Bayswater and Kilgore Merging to Form Dynamic Leading Uranium Company
Mon Mar 19, 9:40 PM
Email Story IM Story Printable View VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 19, 2007) - Bayswater Uranium Corporation (TSX VENTURE: BAY.V) and Kilgore Minerals Ltd. (TSX VENTURE: KAU.V) -
Bayswater Uranium Corporation (TSX VENTURE: BAY.V) and Kilgore Minerals Ltd. (TSX VENTURE: KAU.V) are pleased to announce that they have entered into a Letter Agreement to merge. The combined corporate entity will create a major player in the uranium exploration sector highlighted by large, strategic exploration-landholdings in major uranium districts in Canada, the largest uranium producing country in the world; and by advanced uranium properties in the United States with approximately 10 million pounds of historical uranium resources having near term production potential and substantial upside for discovery and definition of additional resources as detailed below:
Average
Pounds Average % Thickness
Property U3O8 U3O8 (ft.)
--------------------- ------------ ----------- -----------
Cochrane, Montana 3,589,684 0.128 9.24
Snow, Montana 1,220,596 0.150 6.45
132,000 0.121 6.31
Mountain West, Nevada 927,400 0.153
98,000 0.140
Juniper, California 4,018,000 0.193
(Note:
Historical resources as stated above are non-compliant with National Instrument 43-101 standards, have not been verified by either company's Qualified Person, are provided for information purposes only and as such should not be relied upon. For properties in Montana, the historical resources are based on Kerr-McGee Resources Corporation's internal correspondence dated January, 1978 and are referred to as "Indicated and Inferred" based on drilling; however, the definitions used by Kerr-McGee are indeterminate except for cut-off grades and thicknesses and as such differ from resource classifications pursuant to NI 43-101. For properties in Nevada and California, the historical resources are based on undated internal memoranda of Pathfinder Mines (owned by Cogema) and are referred to as "Indicated and Inferred" based on drilling; however, the definitions used by Pathfinder are indeterminate and differ from resource classifications pursuant to NI 43-101.)
Aggressive planned exploration expenditures of approximately $20 million on Bayswater's uranium properties in Canada and Niger in 2007 should significantly advance projects towards the resource stage. Post closing of the merger, the objective is to advance Kilgore's historical uranium resources to the NI 43-101 compliant category, expand resources and to begin baseline studies, permitting and licensing in order to fast track projects to production. Kilgore is in the process of initiating these plans.
The merged corporate entity will be a dynamic leading uranium company with a balanced portfolio of exploration and advanced-stage properties. The diversified asset base provides potential for growth through discovery, resource delineation and production development. This attractive asset mix will appeal to a wider range of retail and institutional investors.
URANIUM ASSETS OF THE COMBINED COMPANY Dominant Exploration Land Positions in Canada's Premier Uranium Regions:
- Labrador, Canada - 100% interest or right to acquire 100% interest in 1.1 million acres in the Central Mineral Belt uranium district. This is by far the largest land position in the district with properties contiguous to ground held by Aurora Energy Resources Inc. (TSX: AXU.TO), Crosshair Exploration & Mining Corp. (TSX VENTURE: CXX.V) and Santoy Resources Ltd. (TSX VENTURE: SAN.V) and by the Santoy Resources Ltd./Monster Copper Ltd. (TSX VENTURE: MNS.V) and Silver Spruce Resources Inc. (TSX VENTURE: SSE.V)/Universal Uranium Ltd. (TSX VENTURE: UUL.V) joint ventures. Targets are IOCG-Olympic Dam and Rossing type deposits. A $3.2 million exploration program comprising airborne surveys and follow-up prospecting in 2006 identified numerous uranium mineralized zones which will be drill tested this year. Also, numerous targets require further prospecting. A $5.6 million exploration program is planned for 2007 to evaluate targets by ground geophysics, prospecting and mapping and by up to 20,000 metres of drilling.
