Eagle Plains/Active Growth Capital sign Letter of Intent for Bohan Property, southeastern British Columbia
Cranbrook, B.C., September 10th, 2010: Eagle Plains Resources Ltd (TSX-V:EPL) and Active Growth Capital Inc. (TSX-V:ACK.P) have entered into a Letter of Intent dated August 31, 2010 ("LOI") whereby ACK will be acquiring from Eagle Plains a 100% right, title and interest in the Bohan property (the "Property") located near Creston in southwestern British Columbia.
As consideration for the acquisition, the Company has agreed to issue 2,000,000 common shares to Eagle Plains, to be held in escrow pursuant to the Exchange policies. Of the total share consideration, it is expected that 10% (or 200,000 shares) will be released from escrow upon issuance of the Final Exchange Bulletin in respect of the Qualifying Transaction and the remainder will be released from escrow in increments of 300,000 shares every 6 months thereafter. On behalf of the Company, TerraLogic Exploration Inc. ("TerraLogic"), a subsidiary of Eagle Plains, will be contracted to conduct an exploration work program on the Property estimated to cost $200,000.
Pursuant to the LOI, Eagle Plains has the right to re-purchase a 50% ownership interest in the Property from the Company at any time after the second anniversary of the Qualifying Transaction, and extending up to the fourth anniversary of the Qualifying Transaction, at the Company’s aggregate acquisition cost plus a premium of 150%. The re-acquisition price, if applicable, would be payable in cash. In the event that the Company wishes to sell the Property, Eagle Plains will have the right of first refusal to acquire it.
In the event that the Property is put into commercial production and Eagle Plains has not exercised its' right to re-purchase an ownership interest in the Property as described above, then Eagle Plains will receive a 1% net smelter returns ("NSR") royalty. The 1% NSR royalty is only payable to Eagle Plains if Eagle Plains has no ownership interest in the Property. In the event that Eagle Plains wishes to sell the 1% NSR royalty, then the Company will have the right of first refusal to acquire it.
Closing of the acquisition is subject to negotiation of a definitive agreement between the Company and Eagle Plains as well as the acceptance for filing by the Exchange.
The Bohan project is located 20km northeast of Creston, southeastern British Columbia. The 7,900ha property is road-accessible and favorably located with respect to hydro electric power and rail transportation infrastructure.
The property hosts the Wilds Creek sedimentary exhalative (“sedex”) type base-metal deposit, an historic (non-43-101 compliant) resource reported by Aho (1964) and published by the B.C. Geological Survey consisting of 136,000 tonnes grading 6% zinc (though these estimates are considered to be relevant, their reliability has not been confirmed, but will constitute a target basis for future exploration work). Other target areas on the property are considered to have good potential to host additional sedex-type base-metal mineralization.
Drilling completed in 1990 and 1992 by previous operators returned values ranging from no significant results to 2.6m grading 10.2% Zn (L90-1); 3.1m grading 3.44% Zn (L92-8), 2.3m grading 9.94% Zn (L92-9) and 3.1m grading 3.55% Zn (L92-10). The property overlies approximately 12km of favourable stratigraphy and contains numerous untested prominent soil geochemical anomalies along its projected strike.
Eagle Plains acquired the property by staking in 1999 and in subsequent years, completed airborne geophysical surveys, geological mapping, soil and stream-sediment geochemical surveys and limited diamond drilling.
The most recent work on the property was carried out by Eagle Plains in 2008, which completed a soil geochemical survey followed by a 3 hole, 370m diamond drilling program designed to test for both manto-type and sedex mineralization. These holes failed to reach target depth, but mineralization consisting of fine-grained sphalerite, galena and minor chalcocite was identified in two of three holes.
Additional work is recommended for the Property, including soil geochemical surveys and additional diamond drilling.
About Eagle Plains Resources
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), Providence Capital Corp., 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.
Technical aspects of this news release have been reviewed and approved by T.J. Termuende, P.Geo., hereby designated as a qualified person under National Instrument 43-101.
On behalf of the Board of Directors
“Tim J. Termuende”
President and CEO
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.