Sprott
Resource Corp. Announces Completion of $20 Million Rights Offering by its
Subsidiary Waseca Energy Inc.
TORONTO,
January 11, 2010 (TSX: SCP) � Sprott Resource Corp. (�SRC�) announced today that
its subsidiary Waseca Energy Inc. (�Waseca�) has completed a $20 million
financing by way of a rights offering to existing shareholders.� As part of the Rights Offering, SRC purchased
28.34 million common shares of Waseca at $0.60 per common share for a total
cost of $17 million.� As a result of the
Rights Offering, SRC�s ownership interest in Waseca has increased from 79.1% to
81.3% on an undiluted basis.�
�We are
extremely pleased with Waseca�s progress to date and are excited by its future
prospects,� said Kevin Bambrough, President and CEO of SRC.� �Waseca has acquired a significant land
position and we are pleased to be providing additional funding for its development.�
Waseca is a
private oil and gas company focusing on heavy oil production from the Lloydminster
area on the border of Saskatchewan and Alberta.� Waseca raised $31.2 million in October of
2008 in an initial financing through the issuance of 52.2 million common
shares, of which SRC purchased 45.3 million common shares for $27.2 million.
Waseca has
acquired 16,598 hectares of land (64.09 sections of land), in which it has a
100% working interest.� Waseca intends to
use funds raised from the Rights Offering to complete its 2010 capital program,
which will include drilling approximately 30 exploration wells and 15
development wells (the �Capital Program�).�
The anticipated cost of the Capital Program (including related land and
seismic) is expected to be approximately $27.3 million.� The Capital Program is designed to increase
Waseca�s production to approximately 1,500 bbl/d by the end of 2010 and to
generate significant future development opportunities.� Waseca�s 2009 exit production was 498 bbl/d.
About
Sprott Resource Corp.
SRC is a
Canadian based company, the primary purpose of which is to invest, directly and
indirectly, in natural resources. Through acquisitions, joint ventures and
other investments, SRC seeks to provide its shareholders with exposure to the
natural resource sector for the purposes of capital appreciation and real
wealth preservation. SRC is well positioned to draw upon the considerable
experience and expertise of both its Board of Directors and Sprott Consulting
Limited Partnership (�SCLP��), of which Sprott Inc. is the sole limited
partner. Pursuant to a management services agreement between SCLP and SRC, SCLP
provides day-to-day business management for SRC as well as other management and
administrative services. For more information, please visit www.sprottresource.com.
Forward Looking Statements
Certain statements contained herein
may constitute "forward-looking statements" or "forward-looking
information" under applicable securities laws.� Some of the forward-looking statements may be
identified by words such as �will�, "expects", "intends",
"anticipates", "should", "believes",
"plans", and similar expressions.�
Forward-looking statements, which are based on management�s current
expectations and assumptions, including Waseca�s ability to reach its future
production targets and implement its capital program at or below its expected
costs, involve a number of risks and uncertainties.� Actual results or achievements could differ
materially from those expressed in, or implied by, these forward-looking
statements. Factors that could cause actual results to differ from those
expressed in, or implied by, these forward-looking statements include, without
limitation, risks associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production; delays or changes
in plans with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses, and health,
safety and environmental risks), commodity price and exchange rate fluctuations
and uncertainties resulting from potential delays or changes in plans with
respect to exploration or development projects or capital expenditures.� No assurance can be given that any events
anticipated by these forward-looking statements will occur. These
forward-looking statements are made as at the date of this news release. SRC
does not undertake any obligation to publicly update or revise any of these
forward-looking statements, except as required by applicable securities laws.
For further
information, please contact:
Kevin Bambrough
President and CEO
Tel: (416) 977-7333
Fax: (416) 977-9555