Silver Spruce Resources Inc.
TSX VENTURE : SSE
FRANKFURT : S6Q

Silver Spruce Resources Inc.

April 04, 2006 15:26 ET

Silver Spruce Resources Inc. Announces $4.4 Million Financing

BRIDGEWATER, NOVA SCOTIA--(CCNMatthews - April 4, 2006) - Silver Spruce Resources Inc. (TSX VENTURE:SSE)(FWB:S6Q) (the "Company") is pleased to announce that it has entered into an agreement with Pacific International Securities Inc. (the "Agent") to raise, on a commercially reasonable efforts basis, up to $4,400,000 (the "Offering"). The Offering will consist of the issuance of up to 4,000,000 flow-through units (the "FT Units") and up to 4,000,000 non-flow-through units (the "Units") of the Company.

Each FT Unit will be offered at a price of $0.60 and will consist of one flow-through common share and one common share purchase warrant, with each whole warrant exercisable at a price of $0.65 per common share for a period of 18 months following the close of the Offering. Each Unit will be offered at a price of $0.50 and will consist of one non-flow-through common share and one common share purchase warrant, with each whole warrant exercisable at a price of $0.65 per common share for a period of 18 months following the close of the Offering.

As consideration for acting as agent, the Company has agreed to pay to the Agents a commission of 7%, payable, at the election of the Agent, in any combination of cash or units having the same terms as the Units of the Offering. In addition, the Company will pay the Agent a compensation option equal in number to 9% of the aggregate number of Units and FT Units sold under the Offering, which will entitle the Agent to purchase, at an exercise price equal to $0.65, one common share for a period of 18 months following the closing.

The flow-through funds raised from the issuance of the FT Units will be used for general exploration expenditures on the Company's Newfoundland and Labrador projects, which will constitute Canadian exploration expenses (as defined in the Income Tax Act) and will be renounced for the 2006 taxation year.

Proceeds arising from the sale of the non flow-through Units will be used for exploration on the Company's Labrador and Newfoundland properties and for general working capital purposes.

The offering is subject to TSX Venture Exchange approval and all other required approvals. All securities issued in connection with this offering will be subject to a four-month hold period in accordance with securities requirements.

About Silver Spruce Resources Inc.:

Silver Spruce Resources Inc. is primarily focused on uranium exploration in the Central Mineral Belt (CMB) of Labrador. The Company holds 4,963 claims (approximately 1,200 sq. km) in the Central Mineral Belt of Labrador, Canada, to the southwest of Postville, making the Company the second largest claimholder in this emerging uranium district. The properties are being explored jointly under an agreement with Universal Uranium Ltd. (TSX VENTURE:UUL) of Vancouver, British Columbia. Under the terms of the agreement, Universal can earn a 60-per-cent interest in the properties by spending $2-million on exploration over a three-year period. The Company is the operator during the earn-in period. In addition, the Company holds 2,050 claims totaling 51,000 hectares/512 sq km, over three areas of uranium in lake sediments; Double Mer, Straits and Mount Benedict. For more information visit: www.sse-tsx.com.

ON BEHALF OF THE BOARD OF DIRECTORS

Gordon Barnhill, CFO and Director

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents herein.

Contact Information

  • Silver Spruce Resources Inc.
    Gordon Barnhill
    CFO and Director
    (902) 527-5700
    www.sse-tsx.com