Solace Resources Corp.

June 16, 2011 12:51 ET

Solace Resources Corp. Options Blachford Heavy Rare Earth Property, Thor Lake Area NWT and Announces Non-Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 16, 2011) -Solace Resources Corp. (TSX VENTURE:SOR) (the "Company" or "Solace") is pleased to announce that it has signed a binding agreement with Zimtu Capital Corp. (TSX VENNTURE:ZC)(FRANKFURT:ZCT1) and 877384 Alberta Ltd. (collectively the "Vendors") pursuant to which the Vendors have granted to Solace an option to acquire a 100% interest in and to the Blachford Rare Earth Element ("REE") Property, located approximately 100 kilometres southeast of the city of Yellowknife, Northwest Territories. The property is contiguous to Avalon Rare Metals Inc.'s ("Avalon") Thor Lake REE Project.

The Blachford Property consists of one claim, totalling approximately 1,000 acres, within the north-central part of the Blachford Lake Intrusive Complex. The Blachford Lake Intrusive Complex measures more than 10 kilometres in diameter, the largest portion of which is covered by Avalon's Thor Lake Project. At Thor Lake, five distinct zones or deposits of rare metal mineralization have been identified: the Nechalacho Deposit and the North T, South T, S and R Zones. Nechalacho is particularly notable for valuable heavy REEs such as europium, terbium and dysprosium, relative to light REEs such as lanthanum and cerium. The principal rock types in the Blachford Lake Intrusive Complex are syenites, granites and gabbros and associated pegmatitic phases hosting rare metal mineralization.

The Blachford Property optioned to Solace is located approximately 1,500 metres northwest of the Nechalacho REE Deposit and about 800 metres west of the North T Zone. The Property was staked by the Vendors when it became apparent that the area was open for staking in late 2010. The Vendors have also staked three additional claims (BLAT 01, 03, & 04 together the "BLAT Claims") which cover approximately 6,000 acres and are contiguous to the north of Avalon's Thor Lake Property. These claims are currently overlapped by a claim staked by a competing staker, with the overlapped portions under dispute. The Vendors and Solace have entered into a separate agreement so that any portion, or if applicable all, of the BLAT Claims that are formally granted to the Vendors will be added to the Blachford Rare Earth Property in the formal option agreement to be entered into between the parties.

To acquire a 100% interest in the Blachford Property, Solace has agreed, subject to acceptance of the TSX Venture Exchange ("TSX-V") to pay the Vendors $50,000 on signing the agreement, with additional cash payments of $150,000 over 12 months from receipt of TSX-V acceptance and:

  • One million common shares of the Company upon TSX-V acceptance;
  • 500,000 common shares of the Company on the 6-month anniversary of TSX-V acceptance;
  • 500,000 common shares of the Company on the 12-month anniversary of TSX-V acceptance;
  • 500,000 common shares of the Company on the 18-month anniversary of TSX-V acceptance.

The Vendors will retain a 2% Net Smelter Returns royalty on the property, of which 1% may be purchased from the Vendors for C$1 million. A finder's fee, subject to TSX-V acceptance, in amounts yet to be determined may be paid to persons who introduced the Company to the Vendors.

As a condition of the option, the Vendors require Solace to complete a private placement for total gross proceeds of a minimum of $500,000 and a maximum of $1,000,000. Accordingly, Solace also announces a non-brokered private placement financing of 6,000,000 units for gross proceeds of $600,000. Each unit is priced at $0.10 and will include one share and one share purchase warrant exercisable at $0.15 for a period of 5 years. All of the above is subject to TSX-V acceptance. Shares acquired by the placees, and shares which may be acquired upon the exercise of the share purchase warrants, will be subject to a hold period of four months plus one day from the date of completion of the financing in accordance with applicable securities legislation. Finder's fees and warrants in amounts yet to be determined may be paid to persons who introduce the Company to investors.The proceeds of the private placement will be used to make the payments to the Vendors outlined above and advance the Company's mineral exploration projects.

Solace also announces that it has granted 335,000 incentive stock options to directors and officers of the Company, pursuant to the Company's Incentive Stock Option Plan. The options are exercisable at a per share price of $0.13 until June 15, 2016.

NI 43-101 Disclosure

The technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 and reviewed on behalf of the Company by Jody Dahrouge, PGeo, of Dahrouge Geological Consulting Ltd., a qualified person.

This news release contains certain statements that may be deemed "forward-looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Solace Resources Corp. believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or realities may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Solace Resources Corp.'s management on the date the statements are made. Except as required by law, Solace Resources Corp. undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

Neither the 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 news release.

Contact Information

  • Solace Resources Corp.
    Kyle Stevenson
    Interim President & CEO and a director
    (604) 687-1779