Salmon River Resources Ltd.
TSX VENTURE : SAL

Salmon River Resources Ltd.

December 15, 2011 09:00 ET

Salmon River Exercises Treppo Grande Option and Modifies Agreements to Include Deferred Payment

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 15, 2011) - Salmon River Resources Ltd. ("Salmon River" or the "Company") (TSX VENTURE:SAL) is pleased to announce that it has exercised the Option to acquire a 100% interest in Treppo Grande Iron Pty Ltd. (see press release dated 16 June 2010), a private Australian company which holds five granted tenements in the Yilgarn Craton of southwestern Australia, including the highly prospective Mt. Manning iron ore prospects (see Exploration Updates of 26 August 2010, 2 August 2011, 1 September 2011 and 11 October 2011).

In order to accommodate payment terms of the Option Exercise with the expected closing of the financing with the General Steel Group (see press release dated 4 November 2011), the Optionor and Salmon River have agreed to modify the date for completion of payment under the Option and to make other amendments to the purchase terms. Amendments to the terms include the following:

  • Completion and payment of the final Option Payment of A$100 million may be delayed up to April 30 2012.
  • Salmon River will pay to the Optionor A$1,000,000 for each calendar month that Completion is delayed from 30 December 2011 ("Pre-Completion Payments");
  • Pre-Completion Payments made by the Company to the Optionor will be deducted from the Purchase Price if Completion occurs, but are otherwise not refundable.
  • The Company will grant to the Optionor a royalty of A$0.50 per tonne of iron ore produced from the Tenement area from the commencement of first commercial mining on the Tenements.

"The exercise of the Treppo Grande Option is a major milestone for Salmon River and establishes our direct ownership of the highly perspective Treppo Grande tenements, including the Mt Manning iron ore discovery," noted Doug Betts, Salmon River Chair. "The amendment of the payment terms for the Option exercise now allows adequate time for the Company to close the significant transactions with General Steel Group and related financings. We now intend to move forward quickly to further develop the Treppo Grande iron ore project."

About Salmon River Resources Limited (TSX VENTURE:SAL)

Salmon River Resources Limited is a mineral exploration company engaged in the exploration for and development of commercial deposits of iron ore in Western Australia. It exercised its option to acquire five tenements in the Yigarn region of Western Australia including the Treppo Grande iron ore project, approximately 210 kilometres northwest of Kalgoorlie, comprising two tenements covering Mt Manning (298 km2) and the Barlee tenement (98.7 km2). Salmon River believes the Treppo Grande project has the potential to be a world-class iron ore deposit with early development potential. Salmon River has recently announced the signing of a Memorandum of Understanding with General Steel Holdings Inc. ("General Steel") (NYSE:GSI) providing for substantial future financing, off-take arrangements and the provision of management oversight (see press release dated 4 November 2011). The shares of Salmon River are listed on the TSX Venture Exchange under the symbol "SAL".

For further information see our website at www.salmonriverresources.com.

On behalf of the Board of Directors of SALMON RIVER RESOURCES LTD.

J.G. Stewart, President

Forward-Looking Statements: This press release contains forward-looking statements that are based on the beliefs of management and reflect Salmon River's current expectations. The forward looking information in this news release include information relating to the Company's intention to make a series Pre-Completion Payments and an Option Payment totalling A$100 million. The forward looking statements are based on certain assumptions, which could change materially in the furture, including the assumption that the Company will raise the funds required to make the Pre-Completion Payments and Option Payment, all necessary regulatory approvals and completion of arrangements with General Steel Holdings Inc. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such risks include that the Company may not raise the funds required to make the Pre-Completion Payments and Option Payment, receive any necessary regulatory approvals and complete any agreements with General Steel Holdings Inc. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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