Southwestern Resources Corp.
TSX : SWG

Southwestern Resources Corp.

November 08, 2006 08:00 ET

Southwestern Resources Corp.: Zincore Metals Closes IPO and Commences Trading on the TSX

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 8, 2006) -

THIS NEWS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S., AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Southwestern Resources Corp. (TSX:SWG) ("Southwestern") announces that Zincore Metals Inc. ("Zincore"), formed as a wholly owned subsidiary in 2005 to maximize the value of Southwestern's zinc assets in Peru, has closed its IPO and will commence trading today on the Toronto Stock Exchange under the symbol ZNC.

"By transferring our zinc assets in Peru into a pure zinc company, Southwestern can now focus on our core gold and copper properties," said Southwestern's President and CEO, John Paterson. "Southwestern will remain the largest shareholder in Zincore and will benefit from its growth and value creation."

The Zincore IPO was priced at $0.50 per share and consisted of 38 million shares. The offering was underwritten by a syndicate led by Canaccord Capital Corporation, and including Raymond James Ltd. and Octagon Capital Corporation. Zincore has granted the underwriters a 30-day option to purchase an additional two million shares at the IPO price to cover over-allotments.

Net proceeds of $17.8 million from the IPO will be used by Zincore for exploration, drilling and technical work on the Accha-Yanque project and its other zinc properties, as well as general and administrative costs and general working capital.

Zincore's portfolio of assets includes the advanced Accha-Yanque property in southern Peru, a 30-kilometre long belt that contains historic and current resources and numerous other occurrences of zinc oxide mineralization. Zincore also has seven earlier stage zinc properties, all in southern Peru. In addition, the company has signed a letter of intent with Brett Resources Inc. ("Brett") to earn, subject to conditions, up to an 80% interest in Brett's Cerro Condorini zinc property in southern Peru.

Southwestern holds 38.6 million shares in Zincore (a 51.74% interest prior to any exercise of the over-allotment option). As disclosed in Zincore's prospectus, Southwestern's shareholdings in Zincore are subject to escrow provisions, and 34 million of such shares are also subject to a two-year lock-up agreement. Southwestern does not presently intend to increase its shareholdings in Zincore. A copy of the early warning report being filed by Southwestern may be obtained by contacting Sonya Reiss, Corporate Counsel, at (604) 669-2525.

About Southwestern

Southwestern is a Vancouver-based mineral exploration company focused on grass roots discoveries of gold and copper in southern Peru and the acquisition of early-to advanced-stage gold projects in China. At the end of June 2006, Southwestern had working capital of $52.3 million, total assets of more than $100 million, and no long-term debt. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.

About Zincore

Zincore's strategy is to become a leading, low-cost zinc producer with the immediate objective of advancing its Accha-Yanque zinc oxide project toward a development decision through a disciplined process of exploration, drilling and resource definition, and technical studies. The company holds a portfolio of other zinc exploration properties in southern Peru and intends to pursue additional zinc opportunities elsewhere in Latin America and China.

Forward-looking Statements

Statements in this release that are forward-looking are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in Southwestern's periodic filings with Canadian securities regulators and in the prospectus of Zincore in connection with the offering which is filed on SEDAR. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. Southwestern and Zincore do not assume the obligation to update any forward-looking statements.


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