Press Release Source: U.S. Energy Corp.
U.S. Energy Corp. and Crested Corp. Announce That They Have Settled Inter-Company Debt With Sutter Gold
Monday March 19, 7:14 pm ET
RIVERTON, Wyo., March 19 /PRNewswire-FirstCall/ -- U.S. Energy Corp. (USE) (Nasdaq: USEG - News) and Crested Corp. (OTC Bulletin Board: CBAG - News), natural resource exploration and development companies, announced the conversion of $2,025,702 in amounts due to the companies into 7,621,867 common shares of Sutter Gold Mining Inc. (TSX-VX: SGM) at Cdn$.31 per share. These common shares will be subject to a four-month hold period. The conversion of the long outstanding amounts will help to prepare Sutter Gold for future financings as it advances its gold projects in the U.S. and Mexico. The settlement is subject to the approval of the TSX Venture Exchange. As a result of this transaction, USE now holds (on a consolidated basis with Crested) approximately 56% of Sutter Gold.
In addition, the companies agreed to cancel the $4.6 million Contingent Stock Purchase Warrant they hold to purchase common stock in Sutter Gold, by Sutter Gold issuing to the companies a Net Profits Interest Royalty ("NPIR") of 5% on its Lincoln Project in the historic Mother Lode, until the total amount is repaid, and a 1% NPIR thereafter.
Subject to the Companies closing the sxr Uranium One transaction, USE and Crested have agreed to provide a revolving US$1 million line of credit ($500,000 from each Company) to Sutter Gold at 12% interest. USE and Crested have the sole option to have Sutter Gold repay the debt in cash or common shares should the facility be utilized by Sutter Gold.
Keith Larsen, CEO for U.S. Energy Corp. and Co-Chairman of Crested Corp. states that "Sutter Gold is now debt free and can concentrate on developing their valuable gold resources in the historic Mother Lode. The success of the continuing core drill program enhances the project's value and probability for gold production."
Hal Herron, President of Sutter Gold, commented that "this is one more step in moving the Sutter Gold Lincoln Project ahead. Over the past 12 months we have raised funds which are being spent on our large drill program, and recently, the engagement of Behre Dolbear to complete a pre-feasibility study on the project. With this settlement, Sutter Gold has a debt free balance sheet which will give our shareholders and investors more confidence in the value of Sutter."
About the Sutter Gold Mine
The Sutter Gold project contains a 3.2-mile segment of the Mother Lode belt from which 10 historic mines produced 2.3 million ounces of gold. The historic mines bracket a one-mile-long portion of the Mother Lode belt with no historic gold production that contains the Lincoln and Comet zones. The Lincoln and Comet zones were "blind" discoveries that did not outcrop at surface and represent the first significant new gold discoveries made along the Mother Lode belt in the last 50 years. A total of 85,085 feet of drilling has been accomplished in 190 diamond drill holes, and modern underground development consists of a 2,850-foot declined ramp with 2,400 feet of crosscuts and five raises. The project has received all of the major permits required for production. The historic gold production was documented in a detailed report completed by Mark Payne, the consulting geologist to Sutter Gold.
U. S. Energy Corp. is a large shareholder of SGM.
For additional information on U. S. Energy Corp., please visit:
www.usnrg.com.
Disclosure Regarding Mineral Resources
Under SEC and Canadian Regulations; And Forward-Looking Statements
The Company owns or may come to own stock in companies which are traded on foreign exchanges, and may have agreements with some of these companies to acquire and/or develop the Company's mineral properties. Examples of these other companies are Sutter Gold Mining Inc., Uranium Power Corp., sxr Uranium One, and Kobex Resources Ltd. These other companies are subject to the reporting requirements of other jurisdictions.
United States residents are cautioned that some of the information available about our mineral properties, which is reported by the other companies in foreign jurisdictions, may be materially different from what the Company is permitted to disclose in the United States.
This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this release.
For further information on the differences between the reporting limitations of the United States, compared to reports filed in foreign jurisdictions, and also concerning forward-looking statements, please see the Company's Form 10-K ("Disclosure Regarding Forward-Looking Statements"; "Disclosure Regarding Mineral Resources under SEC and Canadian Regulation," and "Risk Factors"); and similar disclosures in the Company's Forms 10-Q.
Source: U.S. Energy Corp.
