Rym Capital Corp.

September 13, 2007 14:42 ET

Rym Announces Proposed Qualifying Transaction With Purepoint Uranium Group Inc.

TORONTO, ONTARIO--(Marketwire - Sept. 13, 2007) - Rym Capital Corp. ("Rym" or the "Company") (TSX VENTURE:RYM.P), is pleased to announce that it has signed an option agreement (the "Agreement") with Purepoint Uranium Group Inc. ("Purepoint") dated September 10, 2007 whereby Rym may acquire up to an undivided 51% ownership interest in Purepoint's Fire Eye property (the "Property") located in northern Saskatchewan.

The Property is located in the northwest part of the basin directly south of Lake Athabasca, Saskatchewan. The Athabasca Basin is filled by the Proterozoic Athabasca Group of relatively undeformed and flat-lying sedimentary rocks. The Athabasca Group unconformably overlies basement rocks of the Archean Rae Province in the Beaverlodge and Clearwater Domains.

Option Agreement

Pursuant to the Agreement, the Company will upon closing acquire an immediate undivided 20% ownership interest (the "Acquisition") in the Property upon the payment of $1,600,000 (the "Purchase Price"). The Purchase Price will be satisfied by a cash payment of $550,000 and the balance through the issuance of an aggregate of 5,250,000 common shares in the capital of Rym at a deemed price of $0.20 per share. It is a condition of the closing of the Acquisition that Rym raise at least $1,500,000 of additional equity.

Rym has the option to earn up to an additional 31% in the Property upon the completion of the following conditions:

1. Rym may earn an additional undivided 18% ownership interest in the Property by Rym funding an aggregate of $1,500,000 in expenditures by December 31, 2008.

2. Rym may earn an additional undivided 13% ownership interest in the Property by Rym funding an aggregate of $1,000,000 in expenditures by December 31, 2009.

Upon the closing of the Acquisition, Rym and Purepoint will enter into a joint venture agreement (the "JV Agreement") which will provide for the following material terms, among others:

(i) Purepoint will be the operator of the Property,

(ii) management and technical committees of which a majority of members are Purepoint nominees,

(iii) a commitment on the part of Rym to expend at least $1,500,000 of qualifying exploration expenditure on the Property prior to the end of 2008 (and prior to any obligation of Purepoint to contribute to joint venture expenses),

(iv) customary representations, warranties, covenants and transfer restrictions,

(v) a pre-emptive right in favour of Purepoint allowing Purepoint to maintain its pro-rata equity interest in future financings,

(vi) a first right of offer in favour of Purepoint on any disposition of the whole or any part of Rym's interest in the Property, and

(vii) the right of Purepoint to market any minerals derived from the Property.

In addition, Purepoint has granted Rym the option (the "William River Option") to earn up to an undivided 50% ownership interest in Purepoint's William River uranium property (the "William River Property"). On the closing of the Acquisition, Rym will pay a non-refundable option price of $200,000 (the "Deposit") to Purepoint for the William River Option. In the event that Rym proceeds with the William River Option, the Deposit will applied against the portion of the purchase price payable in cash for the initial ownership interest. The initial exercise of the William River Option is conditional on Rym being able to raise an additional $4,500,000 by January 31, 2008 (the "William River Private Placement"). In the event that Rym is unable to complete the William River Private Placement, the William River Option shall terminate and Purepoint shall retain the Deposit. The option on the Fire Eye Property will not be affected should the William River Option terminate.

In the event that William River Private Placement is completed and other conditions to closing satisfied, Rym and Purepoint shall enter into a formal option agreement which will provide for the following material terms, among others:

(A) Rym will acquire an immediate undivided 20% ownership interest for cash of $700,000 and balance through the issuance of 17,000,000 common shares at a deemed price of $0.20 per share,

(B) Rym may acquire an additional 15% ownership interest by spending $2,550,000 by end of calendar 2008,

(C) Rym may acquire an additional 15% ownership interest by spending $2,550,000 by end of calendar 2009, and

(D) Rym will be required to reimburse Purepoint for 50% of exploration expenses incurred or paid by Purepoint between September 10, 2007 and closing.

Private Placement

It is a condition of the closing of the Acquisition that Rym raise at least $1,500,000 of additional equity. Rym intends to issue an aggregate of 6,000,000 flow through common shares at a price of $0.25 per share for gross proceeds of $1,500,000. The proceeds will be used for the exploration of the Property. Rym will provide additional information regarding the proposed private placement at a later date. Closing of the private placement will occur concurrently with the closing of the Acquisition.

