WSR Gold Inc.

WSR Gold Inc.

June 06, 2008 17:19 ET

WSR Gold Inc. Announces an Option From Golden Valley Mines Ltd. to Acquire a Combined 35% Interest in the Golden Valley Property Located in the Lowland Region of James Bay, Ontario

TORONTO, ONTARIO--(Marketwire - June 6, 2008) - WSR Gold Inc. (TSX VENTURE:WSR) ("WSR") is pleased to announce the grant of an option from Golden Valley Mines Ltd. ("Golden Valley") to WSR and Noront Resources Ltd. ("Noront") to acquire an aggregate 70% legal and beneficial interest (the "Option") in the Golden Valley property located in the lowland region of James Bay, Ontario (the "Property").

In order to acquire its 35% interests in the Property, WSR will be required to make payments to Golden Valley totaling $175,000 (or $350,000 in the aggregate with the payments from Noront), payable in cash and/or by the issuance of common shares of WSR (and Noront) upon the later of the execution of a definitive option agreement, or the receipt of approval from the TSX Venture Exchange. The number of shares, if any, to be issued by WSR (and Noront) as consideration for the Option will be equal to the dollar amount of the total consideration that Golden Valley elects to receive in shares divided by the ten day volume weighted average price of such shares for the ten trading day period immediately preceding the date on which a press release is issued announcing a definitive option agreement amongst WSR, Noront and Golden Valley. In addition to these payments, WSR and Noront will also be required to incur aggregate exploration expenditures on the Property of at least $5,000,000 over a three year period (of which $1,000,000 must be expended in the first year).

Upon WSR and Noront earning their collective 70% interest in the Property, WSR, Noront and Golden Valley shall enter into a joint venture agreement. The Joint Venture Agreement will require WSR and Noront to fund all project costs up to the start of commercial production from the Property. Following the commencement of commercial production, any cash flow after payment of operating expenses and third party financing costs will be distributed to Noront and WSR until such time as the aggregate of their project costs, including interest, up to the commencement of commercial production have been repaid, following which such cash flow shall be distributed to the parties on a pro rata basis.

The transaction remains subject to the approval of the TSX Venture Exchange and execution of the definitive option agreement.

The Luc Bourdon Prospect surrounds the recently announce Volcanic Derived Sulphides (VDS) to the north, east and south (see press release dated June 4, 2008).

Peter's Mine

WSR has decided not to proceed with the option to earn 50% of the Peter's Mine Project from Guyana Goldfield's Inc (TSX:GUY) granted November, 2006.

With WSR recent success in James Bay, Ontario (see press release dated May 22, 2008 and June 4, 2008) management has decided to focus its efforts and funds to its James Bay options.

About WSR

WSR is a Canadian based mineral exploration company with extensive property holdings strategically located on and around the nickel/copper "Ring of Fire" in northern Ontario near James Bay.

WSR can earn a 50% interest in the McFauld's Lake Property pursuant to an option agreement with Noront Resources Ltd. (TSX VENTURE:NOT) (see press release dated November 1, 2007). The area will include 15 Claim Blocks, approximately 4,400 hectares (9,600 acres) in the Ring of Fire, McFauld's Lake, Ontario near Noront's prolific nickel copper and platinum group metals discovery.

WSR has agreed to acquire a 75% interest in the Big Mac Property from MacDonald Mines Exploration Ltd. (TSX VENTURE:BMK) consisting of 51 Claim Blocks, approximately 27,660 acres (see press release dated February 15, 2008).

WSR has entered into an agreement with Metalex Ventures Ltd. (TSX VENTURE:MTX) and Arctic Star Diamond Corp. whereby WSR the right to fund a maximum of $20.0 million in expenditures on the James Bay Properties Property over a 4 year period to earn a maximum 50% interest. The James Bay Properties comprise approximately 214.4 square kilometers (52,980 acres) (see press release dated March 26, 2008).

Forward looking statements: Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of WSR, including but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the unavailability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and as such, undue reliance should not be placed on forward-looking statements.

Shares Outstanding: 111,515,983

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

Contact Information

  • WSR Gold Inc.
    John Tait
    President and Chief Executive Officer
    (416) 628-5905