Strategic Metals Ltd.

Strategic Metals Ltd.

June 07, 2006 11:57 ET

Strategic Metals Options Magnum Property

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 7, 2006) - Strategic Metals Ltd. (TSX VENTURE:SMD) is pleased to announce that it has signed an option agreement that will allow Klondike Silver Corp. to earn a 50% interest in the Magnum volcanogenic massive sulphide (VMS) prospect, located northeast of Dawson City, Yukon.

The Magnum prospect lies within a package of rocks that are a faulted extension of the Finlayson District which host numerous VMS occurrences, most notably of which are the Kudz Ze Kayah and Wolverine Deposits. The stratigraphic setting at Magnum closely resembles that of Wolverine, including distinctive magnetite-rich horizons that are present at both properties. Two main target areas identified on the Magnum property are scheduled to be diamond drilled this summer.

Under terms of the agreement, Klondike Silver can earn a 50% interest by issuing Strategic 300,000 of its shares and making exploration expenditures totalling $1 million over a three year period. Upon earn-in a joint venture will be formed. Strategic will be operator as long as it retains at least a 50% interest in the project.

With the completion of this transaction, Strategic now has 13 of its properties optioned to other companies. The optioned properties are scheduled to receive at least $3.8 million in exploration expenditures in 2006. Strategic also expects to spend about $1 million of its own funds exploring some of its other projects during 2006.

Strategic Metals Ltd. is a successful junior resource company with large property holdings hosting a wide variety of commodities. It is well funded and owns 8,425,000 shares in other junior resource companies, which it has received through its various option and sales agreements. At present Strategic Metals has approximately 25 other mineral properties available for option.


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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