The Properties


Fire Eye Project

The Fire Eye project was selected and staked by Purepoint more than two years ago because of its apparent trend with the historic Beaverlodge uranium deposits near Uranium City. The property also displayed structural complexity as interpreted from historical airborne magnetics and was considered to be an ideal setting for uranium deposition. Purepoint has since collected acquired geophysical data that confirms the Fire Eye project is structurally associated with the Beaverlodge uranium belt. Based on recent airborne magnetic data, depth to basement on the Fire Eye project ranges between 400 to 1,300 metres with an average depth of 750 metres.

The Fire Eye property is located 50 kilometres southwest of the Gunnar Mine, which historically produced 19 million pounds of U3O8. It lies 80 kilometers southwest of the Beaverlodge district (an area of approximately 30 historical producing deposits that produced in excess of 50 million pounds of U3O8).

The Black Bay fault and splays off this fault are associated with the uranium deposits in the Beaverlodge area and strikes directly toward the Fire Eye project. To confirm that the Fire Eye structures were an extension of the Beaverlodge structures, in particular the Black Bay fault, Purepoint carried out a detailed, high resolution magnetic survey over the waters of Lake Athabasca. The survey results confirm this structural association between the Beaverlodge uranium belt and the Fire Eye project.

Purepoint has previously conducted a 377 line kilometre MEGATEM II airborne electromagnetic and magnetic survey over the Fire Eye property at a line spacing of 400 metres in order to confirm depths and areas of conductivity. In addition, an initial transient magnetotelluric ground survey was conducted on the property in order to identify the most effective methods of locating conductive zones and potential drill targets. A highly conductive layer was found to exist within the Athabasca sandstone, thought to be the Wolverine Point Shale, which effectively masks out or obscures conductors below it.

The magnetic interpretation has highlighted primary structures and lithologic contacts on the Fire Eye block. Areas of structural complexity are considered favourable uranium exploration targets and warrant further definition by geophysical surveys and testing by diamond drilling. The presence of the Black Bay structure under the Fire Eye claim block should allow direct exploration methods, such as reflection seismic, to accurately locate the faults. It is expected that gravity surveys will be useful to better define the fault as well as alteration zones that are associated with uranium deposition. Initial drill holes may be followed by downhole electromagnetic geophysics to locate target areas of conductive graphite for additional drilling.

William River Project

Purepoint acquired the northern portion of this very large property by permit in 2004 following its examination of older assessment and government survey data. This part of the Basin has been the subject of only very limited exploration efforts over the last 50 years. Purepoint's examination of the assessment and government data led it to believe that the William River area hosted an intriguing structural setting conducive to uranium deposition. The original William River claims are located less than 10 kilometres east of the Carswell Structure, which hosts the Cluff Lake mine.

Following closer interpretation of available data and its early work on the northern portion of this property, in early 2006 Purepoint staked the entire southern portion of the William River region. The project is currently made up of 25 claims covering 137,236 hectares. Purepoint's William River property is now entirely surrounded by more recently staked claims.

The Clearwater fault is a major fault structure that transects the length of the William River property. The fault is considered to be a long-lived structure that has undergone repeated activation, and is interpreted as terminating near the northern edge of the William River region. Long-term movement along this fault would have created favourable structures for trapping uranium-rich fluids along its length, particularly at its point of termination on the northern portion of the property.

The South-West corner of the William River claim group ties onto the COGEMA/UEX James Creek JV Project, a project which covers significant basement conductors detected by airborne geophysical (MEGATEM) surveys. COGEMA and UEX have encountered significant mineralization west of James Creek at the Shea Creek Project, including a high-grade intersection of 27.4% U3O8 over 8.8 metres in the Kianna Deposit area.

In June 2006, Purepoint completed a 1,700 line kilometre MEGATEM II airborne electromagnetic and magnetic survey. The survey was flown at a line spacing of 1,000 metres on the property in order to confirm depths and specific areas of interest. As follow up to that work, Purepoint then performed a sample helicopter borne VTEM survey over an area of conductivity interest on three of the southern claims.

The MEGATEM survey results, as interpreted by Condor Consulting, found several anomalies at basement depth. These form linear anomalies, striking northwest, and parallel to magnetic dyke structures that come to surface a few kilometres to the north, and are tentatively interpreted as basement graphitic sediments.

An airborne triaxial magnetic gradiometer survey is planned for this fall season to precisely isolate structurally complex zones. A gravity survey and reflection seismic survey designed to locate faults in the basement surface, specifically the Clearwater fault and associated splays, is also planned pending final cost and financing considerations.

