Strachan Resources Ltd.
TSX VENTURE : SCN.P

June 20, 2011 19:30 ET

Strachan Resources Inc. Announces Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2011) - Strachan Resources Ltd. ("Strachan") (TSX VENTURE:SCN.P) is pleased to announce that it has entered into an agreement dated June 10th, 2011 with Silver Sun Resource Corporation ("Silver Sun"), a B.C. corporation and Minera Plata del Sol, S.A. de C.V. ("Minera"), the wholly owned subsidiary of Silver Sun, a Mexican corporation, in respect of a proposed "qualifying transaction" that is to be conducted in accordance with TSX Venture Exchange Policy 2.4 concerning Capital Pool Companies.

Under the terms of the agreement, Strachan will acquire from Minera its 100 percent interest in the Yoreme Property described below (the "Yoreme Property") for an aggregate price of CDN$300,000 consisting of 2,500,000 common shares of Strachan at a deemed price of $0.10 per share and $50,000 cash.

Upon completion of the qualifying transaction, Strachan will be a Tier 2 Mining Issuer.

The proposed acquisition will be negotiated and carried out by the parties dealing at arm's length to one another and therefore will not be a Non-Arm's Length Qualifying Transaction, as such term is defined under the rules and policies of the TSX Venture Exchange ("Exchange"). As a result, the proposed acquisition will not require shareholder approval from the shareholders of Strachan. There will be a finder's fee of $5,000 paid as part of this acquisition.

Acquisition of Yoreme Property

The Yoreme Property is situated in the Alamos Mining District in southern Sonora State, Mexico, which consists of one claim, which is 400 hectares in size, located approximately 14 kilometres west of the city of Alamos.

The Yoreme Property is a silver, lead zinc property located in the Alamos Mining District which lies in the western foothills of the prolific Sierra Madre mineralized belt that extends from Arizona through northern Mexico. Numerous large scale producing mines operations occur within the region with the two most proximal being Piedras Verdes Mine (Rio Tinto) located 20 km to the north-northeast of Yoereme, and the Alamos Dorado Mine (PanAmerican Silver) located 47 km southeast of Yoreme.

The historic San Manuel workings on the polymetallic fissure fill vein and breccia structure occurs at the southwestern extent of the prolific Alamos mining district. The San Manuel structure trends northeast, parallel the numerous structures that host fissure fill mineralization that make up the ore deposits in the northern portion of the Alamos Mining district. The fracture fill mineralization is hosted in granodiorites of the coast intrusive batholith. Mineralization consists of quartz carbonate veins and hydrothermal breccias within a well defined structure. There is limited wall rock alteration in the host granites. Silver mineralization occurs with galena and acociated shalerite within the vein matrix.

Access to the Yoreme property is via approximately 15 km of improved gravel road extending from Mexico State highway 162 that runs from Navojoa to Alamos. Direct vehicle access to the workings near the centre of the property exists and the site improvements and topography allow for easy drill access. Local infrastructure includes: proximity to a major city, proximity to major paved highway, near to electrical power lines, and located in a major mining district with available work force. Driving time to the property form Hermosillo is 4.5 hours and from Alamos is 30 minutes. The climate within the property area is arid to semi-arid, typical of lower elevations in the Sonoran desert; seasonal rains occur between June and September.

Mineralization encountered to date on the Yoreme Project property consists of Low sulphidation, fissure fill, polymetallic veins. The Yoreme project has had small scale historic exploitation of Ag-Pb-Zn ore from three shafts and a surface cut on the San Manuel Vein.

Vendor

The vendor of the Yoreme Property is Minera, which is a company formed under the laws of Mexico. Minera is a wholly owned subsidiary of Silver Sun. Silver Sun a company duly incorporated in BC and a reporting issuer in BC and Alberta, and listed on the TSX Venture Exchange (symbol: SSU). Michael Johnson and Tom Kordyback are two of the directors of Silver Sun and will also become directors of Strachan upon completion of the Qualifying Transaction.

Conditions of Closing

Completion of the proposed acquisition will be subject to certain conditions including:

(a) completion of a satisfactory due diligence review of the Yoreme Property by Strachan and of Strachan by Silver Sun;

(b) approval of the acquisition from the board of directors of both Strachan and Silver Sun;

(c) Minera completing minimum expenditures of $100,000 Canadian funds on the Yoreme Property, which expenditures are accepted by the Exchange for purposes of meeting the listing requirements of the Exchange;

(d) Strachan obtaining a report prepared in accordance with NI 43-101 Standards of Disclosure for Mineral Projects for the Yoreme Property (the "Property Report") after the minimum expenditure of $100,000, and which recommends a further phase 1 work program of a minimum of $200,000;

(e) Strachan obtaining a legal opinion acceptable to Strachan and to the Exchange with respect the Yoreme Property and the execution of this Agreement;

(f) Approval by the Exchange of all elements of this transaction as a Qualifying Transaction as defined by Exchange policy, including without limitation the purchase and sale of the Claim, the Private Placement, the expenditures on the Yoreme Property, and the Property Report ("Regulatory Approval"); and

(g) Strachan completing a private placement referred to below for proceeds of $290,000.

