Search Minerals Options Strange Lake Area Ree Property, Labrador to Quest Rare Minerals Ltd.
VANCOUVER, BRITISH COLUMBIA—(June 15, 2010) - Search Minerals Inc. (TSX VENTURE:SMY) (“Search”) is pleased to announce that it has entered into an exploration and option agreement (the “Option Agreement”) with Alterra Resources Inc. (“Alterra”), its wholly-owned subsidiary, and Quest Rare Minerals Ltd. (TSX VENTURE:QRM) pursuant to which Alterra has granted (the “Acquisition”) to Quest an option (the “Option”) to acquire up to a 65% undivided working interest in and to 30 mining claims (the “Claims”) located on 750 hectares on the south-eastern contact of the REE-bearing Strange Lake Peralkaline Complex (the “Property”) in Western Labrador in the Province of Newfoundland and Labrador.
Pursuant to the Option Agreement, Quest may earn a 50% undivided working interest (the “First Option”) in and to the Claims by issuing an aggregate of 90,000 common shares of Quest to Alterra over a period of three years, with 10,000 common shares issuable on TSX Venture Exchange approval, 15,000 common shares issuable on the first anniversary of the closing date of the Acquisition (the “Closing Date”), 25,000 common shares issuable on the second anniversary of the Closing Date and 40,000 issuable on the third anniversary of the Closing Date. In addition, to earn the First Option, Quest must incur mining exploration expenditures of $500,000 in the aggregate over a period of three years, $100,000 payable on or before the first anniversary of the Closing Date, $150,000 payable on or before the second anniversary of the Closing Date and $250,000 payable on ore before the third anniversary of the Closing Date. Upon completing all of the share issuances and payments mentioned above, Quest will have an option to acquire an additional 15% undivided working interest (the “Second Option”) in and to the Claims by issuing an aggregate of 150,000 common shares of Quest to Alterra over a period of two years, 50,000 common shares issuable on the fourth anniversary of the Closing Date and 100,000 common shares issuable on the fifth anniversary of the Closing Date. In addition, to earn the Second Option, Quest must incur mining exploration expenditures of $1,250,000 in the aggregate over a period of two years, $500,000 payable on or before the fourth anniversary and $750,000 payable on or before the fifth anniversary and pay $75,000 in cash to Alterra on or before the fourth anniversary of the Closing Date.
Pursuant to the Option Agreement, Quest will enter into an assignment agreement with Search and Alterra pursuant to which Quest shall transfer and assign to Search nine of the Claims in consideration for 10,000 common shares in the capital of Search. Immediately following the transfer by Quest to Search of the nine mining claims, Search will transfer these mining claims to Alterra. These nine claims, together with 21 mining claims already owned by Alterra comprise the Claims that are the subject of the Option Agreement. The Claims are subject to a 1.5% net smelter return royalty in favor of Alterra. Quest may, at any time, purchase two-thirds of the 1.5% net smelter return royalty for $1,000,000.
Quest shall become the operator on the Claims on the Closing Date. In consideration for acting as the operator, Quest shall be entitled to an annual management fee payable in cash by Alterra in an amount equal to 10% of the expenditures incurred by Quest for each year of the option period.
Jim Clucas, President and CEO of Search, states, “We are delighted to have entered into this Option Agreement with Quest, the senior player in the district. We agree with Quest that this consolidation will allow Search to realize the full economic potential of its Strange Lake claims.”
“We are very pleased with this new property acquisition, as it straddles the south-eastern part of mineralized Strange Lake Granite, host to all of the known rare earths in the area, including our 100%-owned B-Zone and the historical Main Zone deposits,” stated Peter J. Cashin, President & CEO of Quest.
The completion of the Acquisition is subject to a number of conditions, including but not limited to the acceptance of the TSX Venture Exchange.
Dr. Randy Miller, Ph.D, P.Geo, Vice President Exploration, is the Qualified Person responsible for the technical content of this press release.
About Search Minerals Inc.
Search Minerals Inc (TSX VENTURE:SMY) has a strong and dedicated management team with outstanding capabilities in separate but related mining activities, any of which has the potential to generate significant shareholder value.
Search’s exploration team is led by Vice President Exploration Dr. Randy Miller, one of the world’s foremost rare earth geologists. Dr. Miller is responsible for directing the current exploration programs on Search’s large land position in Labrador.
Search also has a technology arm headed up by Dr. David Dreisinger, Chair of Hydrometallurgy at the University of British Columbia in Vancouver, Canada and a consultant to several major international mining companies.
Search’s business strategy is to fund ideas or concepts in the mineral exploration or metallurgical fields that have low initial costs and create opportunities that would be attractive to an incoming partner. The incoming partner would be expected to fund the next phase of exploration or technology development.
This press release does not constitute an offer to sell or solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility of the adequacy or accuracy of this release.