Management and Directors

Upon closing of the Acquisition, the Company will appoint a number of new directors and officers. The following is a summary of the new board and senior management of the Company:

Bryan Wilson - President, C.E.O. and Director

Mr. Wilson has enjoyed a varied career for 22 years in the fields of mining exploration and development and 10 years in the financial services sector. Throughout his career, Mr. Wilson has held various positions such as a project geologist / manager (Shell Canada), Consulting Geologist, financial adviser (Scotia McLeod), Mining Analyst (C.M. Oliver) and Corporate Finance specialist (Dominick & Dominick and Thames Capital). Within the mining industry, Mr. Wilson has acquired a broad international exposure to a variety of mineral commodities in a variety of geological settings throughout the world and the attending problems of sampling and evaluation of mineral deposits.

Peter Hooper - Director

Mr. Hooper is a senior mining executive with broad-based experience in production, engineering, reorganization and training, contracting, exploration and corporate affairs. He is a former director of Purepoint Uranium Group Inc. and is at present a director of a number of public companies, including Khan Resources Inc. From April 2004 to September 2005, Mr. Hooper served as the Chief Operating Officer for Afcan Mining Corporation. From 2002 until 2004, Mr. Hooper served as managing director of mineral resources at Kingsdale Capital Corporation. Mr. Hooper also served as president of Valencia Resources Inc. from 2000 to May 2005. His senior production management experience includes uranium production in Canada with Eldorado Nuclear Uranium Mines Ltd. as well as gold production in South Africa and Ghana, and copper and zinc production in Canada. Mr. Hooper has been a senior mining executive with Consolidated Rio Australia Ltd., J.S. Redpath Mining Engineering Ltd., Dynatec Engineering Ltd., and Hooper Mining Services Inc. His consulting engineering projects were conducted in Canada, United States, Cuba, Columbia, Venezuela, Mexico, Chile, South Africa, Zimbabwe, Ghana, Zambia, Australia, Khrgyzstan, Kazakhstan, Uzbekistan, Russia, Saudia Arabia and France. Mr. Hooper holds a B.Sc. in Mining Engineering from University of the Witwatersrand, South Africa.

Chris Frostad - Director

Mr. Frostad is the President and C.E.O. of Purepoint Uranium Group Inc., an uranium exploration company with advanced projects operating across Canada's Athabasca Basin. Throughout his career, Mr. Frostad has been instrumental in the development and building of a variety of high growth, early stage, public and private companies. Prior to Purepoint he was C.E.O. in Residence of a Toronto-based Venture Capital firm. In the past, Mr. Frostad has been a guest lecturer at numerous business conferences such as the PDAC, as well as at the INSEAD School of Business in Fountainbleu, France and at ABB's Learning Center in Zurich, Switzerland.

Martin Bernholtz - C.F.O., Treasurer and Director

Mr. Bernholtz is employed as Vice President, Finance with Kerbel Group Inc, an integrated construction and land development company. In this capacity he is responsible for finance, accounting, personnel and residential management. He has been with Kerbel Group Inc. since 1988. He also serves as a director of several residential and commercial condominium. Mr. Bernholtz graduated with a bachelor degree in business administration from York University in 1981. He became a Chartered Accountant in 1984 and in 2000 became an Associate Reserve Fund Planner.

Finder's Fee

In connection with the closing of the Acquisition, Rym has agreed to pay Paige Capital Inc. ("Paige"), an arm's length party to Rym and Purepoint, a finder's fee of $100,000 which shall be paid through the issuance of 500,000 common shares at a deemed price of $0.20 per share. In the event that Rym enters into the William River Option, Paige will be paid a finder's fee of $75,000 which shall be through the issuance of 375,000 common shares at a deemed price of $0.20 per share.

Purepoint Uranium Group Inc.

Purepoint Uranium Group Inc., whose shares are listed for trading on the TSX Venture Exchange, is focused on the precision exploration of more than 42 defined target areas on its nine projects in the Canadian Athabasca Basin, including its two Basin projects joint ventured with Cameco Corporation and AREVA Resources Canada Inc. Established in the Basin well before the resurgence in uranium, Purepoint is actively advancing this large portfolio of multiple drill targets in the world's richest uranium region.

Regulatory Approval

Completion of the transactions are subject to a number of conditions, including but not limited to, approval of the TSX Venture Exchange (the "Exchange"). The transactions cannot close until the required approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all. The Acquisition is an "arm's length qualifying transaction" within the meaning of Policy 2.4 of the Exchange.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the Acquisition, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Rym should be considered highly speculative. The trading in common shares of Rym will remain halted pending review of the transaction by the Exchange.

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

Contact Information

  • RYM Capital Corp.
    Thomas Taylor
    President and Director
    (416) 597-1773