UC Resources Ltd.
TSX VENTURE : UC

UC Resources Ltd.

March 07, 2007 15:20 ET

UC Resources Ltd. and Spider Resources Inc. Team Up to Explore McFauld's VMS Project in Northern Ontario

TORONTO, ONTARIO--(CCNMatthews - March 7, 2007) - Spider Resources Inc. ("Spider") (TSX VENTURE:SPQ) and UC Resources Limited ("UC") (TSX VENTURE:UC) announce the signing of a Letter of Intent (LOI), regarding a four year exploration program on the McFauld's Lake volcanic-hosted massive sulphide ("VMS") project, located in northern Ontario in the James Bay Lowlands, held by Spider and its joint venture partner, KWG Resources Inc. This LOI confirms the terms and conditions on which UC will have an option to earn-in to an up to 55% undivided interest in the McFauld's Lake project, which is currently owned, as to an undivided 50% interest, by each of Spider and KWG.

The UC Option: Subject to the terms and conditions set out in the LOI, UC shall be the operator of the property during the term of the option and shall have the option to earn up to a 55% undivided interest in the Property as follows:

On or prior to the first anniversary date of the signing of the agreement, UC shall incur exploration expenditures, of at least $1 million on the Property in order to earn a 10% vested interest in the Property;

If UC gives notice to Spider of its intent to continue the option for a second year, it shall be required to incur exploration expenditures of at least an additional $1 million on or before the second anniversary date in order to earn an additional 15% vested interest in the Property, bringing UC's interest level to 25%;

On or prior to the second anniversary date hereof, UC shall give notice to Spider of its intent to continue the option for a third year, in which case it shall be required to incur exploration expenditures of at least an additional $1.25 million on or before the third anniversary date hereof in order to earn an additional 15% vested interest in the Property bringing the UC interest level to 40%;

On or prior to the third anniversary date, UC shall give notice to Spider of its intent to continue the option for a fourth year, in which case it shall be required to incur exploration expenditures of at least an additional $1.25 million on or before the fourth anniversary date in order to earn an additional 15% vested interest in the Property bringing the UC interest level to 55%;

In the event that UC fails to give notice of its intent to continue the option as required by any of the earn-in stages, UC shall be deemed to have elected not to continue with the option, and shall have earned the corresponding interest to the level of investment contemplated in the completed stage, provided however, that no partial interest shall be earned in respect of any requirement for expenditure in any of the stages, that has not been met in its entirety, within the required time period, and more particularly:

If UC does not expend at least $1 million in accordance with the initial stage, it shall be deemed to have earned no interest in the Property;

If UC earns a 10% interest, and elects not to proceed with the option, it's interest maybe repurchased by Spider (66%) and KWG (33%) for an amount to be agreed by the parties, acting reasonably, other wise the parties shall immediately enter into a formal joint venture agreement, which shall provide, among other things, that Spider shall be entitled to contribute such further amounts as may be required to take its interest relative only to KWG, up to 66%, prior to KWG being entitled to contribute amounts to the joint venture, and otherwise shall contain standard provisions commonly found in joint venture agreements in the industry.

The McFauld's Lake VMS project was initially discovered in 2002, while Spider, KWG and De Beers Canada Exploration Inc. in joint venture were exploring the project area for kimberlites. De Beers holds a 1.5% net smelter royalty on the project, 0.5% of which can be purchased from De Beers by Spider and KWG for $1.5 million. To date, 10 isolated VMS occurrences have been identified and drill tested on the project, two of which have undergone detail drilling. UC plans to continue exploring this new VMS camp. Immediate plans involve the completion of deep geophysics on McFaulds #3 and #1 to identify drill targets below and in the vicinity of these two partially drilled off VMS (Copper and Zinc) occurrences.

States Richard J. Hamelin, President & CEO of UC Resources: "As a resident of Mexico, I have focused UC Resources on building up one of the largest land packages of any Canadian silver and gold mining company in Mexico, and acquiring Mexican silver and gold quick-to-production assets. My long-term business relationships in Mexico have provided UC with a unique opportunity to gain access to attractive acquisitions. My long-term relationship with Spider Resources, as well, has provided UC with this opportunity to participate in a very exciting project, which I believe has the potential to add significant shareholder value."

UC Resources is a Canadian exploration, development and production company which has an opportunity-driven acquisition strategy. In addition to the Canadian McFauld's Lake volcanic-hosted massive sulphide ("VMS") project, it has several other projects, all in Mexico. The Company currently has a 1,500 sq. km. land package at its flagship Copalquin exploration property, located in Mexico's prolific Sierra Madres, and two production acquisitions, with an LOI on a third production asset.

On behalf of the board of directors,

Richard J. Hamelin, President/Director

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings what are available at www.sedar.com.

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

Contact Information

  • UC Resources Ltd.
    Vancouver Head Office
    (604) 681-7265 or Toll Free: 1-800-366-8566 (Canada & USA)
    (604) 608-6163
    Website: www.ucresources.net