exploration on the Veekay Lake Project. A protocol has yet to be concluded with the First Nation. In the meantime, assessment work requirements have been held in abeyance.

RX Exploration Inc. (CUSIP # 78347W107) is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNQ (Symbol: RXEX). There are currently 17,693,116 common shares issued and outstanding.

Contact Information

  • RX Exploration Inc.
    Murray R. Nye
    President and Director
    (204) 989-2434
    (204) 989-2433 (FAX)