21/11/2007 - 11:11

Shaw River aquires Atlas tenements, raises $3m in placement

21/11/2007 - 11:11

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West Perth-based Shaw River Resources Ltd will acquire the mineral rights to gold, base metals, nickel and platinum group elements on 14 Pilbara tenements owned by Atlas Iron Ltd in a scrip deal worth $1.5 million, the company has announced.

West Perth-based Shaw River Resources Ltd will acquire the mineral rights to gold, base metals, nickel and platinum group elements on 14 Pilbara tenements owned by Atlas Iron Ltd in a scrip deal worth $1.5 million, the company has announced.

Shaw will issue 8,187,773 shares to Atlas at a price of 18.32 cents each, as well as granting 2.5 million options exerciseable at 20 cents to the company.

In addition to the issue, Shaw will raise $3 million in a two-tranche placement to fund further exploration and drilling on its existing tenements.

 

 

The full text of a Shaw River announcement is pasted below

ACQUISITION

Shaw River Resources Limited (ASX Code: SRR) ("Shaw River") today announced it has agreed with Atlas Iron Limited (ASX Code: AGO) ("Atlas") to acquire certain non iron ore mineral rights on Atlas' Abydos ("Abydos") and East Pilbara tenements ("Goldsworthy"). The material terms of the agreement with Atlas are as follows:

  1. Shaw River will issue to Atlas 8,187,773 ordinary shares at 18.32 cents per share valued at $1.5 million and grant to Atlas 2,500,000 options exercisable at 20 cents on or before 31 December 2010.
  2. Atlas to assign non iron ore mineral rights to Shaw River for 14 Pilbara tenements. The non iron oremineral rights in the agreement are limited to gold, silver, copper, lead, zinc, nickel and PGEs.
  3. Atlas to retain a first right of refusal to re-acquire the non iron ore rights.
  4. The agreement is subject to Shaw River receiving shareholder approval at a shareholder meeting expected to be held in January 2008.

PLACEMENT

Shaw River is pleased to announce a placement of $3 million in 2 tranches ("the Placement"):

  1. $1.23 million through the issue of up to 8.2 million ordinary shares at 15 cents per share to sophisticated and professional investors.
  2. $1.77 million, subject to shareholder approval, through the issue of up to 11.8 million ordinary shares at 15 cents per share to Atlas, Directors, sophisticated and professional investors. Subject to shareholder approval, Atlas will subscribe for $1.15 million of the second tranche of the Placement.

Shaw will use the cash raised from the Placement to fund further exploration on its existing tenements, in particular RC drilling at the Hedland Project as well as funding immediate drill target generation exploration on the newly acquired Abydos and Goldsworthy Mineral Rights Tenements.

Shaw River's Managing Director Vincent Algar commented, "We are very pleased to be able to complete the acquisition and placement of shares, and are delighted with the support that we have received from Atlas, Shaw River's largest shareholder. The acquisition provides us with a natural extension to our exploration strategy in the
Pilbara, with significant target potential across the newly acquired ground. Completion of the Placement will provide Shaw River with the funds it needs to aggressively pursue exploration on its existing exciting projects and new mineral rights tenements acquired from Atlas"

BACKGROUND INFORMATION ON TENEMENTS

The 14 new tenements (9 granted and 5 applications) are located in the Abydos and Goldsworthy regions of the East Pilbara adjacent to Shaw River's existing project areas. The new ground expands Shaw River's land holding by a further 1,328 km2 to over 6,000km2 (see Figure)

The acquisition of these new mineral rights further enhances Shaw River as a significant Pilbara focused minerals explorer. The new tenements are located adjacent to known gold and base metal deposits and existing Shaw River projects at Hedland, Pardoo and Abydos. The tenements are considered highly prospective for gold and base metals such as zinc, lead and copper as well as having potential for nickel and PGE (Platinum Group Elements).

Shaw River intends to begin mineral exploration on the tenements immediately, focused on the generation of drill targets. The company will target areas adjacent or along strike of known mineral occurrences and historical deposits.

Abydos

The Abydos group of tenements consists of six granted tenements located 110km south of the town of Port Hedland and are additional to the company's two existing tenements in the area.

The tenements are currently being explored by Atlas for iron ore in the Pincunah Greenstone Belt. Historical mining in the area includes the Lynas Find goldfield (+140,000oz mined) and the Lallah Rookh Gold Mine (31,900 oz mined). The eastern tenements of the group include rocks of the Sulphur Springs Group, which host the Sulphur Springs VHMS deposit (10mt @ 3.5% Zn and 1.5% Cu), just 8km to the east.

Historical information shows the presence of multiple known occurrences of gold, base metals (copper-zinc-lead and silver), nickel and PGE anomalism across the tenements being acquired.

Tenement E45/2404 in the package includes the southern end of the prospective Tabba Tabba Shear Zone currently being explored by Shaw River with exciting new gold results at its Hedland Project. This mineralised greenstone belt hosts base metal, gold and PGE mineralisation.

Shaw River will commence a joint mapping program with Atlas over the Abydos tenements starting in late November 2007. This detailed geological mapping will allow the company's exploration team to immediately target potential mineralisation by creating an improved and consistent understanding of the geological environment.

Goldsworthy

The Goldsworthy tenement group consists of three tenements and five tenement applications adjacent to Shaw River's Pardoo and Hedland Projects. The tenements cover an area under shallow cover on the north eastern extension of the mineralised Tabba Tabba and Mallina Shear Zones where they collide and wrap around the south end of the Ord Ridley Greenstone Belt. Previous work by holders Independence Group included shallow RAB drilling and geophysics into the sediments and sheared rocks located in the area. Gold intersections included; 10m at 0.26 g/t Au including 1m at 1.31 g/t Au in GWA, 107, 8m at 0.53 g/t Au including 1m at 2.2g/t Au in GWA117 and 6m at
0.5 g/t Au including 1m at 2.63 g/t Au in GWA 115.

Regional geophysics suggests a complex geological environment with evidence for numerous styles of gold and base metal shear hosted mineralisation.

Shaw River regards this area as highly prospective given results to-date at its adjacent Hedland project. The new tenement acquisition with associated data will improve Shaw River's geological model and allow Shaw River to extend its programs and opportunities. Work on this area is likely to commence immediately following exploration that is currently underway on Shaw River's Hedland project.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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