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Message: RX Announces JV with Spruce Ridge Resources TSX-SHL

RX Announces JV with Spruce Ridge Resources TSX-SHL

posted on Apr 22, 2008 05:36AM
RX Exploration Inc.

Spruce Ridge Resources Ltd.

Apr 22, 2008 09:22 ET

RX Exploration Inc. and Spruce Ridge Resources Ltd. Announce Agreement in Principle to Form a Joint Venture on Ground Adjacent to the Drumlummon Mine in Montana

TORONTO, ONTARIO--(Marketwire - April 22, 2008) - RX Exploration Inc. (CNQ:RXEX) and Spruce Ridge Resources Ltd. (TSX VENTURE:SHL) ("the Companies") are pleased to announce that they have today signed an agreement in principle (the "JV Agreement") whereby a joint venture company will be formed to acquire about 350 to 400 acres of patented mining claims covering an overall length of about five miles (the "JV Property") which are adjacent to RX's Drumlummon Mine near Marysville, Montana. RX is conducting an ongoing underground drilling and rehabilitation program at the Drumlummon Mine which is one of the larger former producers of gold and silver in the Western United States. It is of the "bonanza"- type epithermal deposits which are very young and low temperature in origin and which can produce high grades over large widths.

The JV Property contains tailings from the Drumlummon Mine which, according to historical information, contain substantial recoverable amounts of gold and silver. Historical resource estimates cannot be given as they are not in compliance with current NI 43-101 standards and accordingly cannot be relied upon. The Companies have commissioned a NI 43-101 compliant report to confirm the historical estimates, which will also review the potential for placer mineralization on the JV Property. In addition, the JV Property contains the concrete foundations of a previous 1,000 ton per day mill. The foundations are in excellent condition and may be appropriate for use in the reconstruction of a mill should a production decision be supported by a feasibility study for the JV Property and/or the Drumlummon Mine.

Pursuant to the JV Agreement, Spruce shall have earned its 50% working interest in the JV Property by subscribing to a private placement of RX in the amount of CDN $3,000,000 (the "Private Placement") consisting of a total of 7,500,000 units at a price of CDN $0.40 per unit. Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share for two years at CDN $0.60 per share. The securities issued are subject to a four month hold period. RX will be responsible for payment of all cash and share payments required to acquire the JV Property with the exception of all reserved royalties on the tailings and placers. Each party will pay its proportionate share of future exploration and development costs. If either party elects not to participate in a program of expenditures, a standard dilution clause will apply, provided that Spruce Ridge shall not be subject to cash calls for at least one year from receipt of all necessary approvals hereunder. A further announcement will be made on the definitive terms of the Joint Venture.

By an agreement dated April 18, 2008, RX acquired the right to purchase outright the JV Property from the arms' length vendors for the sum of US $625,000 plus 350,000 common shares of RX which will be subject to one year hold period. The vendors, who are the same principals from whom RX acquired the Drumlummon Mine, will retain a 2% NSR on tailings and 3% gross royalty on placer mineralization. The JV Property includes all appurtenant water rights.

The completion of the private placement and the acquisition of the JV Property are subject to each of the parties obtaining all necessary approvals including all required consents, approvals and acceptances from applicable securities regulatory authorities including the approval of the TSX Venture Exchange.

The private placement by Spruce Ridge is part of a larger private placement being completed by RX through IBK Capital Corp. of Toronto and is on the same terms and is in addition to the CDN $1,916,800 private placement announced by RX in its press release dated April 11, 2008. The entire private placement by RX has now been completed subject to regulatory approval, and has resulted in total subscriptions of almost CDN $5 million with net proceeds of about CDN $4.5 million which will be used primarily to finance the acquisition of the JV Property, continue development of the Drumlummon Mine, general administrative expenses and working capital.

9% cash commissions and 10% broker's warrants were paid and issued pursuant to the private placement. The broker's warrants are exercisable at CDN $0.40 per share for a two year period.

About RX

RX Exploration Inc. is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNQ (Symbol:RXEX). There are currently 37,478,508 common shares issued and outstanding.

About Spruce Ridge

Spruce Ridge Resources Ltd. is a reporting issuer in good standing in the Provinces of Ontario, Alberta and British Columbia whose shares are listed on the TSX Venture Exchange (Symbol:SHL) There are currently 22,114,182 common shares issued and outstanding.

Forward Looking Statements: Statements made in this news release that relate to future plans, expectations, events or performances are forward looking statements. Such statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

Neither the TSX Venture Exchange nor the CNQ have reviewed, nor do they accept responsibility for the adequacy or accuracy of this release.

For more information, please contact

RX Exploration Inc.
John F. O'Donnell
(416) 862-7330
Email: [email protected]


RX Exploration Inc.
Murray R. Nye
(204) 989-2434
Email: [email protected]


Spruce Ridge Resources Ltd.
John Ryan
President & CEO
(519) 428-5327
Email: [email protected]


CHF Investor Relations
Lindsay Carpenter
Associate Account Manager
(416) 868-1079 ext. 239
Email: [email protected]
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