Sphere Resources Inc.

Sphere Resources Inc.

August 19, 2011 14:03 ET

Sphere Resources Completes $4.5 Million Settlement With Kaldora and Lodges Alcourt Property NI43-101 on SEDAR

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 19, 2011) - Sphere Resources Inc. ("the Company"), listed on the NEX Board of the TSX Venture Exchange (TSX VENTURE:SPH.H) is pleased to make the following announcement:

Kaldora Settlement

In 2006 the Company entered into negotiations with Kaldora which culminated in an earn-in, option and joint venture agreement dated June 26, 2006 (the "Agreement") between Kaldora, Duration, DGML, and the Company regarding the maintenance, operation and acquisition of various mining and gold projects located mainly in Zimbabwe.

Under the Agreement Kaldora had the right to earn up to 75% of the issued shares of DGML (a company which was then owned mainly by Duration) by investing up to US$2,000,000 in DGML over a seven-month period from June 30, 2006.

Kaldora met the investment criteria and accordingly it was entitled at any time within forty months after having acquired the 75% of the issued shares of DGML (i.e. expiring no later than May 26, 2010), the "Buyout Option" to acquire Duration's remaining shareholding in DGML and intercompany debt in consideration for US$10,000,000.

On August 13, 2008, pursuant to the Kaldora Agreements, the Company received notice from Kaldora that it wished to exercise the Buyout Option available to it to acquire from Duration the shares in DGML owned by DRL for consideration of US$815,590 as a result of various deductions Kaldora claimed it was entitled to under the Agreement.

In response, Duration entered into litigation against Kaldora for breach of the Kaldora Agreements, in particular the payment of the consideration of US$10,000,000 for the shares in DGML as a result of Kaldora exercising its buy-out option.

Pursuant to the terms of a settlement agreement reached with Duration and Kaldora on January 14, 2011 Duration agreed to accept the sum of US$4.9 million on the basis that certain payments were paid by specific dates.

As reported in the Company's Audited Financial Statements filed in May 2011, Kaldora has paid the sum of US$1 million with the balance to be paid on or before June 30, 2011. Further payments were not made and the Company re-negotiated the terms which have now been settled for a total of $4,500,000.

Under a deed of assignment agreed by the Company on August 18, 2011; the Company has received a cash payment of $3,000,000, with the balance of $500,000 secured by a promissory note and payable the earlier of June 30, 2014 or the sale of several mines in Zimbabwe collectively or singularly to the value of US$5 million or more.

Mr. Malcolm Stevens, Executive Chairman and President said "he and the board and management of the Company are pleased to have resolved the settlement for the sale of its African gold interests at a time when the fluctuations and uncertainties in current markets and a pessimistic economic outlook permits the Company to accomplish the budgeted exploration programs prescribed in the NI43-101 report on the promising quartz vein structures #1, #2 and #3. In tandem with the exploration program the Company is also seeking to achieve its other stated objective to apply for graduation to Tier 2 of the TSX-V."

Lodgment of Alcourt Property Technical Report NI43-101 on Sedar to Start Process for Graduation from NEX to TSX-Venture

The Company lodged the technical report NI43-101 on its Alcourt property, Red Lake mining division, Ontario on Aug 15, 2011; the full report is available on the SEDAR website www.sedar.com.

The report relies on historical data which indicates that high grade gold mineralization hosted by quartz veins over narrow widths is present on the property. The quartz vein structures are best developed in an altered gabbro intruded near the contact of sediments and mafic volcanic rocks of the Slate Bay assemblage. Atkinson (1989) examined the structures on the property and concluded that Vein # 1 and Vein # 2 occupy gash fractures, which trend north-northwest and dip vertically. Examination of a typical cross section of the deposit indicates additional gold mineralization apart from the defined # 1 Vein and # 2 Vein. This suggests the possibility for the occurrence of multiple veins as yet undiscovered. Vein #3, which trends northeast, is considered to occupy one half of a conjugate set of veins, and similarly there is the possibility of additional gold-bearing veins. In 1981 Sherritt Gordon estimated an inferred resource of 20,000 tonnes grading 14 g/t Au within the upper 100 m of # 1 Vein and # 2 Vein.

The Company is not treating the historical inferred resource estimate as a NI 43-101 defined resource verified by a qualified person and the historical resource estimate should not be relied upon.

It is also apparent the existing data suggests that the gold-bearing veins, both tensional and conjugate veins are confined to a north-northwest-trending corridor defined by subdued magnetic responses. This represents a prospective area for the occurrence of additional gold-bearing veins. The preferred techniques for exploring this area include IP/RES and MAG surveys looking for subdued magnetic responses coincident with IP highs and RES lows indicative of silica-base metal sulphide alteration. Geochemical techniques include basal till sampling for heavy minerals (including native gold) and MMI techniques focused on areas within the magnetic "low" corridor.

In the opinion of Gerald A. Harron, M.Sc., P.Eng. and President of G.A. Harron & Associates Inc. who is independent of the Company and is a qualified person for the purpose of NI43-101 report; the character of the property and the presence of high grade gold mineralization are of sufficient merit to justify the recommended exploration programs.

The Company proposed to contract a legal survey of the Alcourt Property prior to the commencement of exploration activities, as all historical survey lines are over grown with dense shrubs and other vegetation. In a Phase 1 exploration work program Sphere proposes to establish a survey grid and complete both MAG and IP/RES surveys in order to search for geophysical indicators of prospective areas. Mechanical outcrop stripping will be followed by geological mapping of both the stripped area and prospecting of other areas within the magnetic "low" corridor. The object of this work will be to identify the geological controls of the gold mineralization and to assist in targeting other areas for follow-up work. A MMI geochemical survey is proposed to assist in the discovery of "blind" mineralization in the overburden covered areas associated with the magnetic "low" corridor. An attempt will also be made to verify the assays related to the panel sampling in 1989. A limited amount of diamond drilling (2,000 m) is proposed to confirm the gold zone at depth and along strike as well as to verify the historical assays. A $ 763,800 budget is proposed to support this work and can be viewed in the full report available on the SEDAR website www.sedar.com. As of the date of this report the Company has proceeded with parts of the Proposed Phase 1 work program. To take advantage of the frozen ground conditions, the geophysical surveys and a preliminary overburden stripping campaign have been completed. (See News Release of April 19, 2011).

About Sphere Resources Inc.

Sphere Resources Inc. is focused on identifying and appropriating exploration targets and other high quality assets in major global mining camps with a particular emphasis on precious metals. It is currently involved in exploring for gold mineralization in the Red Lake District of Ontario and Nevada U.S.A.

On behalf of Sphere Resources Inc.

Malcolm L Stevens, Executive Chairman and President

Neither the NEX Board of 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 release.

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