Vancouver, BC, June 21, 2007: Artha Resources Corp. (AHC.P - TSX.V) is pleased to announce the signing of a Letter of Intent (LOI) with Energy Metals Corporation of Vancouver, Canada (TSX: EMC; NYSE Arca: EMU) dated June 20, 2007. Pursuant to this agreement Artha can earn up to a 70% interest in the Clarkson Hill, WY, DCB, and the BL uranium properties located in Wyoming, USA (the "Properties").
Artha is a capital pool company and intends that this transaction constitute its Qualifying Transaction under the rules of The TSX Venture Exchange (the "Exchange"). As the acquisition is not a Non-Arm's Length Qualifying Transaction, Artha will not be required to obtain shareholder approval under the exchange policies.
Clarkson Hill (Qualifying Property)
The Clarkson Hill Property is located on the southern edge of the Wind River Basin 26 miles from Casper in Natrona County, Wyoming.
Roll-front type uranium mineralization was discovered during the 1950's with a small amount of ore mined and shipped for treatment from the "old pit area" on the property. In 1960 Nuclear Reserve Inc. (Petro Nuclear) and Mineral Exploration Co. (MEC) a subsidiary of Union Oil entered into a joint venture and carried out exploration on the property including a significant drilling program. These and previous companies are reported to have drilled an estimated 383 holes including 21 core holes for a total of 124,565 feet.
In a geological report dated March 1974 MEC reported a resource of 1,224,000 lbs of U3O8 contained within 850,000 tons grading 0.072% U308 using a cut off grade of 0.03% U3O8 was estimated.
The WY property is located in the Shirley Basin Mining District, in Carbon County, Wyoming.
Wold Nuclear Corp, a previous operator of the Company, explored the property in the 1970's and documents in a geological report dated September 1978 estimated resources in two separate areas on the property. In the north area a resource of 877,000 lbs U3O8 contained within 528,000 tons grading 0.083% U3O8 at a cutoff of 0.04% U3O8 was estimated.
While in the south area a resource of 493,000 lbs U3O8 contained within 432,000 tons grading 0.058% U3O8 using a cutoff grade of 0.03% U3O8 was estimated.
Artha is not treating historical estimates at Clarkson Hill or WY as current mineral resources as they have not been classified according to CIM resource categories and are non National Instrument 43-101 compliant and therefore these historical estimates should not be relied on. While there are no resources established under the current National Instrument 43-101, Artha considers the historical data to be substantial and relevant as it will be invaluable to guiding further exploration and resource definition.
DCB and BL Properties
The DCB property is located in Converse County and the BL property is located in Sweetwater County, Wyoming. Both of these uranium prospects have minimal geological data available at this time, however reports note that there is uranium mineralization from historic work.
The following is a summary of the material terms of the LOI:
Artha may exercise its right (the "First Option") to earn up to 60% interest in the properties by incurring a total of Cdn $5 million in exploration expenditures and issuing 1,813,060 shares as follows:
- incurring exploration expenditures on one or more Properties as follows:
- $500,000 within 18 months of Regulatory Approval
- a further $1,000,000 within 30 months of Regulatory Approval;
- a further $1,000,000 within 42 months of Regulatory Approval;
- a further $1,000,000 within 54 months of Regulatory Approval;
- a further $1,500,000 within 60 months of Regulatory Approval;
- delivering to EMC:
- 415,765 common shares of Artha, appropriately adjusted for any subdivisions, consolidations or other authorized capital changes relating to Artha's share capital after the date hereof ("Shares") within 10 days following Regulatory Approval;
- a further 465,765 Shares on the first anniversary of Regulatory Approval;
- a further 465,765 Shares on the second anniversary of Regulatory Approval; and
- a further 465,765 Shares on the third anniversary of Regulatory Approval.
Artha may earn a further 10% for a total of 70% by paying all exploration and development costs after the exercise of the First Option and delivering a feasibility study to EMC within 18 months of the exercise of the First Option.
EMC shall have the option to purchase from Artha an additional interest in a particular Property to take EMC's interest in the Property to 50%, subject to the following and certain other conditions:
- if a feasibility study has not been prepared for the Property, EMC shall pay to Artha a cash amount equal to three times the amount of expenditures incurred by Artha on the Properties;
- if a feasibility study has been prepared for the Property, EMC shall pay to Artha a cash amount equal to five times the amount of expenditures incurred by Artha on the Properties;
EMC will also have the right to participate in future equity financings to a maximum of 20% of such equity issuances for a period of 12 months following Regulatory Approval. In addition, EMC will be entitled to appoint one member to the Board of Directors of Artha.
Proposed Work Program
An independent geological report is in the process of being completed by Douglas Beahm, PE PG, President of BRS Inc for the Clarkson Hill Property in accordance with National Instrument 43-101.
Artha initially intends to undertake a minimum work program of $500,000 on the Clarkson Hill property to meet the initial expenditure requirement under the First Option. Details of the work program will follow once Artha has received the independent geological report.
Capitalization and Private Placement
Artha currently has 6,654,951 common shares issued and outstanding. In addition there are 600,000 stock options issued to directors and officers under its current option plan and 345,050 broker warrants issued to Union Securities in connection with Artha's initial public offering.
Prior to or concurrently with the completion of the Qualifying Transaction, with the net proceeds being used to undertake the proposed work program and for general corporate purposes, Artha intends to complete a private placement for gross proceeds of up to $1.3 million. Details of the private placement will follow at a later date.
Principals of Artha upon Completion of the Qualifying Transaction
Artha intends to retain its current management team and directors, consisting of Todd McMurray, Ken Midan, Kamal Nagra and Christine Thomson. Additionally the board of Artha is pleased to announce that David Straw has agreed to join the Board of Directors.
David Straw is a geologist with extensive experience in all phases of mineral exploration, property development, joint ventures, mine development, production, valuation and finance across most commodities, including silver, gold, tin, tungsten, base metals, iron ore, mineral sands, uranium and coal. He has wide experience with companies, governments and individuals and has an intimate knowledge of all levels of corporate administration. His global experience includes, but is not limited to, Australia, Canada, USA, Mexico, Africa (South, West and Central), Europe and South-East Asia.
David has held a broad range of technical, managerial and advisory positions through his career to both small and large exploration and mining companies as well as governments.
Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies or waived by the Exchange. Artha intends to apply for an exemption or waiver from sponsorship requirements. However, there is no assurance that Company will be able to obtain this.
Significant Conditions to Closing
Completion of the acquisition is subject to numerous conditions including but not limited to, the completion of satisfactory due diligence, the execution of a definitive agreement, the closing of the private placement referred to above and Exchange and regulatory approvals. There can be no assurance that the acquisition will be completed as proposed or at all.
Artha will be required to file a filing statement under Exchange policy in connection with the Qualifying Transaction. Investors are cautioned that, except as disclosed in a filing statement to be prepared in the connection with the acquisition, any information released or received with the respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered to be highly speculative.
In accordance with Exchange policy, Artha's shares are currently halted from trading.
Ken Midan, P.Eng, a director of Artha is a Qualified Person under National Instrument 43-101, and as such has reviewed the content of this press release.
On Behalf of the Board of Directors,
President and Chief Executive Officer
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.
For Information Contact
Tel: 604 641 1396