Eagle Plains/Providence Capital Execute Option Agreement on Iron Range Project, South-eastern British Columbia

Cranbrook, B.C., 18 May, 2010: Eagle Plains Resources Ltd. (EPL:TSX-V) (or “Eagle Plains”) and Providence Capital Corp. (TSX-V:PV) (or “Providence”) have entered into an option agreement, on Eagle Plains’ 100% owned Iron Range project located in the Goat River area 15km NE of Creston, B.C. Under the terms of the agreement, Providence may earn a 60% interest in the property by completing $3,000,000 in exploration expenditures, making $500,000 in cash payments and issuing 1,000,000 shares to Eagle Plains over 4 years. Upon Providence exercising its option, a 60/40 Joint Venture between Providence and Eagle Plains will be established. The option agreement and Providence’s proposed share issuances under the agreement are subject to TSX Venture Exchange approval.

The Iron Range property consists of 20,000 hectares owned 100% by Eagle Plains and has no underlying royalties or encumbrances. The claims are well-situated with respect to infrastructure with a high-pressure gas pipeline, high-voltage hydroelectric line, railway and major highway all located within property boundaries. 

The Iron Mountain structure has been mapped with widths of up to 150m and a strike length of over 50km. Claims held by Eagle Plains cover over 25km of the structure, with significant iron-oxide mineralization occurring over 15km. Copper and gold mineralization have recently been discovered along the structure, highlighting the potential for iron-oxide copper-gold (“IOCG”) mineralized systems associated with the structure. The claims also overlie rocks of the Aldridge Formation, including the same stratigraphic time horizon which hosts the world-class Sullivan Deposit located 70km to the northeast. Over its 100 year lifetime, Sullivan produced approximately 150,000,000 tonnes of ore including 300,000,000 ounces of silver, 8,000,000 tonnes of zinc and 8,000,000 tonnes of lead, collectively worth over $25 billion at current metal prices. The parties caution that past results or discoveries on proximate land are not necessarily indicative of the results that may be achieved on the Iron Range property.

A map outlining pertinent details of the property may be found here: 

Property History

The Iron Range deposits were originally staked in 1897 and were covered by Crown Grants held by Cominco Ltd. and the Canadian Pacific Railway. Past work on the Iron Range deposits by Cominco focused on the considerable iron oxide resource with trenching and very shallow (20m depth) diamond drilling along the Iron Range Mountain ridge. Eagle Plains staked the current claims immediately after the Crown Grants reverted in 2000 and have been exploring the property since then. Exploration work to date includes geological mapping, geochemical surveys, diamond drilling and a 690 line-km airborne geophysical survey.

Eagle Plains completed diamond drilling programs in 2005 and 2008, testing for base-metal mineralization. A number of holes from these programs intersected gold mineralization, including drill hole IR08006, which returned 7.0m grading 51.52 g/t (1.50 oz/ton) gold from 20.0m to 27.0m.

Swift Resources optioned the property in late 2009 and completed a total of 580 m of drilling in 7 holes. One hole was drilled in close proximity to IR 08006 and returned 1.0m grading 7.53 g/t gold. (See News release dated March 5th, 2010).

Eagle Plains and Providence plan to complete a $200,000 exploration program during the 2010 field season, which will include drill-testing of a prominent geophysical anomaly associated with a Sullivan-type target.

Financing

Providence has arranged a non-brokered private placement that consists of 2 million flow-through units to be issued at a price of $0.075 per unit. Each flow-through unit comprises one flow-through common share and one warrant. Each warrant is exercisable into one common share at a price of $0.15 for two years. Providence may pay finder fees as outlined in the TSX Venture Exchange policy. The private placement is subject to TSX Venture Exchange acceptance, and all securities shall be subject to a four-month hold period.

About Eagle Plains

Eagle Plains continues to conduct research, acquire and explore metal projects throughout western Canada. In addition to holding mining royalties on various projects, Eagle Plains controls over 35 gold, base-metal and uranium projects, several with third parties including Excelsior Mining Corp (TSX:MIN.P), Sandstorm Resources Ltd. (TSX-V:SSL), Sandstorm Metals and Energy Ltd. (TSX-V:SND), Parkside Resources Inc., Waterloo Resources Ltd. (TSX-V:WAT.P), Prize Mining Corp. (TSX-V:PRZ), Windstorm Resources Inc., Heemskirk Canada Ltd., Touchdown Capital Inc. (TSX-V: TDW) and 99 Capital Corp. (TSX-V:WDG). In recent years, Eagle Plains has completed option agreements with Teck Limited (TSX:TCK.B), Alexco Resource Corp. (TSX-V:AXR), Billiton Metals, Rio Algom Exploration, NovaGold Resources, Kennecott Exploration and numerous other junior exploration companies, resulting in over 53,600m (163,370’) of drilling and over $28.3 million in exploration spending on its projects since 1998. 

Expenditures during 2008 and 2009 on Eagle Plains’ projects were approximately $7,300,000, funded by Eagle Plains and third party partners. This work resulted in approximately 6,900m of drilling and extensive ground-based exploration work and facilitated the advancement of numerous projects at various stages of development.

About Providence

Providence is an exploration company engaged in evaluating, advancing and investing in early stage resource projects. Providence is currently working on an option agreement to acquire 60% interest in the gold prospective Kanweaken project in the Republic of Liberia, Africa, but continues to evaluate other prospective projects both in North American and internationally to build its property portfolio.


This news release has been reviewed and approved by Tim J. Termuende, P.Geo., hereby designated as a qualified person under National Instrument 43-101.

On behalf of the board of Directors                         On behalf of the board of Directors
of Eagle Plains                                                            of Providence

Signed,                                                                        Signed,

“Tim J. Termuende”                                                  "Steve Bajic"
President and CEO                                                    President and CEO                                                                     

 

For further information on EPL, please contact Mike Labach at 1 866 HUNT ORE (486 8673)
Email: mgl@eagleplains.com or visit our website at http://www.eagleplains.com

 

Cautionary Note Regarding Forward-Looking Statements

Neither the 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 this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.