|
Eagle Plains Forms Strategic Alliance
With Billiton Plc
Cranbrook, B.C.: Eagle Plains Resources
Ltd. (EPL:ASE) announces that it has entered into
an agreement with London-based Billiton Plc
through its wholly owned subsidiary Billiton Exploration
Canada Limited, covering claims in the Findlay Creek
area located 45 km north of the Sullivan Mine in southeastern
B.C., Canada. This area is considered highly prospective
for the discovery of new zinc sedex deposits located
within the Proterozoic Aldridge Formation. The Sullivan
deposit, owned by Cominco Ltd. contained reserves of
149,000,000 tonnes grading 6.3% lead, 5.9% zinc, and
69 g/T silver and has seen continuous production for
over 100 years. The mine is scheduled for shut-down
in December, 2001.
Billiton will make an investment in Eagle Plains in
exchange for the right to option the North Findlay
and Hap properties (owned 100% by Eagle Plains) and
the
right of first refusal for future financings by the
company.
The subscription stage of the agreement involves the
purchase by Billiton of 1,125,000 Common Shares at
a price of CDN $0.40/share, of which 875,000 will be
issued
as flow-through shares. Proceeds from the above will
be $450,000, and will augment additional private-placement
proceeds of $350,000 from the proposed sale by Eagle
Plains to arm's length and non-arm's length investors
of an additional 875,000 units comprised of one $
0.40 flow-through common share and one Series A warrant
(exercisable
for one year at $0.55/share, and for a second year
at $0.75/share), for a total financing of CDN $800,000.
1,125,000 Series A warrants will also be made available
to Billiton in addition to 1,000,000 Series B warrants
exercisable at $0.75 for a period of 36 months, with
Series B warrants conditional upon Billiton entering
into an option on the above-mentioned properties.
Partial
funding from the financing will be used by Eagle Plains,
as operator, to carry out a $350,000 diamond drilling
program on the North Findlay property during 1999.
The second stage will involve the right of Billiton
to enter into an option agreement whereby Billiton
may earn a 50% interest in the Hap and North Findlay
properties
by spending $2,000,000 on exploration over four years.
Billiton may secure another 20% interest (for an aggregate
70% interest) by providing Eagle Plains with project
financing to the start of commercial production from
the property.
Commenting on the agreement, David Whitehead, Billiton's
Chief Executive, Exploration and Development said, "Following
last month's announcement of the restructuring of our
Exploration and Development Division, this deal is an
important confirmation of our intention to work very
much more closely with independent resource companies
and is reflective of the new approach that Billiton
will take in the exploration business. We welcome the
opportunity to work with Eagle Plains who recognised
in 1995 the potential of the area to host a significant
zinc sedex deposit of the Sullivan type, and we look
forward to the commencement of the drilling programme
during the summer".
The issuance price for the above financing was determined
by current market conditions and through negotiation
between Eagle Plains and Billiton. Completion of the
proposed private placement is subject to the company
receiving all required regulatory approvals. The Alberta
Stock Exchange requires that a formal application
be filed by the company within 14 days of this news
release.
On Behalf of the Board of Directors
Tim J. Termuende, P.Geo.
President and CEO
|
