Santoy Resources Ltd.
TSX VENTURE : SAN

Santoy Resources Ltd.

August 12, 2008 10:01 ET

Santoy Expands Otish Uranium Portfolio

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 12, 2008) - Santoy Resources Ltd. (TSX VENTURE:SAN) is pleased to announce that the Company has entered into an Option Agreement with Xemplar Energy Corp. (TSX VENTURE:XE) to acquire up to one hundred percent interest in 1,241 claims totaling approximately 61,194 hectares in four main blocks strategically located on the northwestern margin and in the east-central portion of the Otish Basin, Quebec. The property package is highly complementary to Santoy's current uranium exploration portfolio and has excellent potential for discovery of high-grade uranium mineralization similar to the nearby Matoush deposit of Strateco Resources Inc. where a newly released resource calculation totals 3.73 million pounds uranium in the indicated category and 13.07 million pounds in the inferred category (Strateco news release Aug. 07, 2008).

The Xemplar property package includes several drill-ready uranium prospects and surrounds several small claim blocks covering the Marc-Andre prospect (the Santoy Resources/Otish Energy 50:50 Joint Venture), the Seru L-Zone uranium deposit (AREVA Resources/SOQUEM) and the Seru S-Zone and G-Zone occurrences (Golden Valley Mines/Lexam Explorations). The acquisition is another significant step in the Company's stated goal to expand its Otish Basin involvement.

The Seru L-Zone, completely surrounded by Xemplar claims, has a historic resource of 380,000 tonnes grading 0.60% U3O8 (approx. 5,070,000 lbs.) and 0.8 g/t Au. These estimates are historic in-house calculations by Seru Nucleaire that have not been verified, and do not conform to the present requirements of Canada's securities regulations NI 43-101 regarding resource and reserve definition.

The potential of the Xemplar properties was the subject of a 43-101 technical report by Andre Pauwels, P.Geo. in 2005. This report is available on the SEDAR website under Xemplar Energy Inc. Pauwels recommended an airborne electromagnetic survey over portions of the properties, and drill testing of three prospective targets where a previous operator, Cogema, had defined uranium mineralization but did not pursue exploration (see below). An Aerotem II electromagnetic and magnetic survey was subsequently flown over four areas in 2006. A number of magnetic and conductive horizons were identified that require further investigation.

The three exploration targets recommended for drilling are located on the eastern Xemplar claim blocks and are described as follows:

- DDH OELU 22 area. Uranium mineralization (0.17% U3O8 over 0.8 metres) occurs on the south side of a gabbro dyke at this site. The nearest drill tests along strike are 500 metres north and 200 metres south of the hole.

- DDH OELV 290 area. An intercept of 0.15% U3O8 over 4.5 metres, including 0.47% U3O8 over 1 metre in drill hole 290, together with radioactive zones in neighboring holes, is located within a NNE-trending zone of silicification in sandstone capped by a gabbro sill. The mineralized zone appears open and is untested by drilling to the NNE. The nearest test hole to the SSW is 400 metres away.

- Lac Tion area. Uranium mineralization is indicated over a 2.5 km strike length by anomalous lake sediment and soil samples. Minimal drilling with two fences of short "Winkie" holes identified an altered dolerite dyke with anomalous uranium values (0.05% U3O8 over 0.8 metres) as the possible cause. Alteration extends well into the siltstone and sandstone host rocks.

The westernmost claim block, "Block 1", is located on the northwestern margin of the Otish Basin and surrounds the Marc-Andre claim block of Santoy Resources/Otish Energy. Historical exploration by Uranerz in the 1980's located uranium mineralization associated with a northeast trending altered gabbroic dike. The Marc-Andre occurrence was investigated by trenching which exposed uranium mineralization within and adjacent to the gabbroic dike. Grab samples are reported to have returned assays up to 0.26% U3O8. The property also covers the Lorenz Gully uranium prospect which is located a short distance northwest of the basin margin and was explored with 38 holes by Uranerz in 1978-1984. The best-reported mineralization (1.87% U3O8 over 0.5 metres in hole LG-10) is hosted in a steep fault zone in Archaean basement rocks that trends southeasterly beneath the sandstones of the Otish Basin. This setting is favourable for unconformity style uranium deposits.

The option terms for Santoy to earn a sixty percent interest in the Properties include a cash payment of $250,000, a work commitment of $1.5 million (of which $500,000 is to be spent prior to January, 2009), and the issuance of 4 million Santoy shares (1 million upon regulatory approval of the Agreement and 3 million shares on the first anniversary of the Agreement). By exercising the option Santoy will have the choice of initiating a 60% Santoy-40% Xemplar joint venture in which Xemplar will be carried for the first $1 million in expenditures, or delivering to Xemplar 6 million shares of Santoy to obtain a 100% interest in the property. If Santoy elects to earn one hundred percent interest, a three percent Net Smelter Return royalty would be reserved for Xemplar and Xemplar's underlying vendor. Santoy would retain the option, at any time, to purchase half of the total royalty payable for $500,000. Santoy will act as the Operator during the term of the Agreement.

Santoy will immediately commence a field program of geophysical surveying, lake sediment sampling, prospecting and geological work on targets on the Xemplar claims. Geo Data Solutions Inc. of Laval, Quebec has been retained to fly a high-resolution magnetic-radiometric survey over the Xemplar ground.

The technical data in this news release has been approved by Santoy's Vice President of Exploration, Mr. Mike Cathro, P. Geo., a qualified person as defined by NI 43-101.

On Behalf of the Board of Directors

SANTOY RESOURCES LTD.

R. K. Netolitzky, President & CEO

Cautionary Statement on Forward-Looking Information

The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

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

Contact Information

  • Santoy Resources Ltd.
    Ron Netolitzky
    President
    (604) 669-4799
    or
    Santoy Resources Ltd.
    Tony Perri
    Investor Relations, Manager
    (604) 669-4799
    (604) 669-2543 (FAX)
    Website: www.santoy.ca