Toronto, Ontario CANADA, February 08, 2007 /FSC/ - Sage Gold Inc. (SGX - TSX Venture), announces a three year option agreement with Sheltered Oak Resources Inc. (a private Ontario corporation, 'OAK') to earn an undivided 55% interest in the Kerrs property and an undivided 100% interest in the Chibougamau and Malartic properties.
In order to earn the interest in each property, OAK will pay cash and incur exploration expenditures on each property over the term of the agreement as follows:
Kerrs: $200,000 in cash plus $1,800,000 for Exploration Expenditures
Chibougamau: $105,000 in cash plus $265,000 for Exploration Expenditures
Malartic: $55,000 in cash plus $150,000 for Exploration Expenditures
On closing, OAK will issue SAGE 180,000 common shares in the capital of OAK and grant SAGE the right to purchase by way of private placement 500,000 common shares of OAK at any time within a period of three years at a price of $1.00 per share from the date on which the common shares are listed and trading on a recognized Stock Exchange.
During the option period SAGE shall be the operator responsible for all prospecting, exploration, development and mining operations of the Sage properties and will receive a management fee equivalent to 15% of the Exploration Expenditures. SAGE will have a "Back-in Option" which will allow Sage to maintain operating and ownership control of the Kerrs property.
Nigel Lees, President and CEO, commented "We are very pleased with the agreement with OAK and believe the relationship will be highly beneficial to both parties. For Sage, we will manage the aggressive exploration program, maintain a significant interest in the Kerrs gold project with back-in rights and a meaningful share position in Sheltered Oak which plans to list on a Stock Exchange this year.
The first drill program (Spring 2007) is designed to test the up dip section of the Kerrs Gold system in order to trace the high grade vein structures encountered in recent drilling."
The agreement is subject to a number of conditions including regulatory approval.
The Kerrs property comprises total leased and/or staked claims amounting to approximately 18,883 acres and is located north of Kirkland Lake, Ontario. The Kerrs Gold System consists of a gold bearing green carbonate zone that can be traced for over 1,200 metres in strike length and down dip from 150m to 750m. The system is open to depth from surface and along strike to the northeast.
The Quebec properties include the Malartic property (14 claims) and the Chibougamau properties which include the Barlow property (15 claims) and the Fancamp property (4 claims). All of the properties have had a significant amount of historical work and Sage has completed compilation studies on the Barlow and Malartic properties.
SAGE is a mineral exploration and development company which has interests in exploration properties in Ontario and Quebec, Nevada and Arizona. Its main properties are the, Onaman Jacobus and Kerrs properties in Ontario, the Dixie Fork, Triple Junction, Pony Spur, Dike, properties situated in Nevada, and the Big Bend gold property, located in Arizona. Technical reports relating to the properties can be obtained from the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.
For further information, contact:
Nigel Lees, President and C.E.O.,
or
Mike O'Brien, Manager/Investor Relations
Phone: 416-204-3170
Fax: 416-260-2243
This release was prepared by management of the Company who takes full responsibility for its contents. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Some statements contained in this release are forward-looking and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Such forward-looking statements include comments regarding mining and milling operations, mineral resource statements and exploration program performance. Factors that could cause actual results to differ materially include metal price volatility, economic and political events affecting metal supply and demand, fluctuations in mineralization grade, geological, technical, mining or processing problems, exploration programs and future results of exploration programs, future profitability and production. The Company disclaims any obligation to update forward-looking statements.