- Athabasca Basin, Saskatchewan, Canada - 100% interest in 1.7 million acres in the west-central region of the Athabasca Basin east of the Cluff Lake uranium mine, which produced 62.5 million pounds U3O8, and the high grade Shea Creek uranium deposits and west of Cameco Corporation's (TSX: CCO.TO) Centennial discovery. A $4.5 million exploration program is planned for 2007 including a deep penetrating VTEM survey in order to identify favourable basement conductors, currently being carried out by Geotech Ltd., followed by targeted ground geophysics, prospecting and up to 10,000 metres of drilling.
- Thelon Basin, NWT/NU, Canada - 50% to 100% interest in 3.7 million acres representing 33% of the available ground in the basin. By far the largest landholder in the region particularly in the South Thelon Basin. Targets are high grade, unconformity-associated, Athabasca Basin type deposits. Airborne surveys in 2006 over a portion of the land holdings identified several shallow to deep favourable basement conductor anomalies in South Thelon Basin and numerous radiometric anomalies reflecting near surface targets in North Thelon Basin. An $8.1 million exploration program is planned for 2007 to identify additional favourable targets by airborne geophysical surveys and to evaluate targets by ground geophysics, prospecting and up to 10,000 metres of drilling.
- Newfoundland, Canada - 50% to 100% interest in 418,000 acres in southwest Newfoundland, covering the majority of the 100 kilometre long Hermitage Uranium Belt. Targets are primarily sediment and volcanic hosted stratiform deposits. An airborne survey over a portion of the property in 2006 identified numerous low level radiometric anomalies. Further airborne surveying is planned for 2007 with follow-up prospecting of high priority targets and drilling if warranted.
- Niger, West Africa - Applications for 100% interest or rights to acquire 100% interest in 2.0 million acres in two separate blocks of prospective uranium exploration concessions in Niger, the world's fourth largest uranium producer, are anticipated to be granted shortly. Targets are sandstone type deposits in favourable stratigraphic and structural settings similar to and in close proximity to Cogema's Arlit and Akouta Mines. Once the concessions are granted, Bayswater plans a $1.8 million program of airborne surveying and follow-up prospecting and mapping to define drill targets.
Historical Uranium Resources with Near-Term Production Potential: - Wyoming and Montana, United States - 100% interest in 285 lode claims (approximately 5,700 acres) in Carter County, Montana and Crook County, Wyoming and 2,080 acres of Wyoming State Leases situated along sandstone hosted uranium bearing roll-fronts at depths ranging from less than 800 feet to more than 1800 feet on the northern rim of the Powder River Basin-known for its roll-front uranium deposits in Wyoming. These lands cover selected areas in advanced stages of exploration, including areas of grid-type drilling, that were part of a regional program involving over 4500 drill holes by Kerr McGee Corporation, Kerr McGee/Chevron Minerals JV, Montana Nuclear, American Nuclear, Amoco, Exxon and others along a 56 mile long grouping of roll fronts in Carter County, Montana and a 26 mile long grouping of roll-fronts in Crook County, Wyoming. Extensive data has been acquired documenting much of this work by these companies. Historical resources are as stated above with associated cautionary note. Bayswater recently engaged World Industrial Minerals LLC ("WIM") of Denver, CO who have extensive experience as geologists and engineers in the exploration, development and mining of uranium, to undertake a compilation, due diligence review and assessment of the data with recommendations for further work. Historical uranium resources have been outlined and documented by these companies as a result of the previous drilling; and has been further reviewed and re-documented by WIM within the above lands. This information is currently under review. The project has considerable potential for expanding the resources. Amoco and URI, in 1979, conducted initial leach and hydrology tests on one of the deeper Montana roll-front deposits with encouraging results.