Private Placement

The proposed non-brokered private placement will be for $290,000 by the issuance of up to 2,900,000 units of Strachan at $0.10 per unit, with each consisting of one share and one warrant, with each warrant exercisable for one year at $0.15 per share. Strachan intends to use the proceeds to finance the cash portion purchase price of the proposed acquisition, to carry out the recommended work program on the Yoreme Property and for working capital.

Transfer of Escrow Shares

As part of the entire transaction, the existing holders of escrow shares of Strachan have agreed to transfer within escrow, subject to Exchange approval, 1,100,000 shares currently held in escrow to the proposed new directors and officers of Strachan on completion of the Qualifying Transaction..

Grant of Options at $0.10 to Directors and Officers

The Company plans to grant stock options to directors and officers on completion of the transaction to purchase up to 550,000 shares at $0.10 per share for five years. Of the current options, options to purchase 150,000 shares will be cancelled on closing.

Deposit of Funds

The Company has not paid any funds on deposit or made any loans to the vendor in relation to the agreement to acquire the Yoreme Property or for any other purpose in relation to these transactions.

Sponsorship

Strachan will be seeking a waiver from the Exchange for the appointment of a sponsor for this transaction.

Directors and Officers

The board of directors of Strachan after the closing of the Qualifying Transaction will be composed of Michael J. Johnson, Ezra Jimenez, Steve Mathiesen, Michael G. Allen and Tom Kordyback. Michael J. Johnson and Tom Kordyback are and will continue to be directors of Silver Sun.

The officers of the Company after the closing of the Qualifying Transaction will be Michael J. Johnson, CEO and President, Ann Fehr, Vice President Finance, Tom Kordyback, CFO and Steve Mathiesen, Secretary.

Michael J. Johnson, CEO, President and Director

Michael Johnson brings extensive mining expertise to Strachan that he acquired while serving in senior management and director positions in the mining sector, and previously as a mining lawyer at a leading international law firm. Michael was the Chief Legal Officer, and previously the Vice President Legal and Corporate Secretary, at Silver Wheaton Corp., a NYSE and TSX-listed company, during a period of that company's rapid growth. He also has practised law in the areas of mergers and acquisitions, securities regulation and corporate governance. He is also a director of Silver Sun Resource Corporation. His educational credentials include a Master of Laws, specializing in securities law, obtained from Osgoode Hall Law School in Ontario. He is currently a director of Silver Sun and of Newton Gold Corp, an Exchange listed company.

Ezra Jimenez, Director

Mr. Jimenez is Vice President - Operations & CFO, Yale Resources Ltd. a TSX Venture Exchange listed Company. For the past 15 years Mr. Jimenez was a partner of a law practice based in Mexico City, where as part of his practice he assisted foreign companies in structuring multi-million dollar mergers and acquisitions. Mr. Jimenez has specialized in diverse aspects of Mexican law that includes arbitration and negotiations, environmental law, tax law, and constitutional law. He is also the CFO of Sierra Madre Developments Inc. listed on the Exchange.

Michael G. Allen, P. Geo, Director

Mr. Allen joined West Kirkland Mining on May 31, 2010 as Vice President of Exploration. Prior to joining West Kirkland, Mr. Allen worked on numerous gold, diamond and base metal projects both in Canada and internationally. He received degrees from the University of Alberta, graduating with a Bachelor of Science with Specialization in Physical Geography in 1997 and a Bachelor of Science with Specialization in Geology in 1998. Mr. Allen is a Professional Geoscientist registered with the Association of Professional Engineers and Geoscientist of British Columbia. He was previously Senior Project Geologist at Silver Standard Resources Inc. and Chief Geologist and Underground Development Manager at Redcorp Ventures.

Steve Mathiesen, Secretary and Director

Mr. Mathiesen is a business lawyer. He has been a partner with McMillan LLP (formerly Lang Michener LLP) of Vancouver since 2002. His practice includes mergers and acquisitions and financings for public and private companies and ventures involved in the technology, real estate, resource and other sectors. He is currently a director and officer of several Exchange listed companies.

Tom Kordyback, Director and CFO

Tom is a Chartered Accountant and a member of the British Columbia Institute of Chartered Accountants. He was the former Chief Financial Officer of Creo Products Inc. (Kodak), a Nasdaq and TSX-listed company, and he was most recently a director of Extreme CCTV another TSX-listed company that was sold to Bosch in 2008. Tom is currently a director and the CFO od Silver Sun.

Ann Fehr, CGA, Vice President, Finance

Ms. Fehr has 13 years of senior management experience and 4 years as a consultant. Since receiving her CGA designation in 1996, she has spent several years providing senior level accounting, financial management services and business planning services to private and publically traded companies. She has worked in the mining sector since 2007 and is well versed in the corporate governance and regulatory financial reporting for publicly traded companies. She currently holds CFO positions at Global Minerals Ltd., Mediterranean Resources Ltd, and BioWest Therapeutics.

Statements in this press release regarding the Company's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the proposed transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

ON BEHALF OF THE BOARD

STRACHAN RESOURCES LTD.

Gary Mathiesen, President

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Strachan Resources Ltd.
    Gary Mathiesen
    President
    (604) 685-2391