Strategic Metals Ltd.

Strategic Metals Ltd.

August 16, 2007 19:11 ET

Strategic Metals Ltd. Announces Three Drills Now Working on Northern Dancer

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 16, 2007) - Strategic Metals Ltd. (TSX VENTURE:SMD) announces that three drills are now working its Northern Dancer property in southern Yukon. This property is under option to Largo Resources Ltd., which can earn an initial 70% interest by making a total of $5 million of acceptable exploration expenditures and issuing Strategic Metals another 1 million Largo shares (3 million shares have already been received). Upon earn-in, Strategic will hold a 30% working interest and a 1% net smelter return royalty. Largo has the further optional right to purchase the 30% working interest for $5 million, which would leave Strategic Metals with the royalty interest. For the record, Largo's news release dated August 16, 2007 is reproduced below.

"Kluane Drilling Ltd. of Whitehorse has mobilized two diamond drill rigs to Largo Resources Ltd.'s 1,500-hectare Northern Dancer tungsten-molybdenum property which straddles the Yukon-British Colombia border 290 kilometres east of Whitehorse, Yukon. The project lies 115 kilometres east of Adanac Moly Corp.'s Ruby Creek porphyry molybdenum deposit.

Largo has increased its drilling program to include three drills in order to complete the necessary infill drilling to upgrade the resource in the deposit and to further delineate the higher-grade tungsten and molybdenum zones. Preliminary pit modelling was done in order to help focus and maximize the effectiveness of the drill program. To date three holes (totalling 1,500 metres (m) of drilling) have been completed with assay results pending.

Northern Dancer hosts widespread tungsten-molybdenum (WO3-MoS2) porphyry-style mineralization, the core of which has been partially delineated by 68 diamond drill holes and 496 metres of underground workings. This work was done by AMAX Minerals Exploration from 1977 to 1980 and by Largo Resources which completed a 17-hole diamond drill program in 2006. On April 2, 2007, in Stockwatch news Largo announced a National Instrument (NI) 43-101-compliant inferred resource of 242.0 million tonnes grading 0.10 per cent WO3 (tungsten oxide) and 0.047 per cent MoS2 (molybdenum disulphide) containing 508.1 million pounds WO3 and 151.0 million pounds Mo confirming Northern Dancer as one of the largest tungsten-molybdenum deposits in the world. This resource includes a higher-grade Mo zone of 36.8 million tonnes of 0.085 per cent MoS2; more drilling is required to define a higher-grade tungsten resource.

Andy Campbell, vice-president, exploration, commented: "A major focus of the current minimum 25-hole 5,000-metre drill program is to define the full extent of the higher-grade tungsten and molybdenum zones intersected in the 2006 program. This will be done through a series of angled drill hole fences across the deposit to test the higher-grade zones. Historical drill holes were vertical to subvertical and hence did not adequately test the typically steeply dipping quartz-scheelite veins with which higher tungsten grades are associated. Our work indicates that major structures may have controlled the distribution of mineralization, especially tungsten, more than previously thought and these structures will be tested in the current drill program."

Channel sampling using diamond saws has been done along a ridge where the sheeted quartz scheelite veins are exposed. This mineralization, which is located 300 metres southwest of the previously drilled area, appears to be the southern continuation of the deposit. Results from this sampling should be available in about two weeks.

The Northern Dancer deposit is one of the world's largest known tungsten-molybdenum porphyry systems. The mineralization is hosted in fractures and veins associated with a northeast-trending sheeted vein system in calc-silicate (skarn) rocks and spatially related to a felsic intrusion (quartz-feldspar porphyry). The deposit, which has been tested by drilling for 750 metres along strike, 500 metres vertically and 600 metres in width, remains open along strike to both the northeast and southwest as well as at depth.

Tungsten and molybdenum mineralization are concentrated in two zones which partially overlap. In the core of the deposit, there is a higher-grade molybdenum zone where molybdenite occurs within and adjacent to the felsic intrusion. Surrounding and partially overlapping the molybdenum zone is a much more extensive tungsten zone where scheelite occurs in northeast-trending sheeted quartz veins in skarn.

Analytical work is carried out by Acme Analytical Laboratories Ltd. in Vancouver, B.C., an ISO 9001-2000-certified laboratory. The samples are crushed to 70-per-cent passing 10 mesh, split to 250 grams and pulverized to 95-per-cent passing 150 mesh. A five-gram split is analyzed for Mo and W using a phosphoric acid leach followed by ICP-emission spectrometry. Then a second five-gram split is analyzed for 36 elements by ICP-mass spectrometry using a hot (95-degree centigrade) aqua regia leach. Routine check assays are performed at SGS Minerals in Lakefield, Ont., on sample rejects. Largo employs a systematic QA/QC (quality assurance/quality control) program including standards, duplicates and blanks. Mr. Campbell, PGeo, Largo's vice-president of exploration, is the qualified person responsible for the scientific and technical work for the program as defined under National Instrument 43-101, and has reviewed this news release."

Strategic Metals Ltd. is a project-generating mineral exploration company with an attractive exploration portfolio comprising more than 50 properties. It currently has over 15 properties optioned out and holds royalty interests in five other projects. It has a strong balance sheet with approximately $15 million in working capital plus several million dollars worth of marketable securities in other companies.


Robert C. Carne, President

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release.

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