CALGARY, ALBERTA, Dec. 11, 2009 (Marketwire) -- Westcore Energy Ltd. (TSX VENTURE:WTR) ("Westcore" or the "Corporation") is pleased to report that it has entered into a binding agreement with Goldsource Mines Inc. ("Goldsource") pursuant to which Goldsource has agreed to apply its proprietary geophysical matrix to Westcore's Fugro airborne geophysical data and to provide Westcore with specific drill sites on its Saskatchewan and Manitoba coal lands which, in the opinion of Goldsource, will have a high probability of intersecting significant intervals of coal.
Goldsource has completed a significant amount of work and incurred considerable expense since its original Border coal discovery in April of 2008 in developing a proprietary geophysical matrix applicable to Fugro airborne geophysical data which provides a "signature" for prospective coal deposits based on a correlation between airborne geophysical data analyses, down-hole electronic logs and geological ground proofing through drilling. This matrix will initially be applied in respect of Westcore's Fugro airborne geophysical data for the block of coal permits immediately to the north of Goldsource's Border Property known as the Hudson Bay North Block. Data related to other coal properties of Westcore will be reviewed in due course provided that satisfactory success is achieved on this project. Based upon this review, Goldsource will provide Westcore with coordinates for the highest priority drill targets.
As consideration for this data, Westcore will initially issue an aggregate of 100,000 common shares to Goldsource at an ascribed price of $0.50. In the event that Westcore is successful in drilling at least one intercept consisting of not less than 10 metres of coal on each of two drill targets identified by Goldsource ("Success Criteria"), the following additional conditions will apply;
a. Westcore will issue an additional 1.0 million common shares of Westcore to Goldsource;
b. Goldsource will receive a 25% working interest in all of Westcore coal lands in Saskatchewan and Manitoba;
c. Westcore will expend an additional $3.0 million on the aforementioned lands before Goldsource will be required to contribute its 25% of expenditures;
d. Westcore and Goldsource will enter into a 75% / 25% joint venture agreement with terms and conditions standard to mining industry joint ventures;
e. Goldsource will contribute its 100% interest in its 10 sections of coal permits that are within Westcore's northern block adjacent to Border in Saskatchewan; and
f. In the event that Westcore acquires interests from time to time in any additional prospective coal properties in Saskatchewan or Manitoba, Goldsource shall have the option to acquire a 25% joint venture participating interest therein.
In the event the Success Criteria are met on only one target identified by Goldsource, the number of shares issuable to Goldsource will be reduced by 50% and the remaining conditions set forth above will not apply until the Success Criteria are met in full, at which time the balance of the aforementioned shares will be issued.
Paul Conroy, President and CEO, states: "Westcore is extremely fortunate to have this agreement with Goldsource. Since their initial discovery of coal near Hudson Bay in early 2008, Goldsource has defined six coal-bearing regions at Border that span a distance of about 30 kilometres, from north to south. There is no reason to suspect that the coal deposits stop at Goldsource's northern boundary, making the Hudson Bay North property highly prospective ground for coal exploration. Having the benefit of Goldsource's substantial experience in delineating high-probability coal targets on our properties is expected to make our pending drilling program substantially more efficient and effective. We look forward to obtaining these initial targets and commencing drilling in the immediate future."
This transaction and the common shares issuable hereunder is subject to the approval of the TSX Venture Exchange.
Ellen MacNeill, Professional Geoscientist in the Province of Saskatchewan and Qualified Person for this news release, has reviewed and approved its contents.
Forward Looking Statements
Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.