Lysander to acquire Xtract's 35% interest in Elko

2009-04-27 13:27 ET - News Release

Mr. Bryce Porter reports

LYSANDER ANNOUNCES ADDITIONAL INVESTMENT IN ENERGY

Lysander Minerals Corp. has entered into a conditional agreement with Xtract Energy PLC of London, England, under which it will acquire 35 million shares in Elko Energy Inc., representing all of Xtract's 35-per-cent interest in Elko, in exchange for 35 million common shares of Lysander and warrants entitling Xtract to subscribe for an additional 17.5 million common shares of Lysander, at an issue price of 20 cents per share, exercisable for a period of three years. The agreement is subject to further due diligence, the completion of a definitive agreement, and to regulatory, board and shareholder approvals.

Elko is a private Canadian registered oil and gas exploration company, which has interests in exploration and production licences in the Danish and Dutch North Sea. Its major asset is in the Danish North Sea: an 80-per-cent interest in 26 offshore blocks in a 5,400-square-kilometre exploration and production licence close to the prolific Central Graben oil field. Technical analysis carried out to date indicates the potential for significant reserves. Elko also holds a 60-per-cent operating interest in gas-bearing licence blocks P1 and P2, in the Dutch North Sea.

Xtract is a public company listed on AIM in London. It has a portfolio of energy properties, principally at early stages of development.

The acquisition of Xtract's interests in Elko will represent the second transaction arranged by Lysander under its policy, adopted following reorganization in 2008, of expansion into businesses with potential for high returns. For its expansion plans, Lysander is focusing on exceptional situations in the field of energy. It has already acquired rights over a coal mine in Ukraine and continues to advance that project. As previously announced, Lysander expects to issue 22 million common shares on the exercise of its option to acquire Ukraine Energy Ltd. For further information please visit the Lysander website. Lysander plans to seek shareholder approval for both the Elko transaction and the Ukraine Energy transaction, at an coming shareholder meeting.

Upon successful completion of both the above transactions, Xtract will own approximately 43.7 per cent of the issued capital of Lysander, rising to approximately 52.2 per cent on a fully diluted basis. Under the terms of the agreement with Lysander, Xtract will have the right to appoint a director to the board of Lysander. It is expected that Andy Morrison, chief executive officer of Xtract and a director of Elko, will join the board of Lysander and will be available for oversight of the Elko interest. John Newton and John Conlon, directors of Lysander, are directors of Xtract.

In the year ended Dec. 31, 2007, Lysander incurred a loss before tax of $400,000 and had net assets of $4.3-million, and Elko incurred a loss before tax of $7.3-million and had net assets of $19.9-million. The unaudited book value of Elko in Xtract's accounts as at Dec. 31, 2008, was four million pounds sterling.

Lysander intends to continue its growth strategy. The relationship with Xtract, as a significant shareholder, is expected to enhance Lysander's ability to develop value for shareholders from its projects and investments.