The project area occurs to the north, northeast and east of the Hauber Mine, Wyoming roll-front deposit that was mined by open cut and underground mining methods by Homestake Mining Corporation. The mine produced approximately 2.76 million pounds U3O8 at an average grade of 0.23% U3O8. The Oshoto area, Wyoming was the site of extensive uranium exploration by Nuclear Dynamics Corporation and Bethlehem Steel in the 1970's and occurs to the south of the above Kilgore lands. Successful in-situ-recovery (ISR) tests are reported to have been carried out in the Oshoto area in the late 1970's.
- Nevada, United States - 100% interest in 96 lode claims (approximately 1,920 acres) covering the Mountain West uranium project, Elko County, Nevada. Uranium mineralization occurs in an unconsolidated Tertiary stream channel underlain by granitic basement rocks. Pathfinder Mines (owned by Cogema) and its predecessor Utah Construction and Mining Co. completed 360 drill holes to depths of up to 270 feet during 1967 to 1980. This work outlined a historical resource, not compliant with NI 43-101 standards, comprising about 1.0 million pounds U3O8 with an average grade of 0.153% U3O8 in a configuration suitable for shallow open pit mining (See previous cautionary note). This resource has not been verified by Kilgore's Qualified Person and is provided for information purposes only. Kilgore is attempting to obtain the historical exploration data. This project has potential for expanding the resources.
- California, United States - 100% interest in 91 lode claims (approximately 1,820 acres) covering the Juniper uranium project, Tuolumne County, California. Uranium mineralization occurs in an unconsolidated, five mile long Tertiary stream channel underlain by granitic basement rocks. Pathfinder Mines (owned by Cogema) and its predecessor Utah Construction and Mining Co. completed 365 drill holes during 1968 to 1980. This work outlined a historical resource, not compliant with NI 43-101 standards, comprising about 4.0 million pounds U3O8 with an average grade of 0.193% U3O8 in a configuration suitable for open pit mining (See previous cautionary note). This resource has not been verified by Kilgore's Qualified Person and is provided for information purposes only. This project has potential for expanding the resources.
BASE METAL AND GOLD ASSETS OF THE COMBINED COMPANY - Avoca Base Metal Project, Ireland - 100% interest in two prospecting permits comprising 73 sq km in County Wicklow, southeast Ireland covering the historic Avoca Mine. The property covers a historically mined copper, zinc and lead sulphide stratiform volcanogenic deposit with gold and silver values. Historic resource calculations, that are not NI 43-101 compliant, have estimated the resource at 6.0 million tonnes grading 5.3% zinc and 1.9% lead. This resource has not been verified by the Company's Qualified Person and is provided for information purposes only. In 2006, a gradient array induced polarization survey was completed in five cross sectional areas to test the massive sulphide base metal system over a strike length of seven km and to depths of up to 900 metres. Both the central copper-rich zone and laterally equivalent marginal zinc-lead rich zones were tested by the survey, including extensions of high grade drill intersections at the Kilmacco zinc-lead zone in East Avoca where previous drilling intersected several high-grade intersections. One such intersection assayed 10.1% zinc, 5.7% lead, 0.48% copper, 284 gm/tonne silver and 4.52 gm/tonne gold over 8.3 metres. The induced polarization survey reflected the mined horizon and identified several laterally extensive, chargeable zones subparallel to the mined horizon, major chargeable bodies along strike to the southwest and sub-parallel to the resource area as estimated above, chargeable bodies along strike northeast of the Kilmacco zone and increased chargeabillities and greater widths of chargeable zones at depth in local zones along the length of the survey. These results indicate substantial potential to increase the zinc-lead historic resource both in East and West Avoca. As well, the results indicate potential for larger base metal systems at depth.
