Westcore Energy Ltd.

October 19, 2010 18:15 ET

Westcore Announces Completion of Acquisition of Manitoba Coal Permits from 49 North

CALGARY, ALBERTA--(Marketwire - Oct. 19, 2010) - Westcore Energy Ltd. (TSX VENTURE:WTR) ("Westcore" or the "Corporation") is pleased to report that it has completed its previously announced acquisition of interests in Manitoba Quarry Exploration Permits (see the Corporation's news release dated April 22, 2010) in respect of an aggregate of 10,273 hectares of lands that are immediately adjacent to the Corporation's Manitoba properties from 49 North Resources Inc. ("49 North"). Westcore has acquired a 50% interest in five Permits that have been granted by the Mines Branch of Manitoba Innovation, Energy and Mines, together with all rights attaching to them (collectively, the "Assets"). Under its agreement with 49 North, Westcore can increase this interest to as much as 80%. The consideration payable under this agreement consists of the issuance of an aggregate of 1,000,000 common shares in the capital of Westcore to 49 North and a cash portion payable in the amount of $256,825. The foregoing common shares are subject to hold periods under applicable securities laws.

Under the agreement, Westcore will operate all exploration and drilling activities in respect of the Assets and will bear responsibility for all exploration expenditures and related costs until such time as a bankable feasibility study is completed.

Westcore is obliged to expend not less than $500,000 on exploration expenses in respect of these properties during its 2010 – 2011 exploration program and will earn additional interests in these Assets based upon the following:

  1. Upon payment of exploration expenditures in excess of $1,000,000, Westcore will earn a further 10% interest in the Assets;
  2. Upon completion of a bankable feasibility study in respect of the Assets, Westcore will earn a further 20% interest in the Assets, following which the parties will share subsequent exploration expenditures and related costs in proportion to their ownership interests.

The interests acquired from 49 North are in respect of properties that are located immediately east of Westcore's Black Diamond Property. Although no historical drilling has been conducted within the property boundary, the area is mapped as being underlain by the Mannville Formation. This is the same unit that hosts all the recent coal discoveries made by a number of companies in both Saskatchewan and Manitoba since Goldsource Mines Inc. made their initial coal discovery in 2008 (see Goldsource news release dated April 22, 2008). There is a high potential for coal to exist on the 49 North property due to its proximity to Westcore's Black Diamond property, where 4 new discoveries have been made in the past 18 months (see Westcore news releases dated April 9, 2009, and March 22, 2010). The Westcore discoveries occur as a string of deposits running north-south along the eastern border of the property (see Figure 1), and there is evidence from Westcore's airborne geophysical data that at least one of their undrilled targets straddles the boundary separating the two properties. Westcore has also had an opportunity to review an airborne geophysical study that 49 North conducted in 2009. Based upon this review and having regard to its own results and discoveries on its Black Diamond Property, Westcore is very encouraged about the prospects of further discoveries on the properties acquired from 49 North. It is believed that any coal deposits discovered on the properties acquired from 49 North have the potential of occurring even closer to surface than Westcore's other deposits, due to what appears to be a regional trend of shallowing of the Mannville Formation and a thinning of glacial overburden from west to east.

Paul Conroy, President and CEO, states: "Westcore is extremely pleased to have completed the acquisition of these permits. We are looking forward to having these prime targets drilled during our 2010 – 2011 winter drilling program and further developing and proving up this entire area play."

As 49 North currently holds in excess of 10% of the outstanding voting securities of Westcore, it is considered to be an "Insider" and a "Non-Arm's Length Party" vis-à-vis Westcore. Accordingly, this transaction is considered to be a "related party transaction". Disinterested shareholder approval in respect of this transaction was obtained at Westcore's annual and special meeting of shareholders held on July 29, 2010.

Ellen MacNeill, Professional Geoscientist in the Province of Saskatchewan and Qualified Person for this news release, has reviewed and approved its contents.

Forward Looking Statements

Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

To view the map associated with this press release, please visit: http://media3.marketwire.com/docs/1019wtr_map.pdf

Neither 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 the release.

Contact Information

  • Westcore Energy Ltd.
    Paul Conroy
    President and Chief Executive Officer
    (403) 697-4005
    (403) 263-0271 (FAX)