WML, CXX
Crosshair to Acquire 2,600 Square Miles of Prospective Uranium Properties in Argentina
Crosshair Energy Corporation CXX
10/25/2012 6:30:05 AM
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 25, 2012) -
Crosshair Energy Corporation (TSX:CXX)(NYSE MKT:CXZ)(NYSE Amex:CXZ) ("Crosshair" or the "Company") is pleased to announce that it has entered into a Letter of Intent ("LOI") with
Wealth Minerals Ltd. (TSX VENTURE:WML) to acquire all of Wealth Minerals' prospective uranium properties in Argentina; a land package that totals more than 2,600 square miles (685,000 hectares).
The concession areas included in the LOI are located in Salta, Catamarca and Chubut provinces, and will be 100 percent owned by Crosshair on the closing of the transaction. Properties included in the LOI include the San Jorge Basin Properties, Amblayo and Diamante Los Patos. The San Jorge Basin concession area includes five individual properties (including Bororo Nuevo) on which some preliminary exploration work has been completed.
"The mineral resource potential of this land package represents an incredible opportunity for us," said Mark Ludwig, Crosshair President and Chief Executive Officer. "The continuing volatility in the junior resource sector demands that we broaden our field of view and seek opportunities that can enhance shareholder value wherever we can find them. These Argentinian properties represent just such an opportunity and I'm very excited about the exploration potential they represent."
The Bororo Nuevo property covers an area of 35,500 hectares (137 square miles) within the historically productive San Jorge Basin and is the most advanced of the uranium properties being acquired. To date, nine zones of mineralization have been discovered within an area that measures 12 kilometres by 4 kilometres, with less than 12 percent of the property having been mapped and prospected. Other exploration companies currently active in the basin include U3O8 Corp. and UrAmerica Ltd.
The San Jorge Basin is host to two past-producing deposits: Los Adobes and Cerro Condor. The unmined Cerro Solo deposit, currently owned by the National Commission of Atomic Energy (CNEA) and not one of the properties being acquired by Crosshair, is located 15 km south of Bororo Nuevo and is reported to contain a historical resource estimate of 15.4 million pounds of U3O8 (CNEA June 2009). This historical resource estimate is not compliant with currently accepted resource classifications as set forth by the Canadian Institute of Mining and Metallurgy. A Qualified Person has not completed sufficient work to classify these historic mineral resources as current mineral resources or mineral reserves as defined by NI 43-101, and Crosshair is not treating the historic resources as current. Crosshair has not verified the information and the mineralization is not indicative of mineralization that might occur on the properties to be acquired by Crosshair.
The Amblayo property totals 14,998 hectares (58 square miles) and is located in the core of Argentina's Tonco uranium district. The property completely surrounds the past-producing Don Otto mine, which operated intermittently from 1963 to 1981. The Don Otto mine itself is not included in the concessions being acquired from Wealth Minerals.
The Diamante Los Patos property represents the discovery of a large, new area of uranium mineralization located on the boundary between the provinces of Salta and Catamarca in northwestern Argentina. Exploration on the 13,300 hectare (51 square mile) property has identified seven large mineralized zones over a 20 kilometre by 30 kilometre area.
The consideration for the acquisition of the properties is payments to Wealth Minerals of CDN$1.0 million in cash and issuances to Wealth Minerals of one million Crosshair common shares. The cash payments and share issuances will be done over a two year period. In addition, Wealth Minerals retains a 1% yellowcake royalty on all uranium production and a 1% NSR royalty on all other minerals.
Completion of the transaction is subject to a number of conditions, including Toronto Stock Exchange and NYSE MKT acceptance and the negotiation and execution of a definitive agreement. There can be no assurance that the transaction will be completed as proposed or at all.
Crosshair's financial advisor for this transaction is Axemen Resource Capital.
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