- Kilgore Gold Project, Idaho - 100% interest in 150 lode claims (approximately 3,000 acres) in northern, southeast Idaho. The claims cover an epithermal, large altered and mineralized gold system with associated antimony and mercury with a known resource comprising 218,000 ounces gold indicated (7,043,000 tons grading 0.031ounces per ton) and 269,000 ounces gold inferred (9,661,000 tons grading 0.028 ounces per ton). The resource calculation is based on a National Instrument 43-101 compliant technical report, dated September 2003, prepared by G. H. Raynor and Associates and Bruce H. Van Brunt. The resource is based on 197 diamond and reverse circulation drill holes totaling 126,417 feet of drilling carried out between 1983 and 1989 by Placer Dome and Echo Bay Mines. The Dog Bone Ridge area is indicated to be the center of the alteration system although the current resource occurs about 4650 feet from this zone. One hole on the Dog Bone Ridge zone intersected a 10 foot intersection averaging 0.465 ounces gold per ton within a low grade envelope averaging 0.04 ounces gold per ton over 170 feet. Recent drilling on this zone in 2006 failed to identify extensions or new important zones of gold mineralization except for one intersection of 0.051 ounces gold per ton over 41.2 feet; however, the results demonstrated widespread anomalous gold values in extensively altered favorable rocks. The geologic setting is such that the true widths of the above intersections are unknown. Further targets remain to be tested and good potential remains for expanding resources.
OTHER MAJOR ASSETS AND HIGHLIGHTS OF THE COMBINED COMPANY - A board of directors, advisory board and management team that has a highly successful track record in the natural resource business including uranium exploration and deposit discovery, capital raising and creation of shareholder value.
- Approximately $40 million in cash.
- Exceptional potential for growth.
FUNDAMENTALS The rationale driving this transaction is that the merged company will be:
1) The dominant and/or major exploration-advanced land holder in four of the most prospective and underexplored uranium exploration and development areas in the world - Central Mineral Belt, Labrador, Canada; Thelon Basin, NWT/NU, Canada; Athabasca Basin, Saskatchewan, Canada and Niger, West Africa;
2) An important landholder with substantial historical uranium resources, non compliant with NI 43-101 standards, with potential for additional resources along the north rim of the Powder River Basin in Wyoming and Montana-host to several mined and undeveloped uranium roll-front type uranium deposits;
3) The holder of two unconsolidated channel deposits with historical uranium resources, non compliant with NI 43-101 standards, in Nevada and California with potential for discovery of additional resources;
4) Able to undertake the steps necessary to effect potential near term production from some of the uranium assets; and
5) Better able to create, develop and deliver value for shareholders in view of the strengthened uranium asset base through the combined experience and ability of the management team.
DIRECTORS AND MANAGEMENT Pursuant to the planned merger, the board of directors, corporate officers and advisors of Bayswater will remain the same. Norman Burmeister, president of Kilgore Minerals Ltd., will have the right, subject to his discretion, to join the advisory board of Bayswater as a special advisor respecting Bayswater's United States operations. Mr. Burmeister is a graduate of the Colorado School of Mines in geological engineering with over 40 years experience in the mining industry. He has extensive experience in uranium exploration in the mid west and western United States. He served as chief geologist for Silver Standard Resources from 1965 to 1978 and was instrumental in the discovery of the Mill Canyon gold deposit, Elko County, Nevada which was subsequently sold to Freeport-McMoRan, and in the discovery of the Minto copper gold deposit, Yukon. He has served as the president and CEO of Kilgore since 2000 and was instrumental in assembling Kilgore's uranium and gold asset base. The directors and senior management of Bayswater are as follows:
Damien Reynolds, Chairman and Director
Damien Reynolds also currently serves as president of Longview Capital Partners Inc. (TSX VENTURE: LV.V). Longview owns an equity position in Bayswater. Mr. Reynolds has an impressive track record of over 20 years in identifying, acquiring and developing resource projects of merit around the world and also for his exceptional ability to raise capital for junior companies.
