News Release: Kennecott buys shares for $10 !!
WESTERN COPPER HOLDINGS LTD ("WTC T;WCOPF-L")
- Western Copper Strategic Alliance With Kennecott
Western Copper Holdings Limited ("Western"), Kennecott Canada Exploration Inc. and Minera Kennecott S.A. de C.V. ("Kennecott") are pleased to announce the purchase of a private placement of Western shares by Kennecott, the purchase of the Penasquito property from Kennecott by Western and the formation of a Strategic Alliance to explore and develop Mexican mineral properties.
1. Kennecott will subscribe for 250,000 shares of Western at $10.00 per share and will also receive 250,000 share purchase warrants exercisable for two years at $12.00 per share. Kennecott shall have the right to participate in future equity offerings by Western so as to maintain its percentage equity interest in Western Copper.
2. Western will acquire a 100% interest in the Penasquito project by paying to Kennecott its cumulative expenditures on the project, estimated at US $5.1 million. Western has the option to pay in cash or shares which shall be subject to a 12 month hold period. Please see the accompanying Appendix for details of the Penasquito project.
3. The Strategic Alliance relates to mineral properties in the States of Zacatecas and San Luis Potosi, including the Faja de Plata properties currently under option by Western from Kennecott under an existing agreement, but does not include Western's El Salvador joint venture with Teck Corporation or any Kennecott porphyry copper targets. Kennecott will transfer to Western a 100% interest in properties which it holds in the Alliance area, subject to completion of a work commitment by Western and a one time reacquisition right or a retained royalty, both held by Kennecott.
The reacquisition right will be triggered each time an individual property is deemed to have an inferred resource. Upon reacquisition, Kennecott may, at its option, elect to earn a 51% interest in any such property by making all subsequent expenditures required to take the property to a decision to mine or by spending a total of US $25 million, whichever comes first,
within a five year period.
4. Western shall expend a minimum of US$1,000,000 per year on exploration of the Alliance properties and will become vested after the first year. Western will be the operator.
5. Western will gain immediate access to Kennecott's exploration
database for the Alliance properties, at no cost, as well as to certain Kennecott exploration and support staff, at cost.
Dale Corman, Chairman and Chief Executive Officer of Western Copper, made the following statement: "This strategic alliance with Kennecott is extremely positive for Western Copper. First, we welcome Kennecott, a division of Rio Tinto, one the world's largest mining companies as a new
partner and a significant shareholder. Second, we get Penasquito, which is a terrific project, as well as other Kennecott properties that have been assembled over the past eight years. Access to the Kennecott data and technical staff gives us a "running start" which will literally save us years of work, as well as making some of the top people in the business available to Western Copper."
Penasquito Project
The Penasquito Project is located about 200 kilometers northeast of the City of Zacatecas in the Concepcion del Oro district, one of Mexico's most important mineral districts. Exploration by Minera Kennecott beginning in 1992, which included major geophysical and geochemical surveys and 71 drill holes totalling 23,495 meters, has identified one zone of possible economic mineralization at Chili Colorado, two large breccia pipes/diatremes and several outlying targets with high grade intercepts of mineralization. The entire mineralization/alteration system delineated to date covers nine square kilometers and lies beneath thirty meters of alluvium.
The Chili Colorado zone, located south of Azul breccia pipe, shows
potential for significant tonnage grading 80 g/t Ag, 0.4 g/t Au, and 2-3% combined Pb-Zn. Mineralization is open to the south and west.
Several target areas show potential for similar mineralization, some of which already have drill intersections of high grade material (+one kilogram Ag and +10% combined Pb-Zn) but lack systematic drilling.
Infrastructure is good, with electricity provided by the mainline from Fresnillo. Two railheads exist, one at Terminal and one at Concepcion del Oro. Drilling at the prospect has located a large water supply, likely to be sufficient to support a major mining operation.
TEL: (604) 684-9497 Robert Gayton
TEL: (403) 414-0829 John Campbell, Investor Relations |
