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Gold/Mining/Energy : Montello Resources -- Ignore unavailable to you. Want to Upgrade?

To: zedex who wrote (2339)	9/14/1998 7:35:00 PM
From: violetta martinez	Read Replies (1) \| Respond to of 4256

Something for the BBQ.., MONTELLO RESOURCES LTD. Suite 1473, Three Bentall Centre 595 Burrard Street Vancouver, British Columbia V7X 1C4 Tel: (604) 689-1799 Fax: (604) 689-8199 ASE SYMBOL: MEO.Y U.S. 12g # 82-1812REDWOOD RESOURCES LTD. 1500, 300-5th Avenue S.W. Calgary, Alberta T2P 3C8 Tel: (403) 266-6261 Fax: (403) 261-7836 ASE SYMBOL: RDW.Y September 8, 1998 JOINT NEWS RELEASE Montello and Redwood Sign Legend Block Option Agreement With Kennecott Montello Resources Ltd. ("Montello") and Redwood Resources Ltd. ("Redwood") announce that the signing has taken place of the formal Legend Property Option Agreement with Kennecott Canada Exploration, Inc. ("Kennecott"). The option agreement will entitle Kennecott to earn a 60% interest in the Legend Property (70% Montello/30% Redwood) located in the province of Alberta. The Legend Property consists of approximately 1.5 million acres and is located 55 km to the northeast of the latest Ashton kimberlite pipes. All payments and private placements shall be divided 70% to Montello and 30% to Redwood. Redwood has waived its right to earn an additional 20% interest in the Legend Property. As previously announced on July 24, 1998, pursuant to the terms of the option agreement, Kennecott must make private placements in Montello and Redwood of the cumulative amount of $275,000 on closing. The initial private placement of $275,000 shall be for 256,666 units of Montello at a price of CDN$0.75 per unit and 55,000 units of Redwood at a price of $1.50 per unit. The warrants attached to the units shall be exercisable at $1.50 for Montello and $3.00 for Redwood at any time prior to July 21, 2000. A subsequent firm private placement of $175,000 must be made on or before January 15, 1999 and a $600,000 private placement must be made upon commencement of a 10 tonne bulk sample on any kimberlite pipe on the property. The pricing of the $175,000 private placement and the $600,000 private placement shall be the 10 day trading average immediately preceding that date plus 25%. Each private placement shall consist of a common share and a share purchase warrant exercisable at a price equal to 150% of the private placement price for two years from the date of the private placement. The private placements are subject to regulatory approval. Kennecott shall solely make all expenditures required to bring the project to a mutual decision to mine or by making exploration expenditures totalling $30 Million over seven years, whichever shall occur first. Kennecott shall expend $500,000 prior to May 30, 1999 and an additional $4,500,000 on or before May 30, 2003. Upon the commencement of commercial production from a mine located within the Property boundaries, Kennecott shall pay the additional sum of $2,000,000. There are currently forest fires on the Legend Property. Kennecott will mobilize a drill program on anomalies previously identified on the Legend Property as soon as forest fire conditions allow. ON BEHALF OF THE BOARD OF DIRECTORS MONTELLO RESOURCES LTD. REDWOOD RESOURCES LTD. Per: "Patrick Power" Per: "Gary Korzenowski" PATRICK POWER, President GARY KORZENOWSKI, President The Alberta Stock Exchange has neither approved nor disapproved the information contained herein. MONTELLO RESOURCES LTD. Cheers, Violetta