George M. Leary, M.Sc., P.Eng. President, CEO and Director
George Leary is a highly experienced exploration geologist-directly involved in the mineral resource industry since 1964; and has experience managing public companies since 1983. He has worked throughout North and South America and Russia. He has extensive experience with a wide variety of commodities and mineral deposit models and has been responsible for the discovery of a number of significant mineralized systems in B.C and the Yukon. He spent 14 years with Amax Exploration Inc. in Vancouver, B.C. and during the latter part of his tenure was in charge of base metal exploration in the Canadian cordillera. He subsequently spent 3 1/2 years with Union Oil of Canada in Calgary where he was responsible for base, precious and specialty metal exploration in Canada.
Victor Tanaka, B.Sc. P.Geo. Chief Operating Officer, Executive Vice President and Director
Vic Tanaka is a career geologist who has participated in several significant mineral discoveries. He has held senior positions in both major and junior mining companies and has broad Canadian and international experience. He has previously served as general manager of exploration for Asamera Inc., one of the original partners in the joint venture that led to the discovery of the high-grade Cigar Lake and Dawn Lake uranium deposits in the Athabasca Basin. The joint venture was also involved in laying the groundwork for the eventual discovery of the world-class McArthur River uranium deposit. McArthur River and Cigar Lake are the world's largest, high-grade uranium deposits.
Ken Armstrong, M.Sc., P.Geo. Director
Mr. Armstrong worked as a geologist with Rio Tinto from 1996 to 1997 and was involved with the development of the original resource models for the Diavik Diamond Mine, NWT. Mr. Armstrong joined Aber Resources Ltd. in 1997 and managed diamond, gold, and base metal exploration programs in Canada's north. Mr. Armstrong has been President and CEO of Strongbow Exploration Inc. (TSX VENTURE: SBW.V) since January 2005.
Gordon Davidson, B.Sc., P.Geo. Vice President Exploration
Mr. Davidson has over 20 years experience in uranium exploration and has held positions with Uravan Minerals, PNC Exploration (now JNC Exploration), Urangesellschaft (now part of Areva) and Brinex; and has had direct field experience in all of Bayswater's current Canadian projects. He is credited with having a significant role in the discovery of Areva's Andrew Lake uranium deposit in the Kiggavik Trend of North Thelon Basin, Nunavut, as well as the discovery of unconformity-type uranium mineralization in the South Thelon Basin at the Boomerang Project, currently being explored by Cameco Corporation (TSX: CCO.TO) and Uravan Minerals Inc. (TSX VENTURE: UVN.V).
ADVISORY BOARD Siegfried Muessig, PhD.
Sig Muessig is an independent senior mineral consultant with a very distinguished and successful career. He has been directly involved with some of the world's largest mineral discoveries including Australia's Jabiluka uranium deposit and Chile's world-class Escondida copper mine.
Robert Campbell, B.Sc., P. Geo.
Mr. Campbell, who conducts Strongbow Exploration's uranium exploration activities, has 18 years of uranium exploration experience. He has primarily focused on uranium deposits in the Athabasca and Thelon Basins in Canada and in Wyoming and Nebraska, USA.
Stephen Flechner, PhD.
Mr. Flechner holds a Doctorate in Law from Yale University and is the former Vice President, General Counsel and Secretary of Gold Fields Mining Corporation.
Jerry Blackwell, B.Sc. P. Geo.
Mr. Blackwell is president of Gitennes Exploration Inc. and a professional geologist with over 30 years experience including participation in uranium ventures on a world wide basis. He has published papers on uranium under the auspices of the IAEA and has worked with Gulf, Getty and Cominco on uranium projects.
PLAN OF ARRANGEMENT AND PROCESS
Kilgore and Bayswater will enter into a statutory plan of arrangement, whereby Bayswater and Kilgore will merge into a new corporation pursuant to an arrangement agreement (the "Arrangement Agreement"). Each common share or convertible security of Bayswater will be exchanged for one common share ("Merged Company Common Share") or convertible security of the merged company. Each common share or convertible security of Kilgore will be exchanged for one Merged Company Common Share or convertible security of the merged company. The current exercise price of the Kilgore and Bayswater convertible securities shall remain the same post merger. The merged company will retain the name Bayswater Uranium Corporation.
