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Lysander has three-month option on Verticalnaya owner



2009-05-25 16:23 ET - News Release

Mr. Bryce Porter reports

ADDITIONAL IMPROVED OPTION AGREEMENT VERTICALNAYA ANTHRACITE MINE

Lysander Minerals Corp. has entered into a three-month option agreement under which it may acquire 49 per cent of Skhidna Vugilna Kompania LLC of Ukraine, the owner of the Verticalnaya mine. Lysander also holds an option to acquire Ukraine Energy Ltd. of Ukraine, the 51-per-cent owner of East Coal. A previous agreement under which Ukraine Energy Ltd. could acquire the 49-per-cent interest for higher consideration is suspended and will be terminated on exercise of the option.

To exercise the option, Lysander will issue five million common shares and an unsecured three-year, convertible $3-million (U.S.) debenture. The debenture may be converted by the holder into eight mllion common shares of Lysander at any time. Interest will be 2 per cent over Libor. There will be a $100,000 (U.S.) advance payment of interest. To maintain its option, Lysander will make monthly advances to East Coal in respect of budgeted expenses at the mine.

A technical report dated September, 2008, on the Verticalnaya mine is available on SEDAR and on the Lysander website. Lysander intends to develop Verticalnaya as expeditiously as possible, subject to constraints affecting capital markets.

Key data for Verticalnaya mine

Key project indicators from the September, 2008, technical report are as follows:



Initial capital expenditures: $237.8-million (U.S.)





Net present value at 12 per cent: $352.1-million (U.S.)





Internal rate of return: 35.2 per cent





Average cash operating cost per saleable tonne: $31.19 (U.S.) per tonne





Pay back period: Seven years





Proven reserves: 16.2 million tonnes





Probable reserves: 11 million tonnes





Measured resources: 57.3 million tonnes





Indicated resources: 18.9 million tonnes





Total resources: 76.2 million tonnes



Resources are inclusive of reserves.

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