Following preparation of a fairness opinion and completion of satisfactory due diligence, the directors of each of Bayswater and Kilgore will recommend to their shareholders that they each accept the Transaction as proposed, and will assist in all reasonable ways in obtaining execution and preparation of any documents, including a joint information circular to be presented to the shareholders of each of Bayswater and Kilgore.
Norman Burmeister, who exercises direction and control over approximately 10% of the issued and outstanding capital of Kilgore, has entered into a lock-up agreement for the purpose of voting in favor of the planned transaction.
This transaction is subject to completion of satisfactory due diligence, a definitive Arrangement Agreement, shareholder approval of both companies and receipt of applicable regulatory approvals.
Bayswater and Kilgore intend that the formal due diligence process and executed Arrangement Agreement will be completed by April 30, 2007. Subject to the approval of the TSX Venture Exchange, a finder's fee of 500,000 common shares in the merged company is payable to an arm's length third party.
STATEMENTS
Mr. Damien Reynolds, Chairman of Bayswater, states that: "The proposed merger of Bayswater and Kilgore will result in an extremely strong company with an expanded base of world class uranium assets. Exceptional synergies are evident in the merger as a result of the combined land positions of the two companies-namely, the exploration-advanced strategic land positions of Bayswater and the historical uranium resource base with near term production potential of Kilgore. The merged entity will be a dynamic leading uranium company with further plans to aggressively build out its uranium assets. Significant shareholder value will continue to be added to this company going forward."
Mr. Norman Burmeister, P. Eng. President and Chief Executive Officer of Kilgore, comments that: "This transaction goes beyond a merger and amassing assets. It is a marriage of vision, opportunity, technical excellence and commitment to success: all elements being accretive to the others. The resultant entity will be a dynamic company that has achieved critical mass in the resource sector with capabilities and expertise across a broad spectrum."
George M. Leary, president of Bayswater, is the qualified person responsible for the technical information relating to Bayswater in this news release. Norman Burmeister, president of Kilgore, is the qualified person responsible for the technical information relating to Kilgore in this news release.
On behalf of the Board of:
BAYSWATER URANIUM CORPORATION George M. Leary, President
On behalf of the Board of:
KILGORE MINERALS LTD. Norman Burmeister, President
"Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Bayswater Uranium Corporation and Kilgore Minerals Ltd. should be considered highly speculative."
Warning: The Company relies upon litigation protection for "forward-looking" statements.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Contacts
George M. Leary
Bayswater Uranium Corporation
(403) 265-3775
Email: gmlminerals@shaw.ca
John Gomez
Bayswater Uranium Corporation
(604) 687-2153
Email: jgomez@bayswateruranium.com
Website: www.bayswateruranium.com
Norman Burmeister
Kilgore Minerals Ltd.
(307) 851-2127
Email: nburmeis@kilgoregold.com
Website: www.kilgoregold.com
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BAYSWATER URANIUM CORP
As the only uranium explorer to have major landholdings in each of Canada's most important producing and exploration regions - the Athabasca Basin, the Central Mineral Belt, the Thelon Basin and the Hermitage Belt - Bayswater Uranium Corp. is well positioned to be a market leader in uranium exploration. Bayswater combines the experience of its technical and managerial teams with a large, highly prospective and diverse property base. The result is a Super Junior uranium companyTM with the share liquidity and market capitalization to provide value to both the retail and institutional investor.
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COMPANY WEB PAGE
http://www.bayswateruranium.com/s/Home.asp
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SHARE STRUCTURE
[February 07, 2007]
Bayswater Uranium has a positive share structure including a significant number of shares held by institutions, and approximately eleven million dollars in working capital:
http://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00024144
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DUE DILIGENCE
Uranium getting close to $100 a pound by Sean Brodrick, 3/28/2007
http://www.investorshub.com/boards/read_msg.asp?message_id=18329983
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