JIULIAN RESOURCES INC. ANNOUNCES THE OPTION AGREEMENT TO ACQUIRE UP TO A 65% INTEREST IN THE HAWK AND GREY COPPER – GOLD PROPERTY AND TERMINATION OF PREVIOUSLY ANNOUNCED TRANSACTION
Jiulian Resources Inc. (“JLR”) is pleased to announce that it has entered into an Option Agreement dated March 31, 2009, (the “Agreement”) to earn up to a 65% interest from Happy Creek Minerals Ltd. (“Happy Creek”) in the mineral properties known as the Hawk Property and the Grey Property, located in the Clinton Mining Division, in the Province of British Columbia (the “Property”). The proposed transaction described in the Agreement (the “Transaction”) will serve as JLR’s Qualifying Transaction pursuant to TSX Venture Exchange (the “Exchange”) Policy 2.4. Upon completion of the proposed Qualifying Transaction, JRL will be involved in the mineral exploration industry sector.
The Property is located approximately 36 km northeast of 100 Mile House in the south-central Cariboo region of British Columbia. The Hawk Property is comprised of 16 contiguous mineral claims that cover 1377.6 ha on BCGS map sheet 092P.086. All of the 16 claims are 100% owned by Happy Creek. The Grey Property is comprised of 3 contiguous mineral claims that cover 589.9 ha and adjoin the Hawk Property to the south. Happy Creek entered into an Option Agreement with the owner of the Grey Property on June 11, 2007, pursuant to which Happy Creek was granted the right to earn a 100% interest in the Grey Property. Access to the property is provided by paved and well-maintained gravel roads.
The Property is underlain by geology of the central Quesnel Trough, an island arc assemblage hosting a number of copper-gold-silver deposits and mines including Mount Polley to the northwest and Afton to the southeast. Widespread outcrops and boulders containing relatively high grade copper, gold and silver values occur over an area approximately three kilometres by one kilometre in dimension. Historical drilling in the western portion of the property returned three metres grading 0.79 percent copper, 1.73 g/t gold and 9.43g/t silver, and 1.83 metres containing 0.93 percent copper, 3.1 g/t gold and 12.34 g/t silver. Surface rock samples from the property include one metre containing 3.49 percent copper, 7.29 g/t gold and 46.5 g/t silver, and subcrop and boulders have returned values up to 2.17 percent copper and 5.35 g/t gold and 0.528 percent copper and 2.55 g/t gold. Between 2007 and 2008, a three dimensional Induced Polarization (3D IP) geophysical survey was conducted over the property that identified a compelling bulk tonnage target located south and southeast of historical surveys and drilling. This positive 3D IP anomaly remains open in extent.
JLR entered into the Agreement with Happy Creek for JLR to earn up to a 65% undivided interest in the Property over a period of four years. Under the Agreement, JLR has been granted, subject to an existing 2.5% net smelter return on the Hawk Property and an existing 2% net smelter return on the Grey Option, exclusive rights to acquire an undivided 55% legal and beneficial interest in the Property by making aggregate cash payments of $150,000, issuing an aggregate of 700,000 Shares to Happy Creek and incurring aggregate exploration Expenditures on the Property of $700,000.
Pursuant to the Agreement JLR has agreed to make the Cash Payment to Happy Creek as follows:
(i) $10,000.00 CDN upon execution of the Option Agreement;
(ii) $15,000.00 CDN on the date of the Final Exchange Bulletin;
(iii) $20,000.00 CDN on or before the first anniversary of the Agreement date;
(iv) $45,000.00 CDN on or before the second anniversary of the Agreement date;
(v) $60,000.00 CDN on or before the third anniversary of the Agreement date.
JLR has also agreed to issue an aggregate of 700,000 Shares to Happy Creek as follows:
(i) 100,000 Shares on the date of the Final Exchange Bulletin;
(ii) 100,000Shares on or before the first anniversary of the Final Exchange Bulletin;
(iii) 200,000 Shares on or before the second anniversary of the Final Exchange Bulletin;
(iv) 300,000 Shares on or before the third anniversary of the Final Exchange Bulletin.
JLR has agreed to incur Expenditures of $700,000 on the Property as follows:
(i) $200,000 on or before the first anniversary of the Final Exchange Bulletin ($100,000 of which is a firm minimum commitment);
(ii) $200,000 on or before the second anniversary of the Final Exchange Bulletin;
(iii) $300,000 on or before the third anniversary of the Final Exchange Bulletin.
In addition, JLR also has the exclusive option right to acquire an additional 10% interest in the Property (for an aggregate undivided 65% legal and beneficial interest in the Property if such option is exercised), by incurring additional exploration Expenditures of $500,000 on the Property on or before the fourth anniversary of the Final Exchange Bulletin.
Happy Creek is a British Columbia company whose common shares are listed on the TSX Venture Exchange (symbol: HPY). No new insiders will be created as a result of the Transaction and no finder’s fees are payable in regards to the Transaction.
No concurrent financing is planned. The proposed Qualifying Transaction does not involve any Non-Arm’s Length Parties.
There is no direct or indirect beneficial interest of any of the Non Arm’s Length Parties to JRL in the proposed Significant Assets. No Non Arm’s Length Parties to JRL are otherwise Insiders of Happy Creek. There is no relationship between or among the Non Arm’s Length Parties to JRL and the Non Arm’s Length Parties to the Qualifying Transaction.
According to the Policies of the Exchange and corporate laws, Shareholder approval of the Qualifying Transaction will not be required. A Sponsor will not been retained by JRL.
JLR also announces that it has abandoned a proposed transaction that was previously announced in a news release dated December 20, 2007, with the Inner Mongolia Tuoye Mining Development Co. China.
For further information, please contact:
X. Charlie Cheng, Chief Executive Officer and Director of JLR
J. Paul Sorbara M. Sc., P. Geo and a director of JLR is the qualified person who prepared or supervised the preparation of the information that forms the basis for the written disclosure relating to the Property in this news release.
ON BEHALF OF THE BOARD OF DIRECTORS
“X. Charlie Cheng”
X. Charlie Cheng, Chief Executive Officer, Director
Completion of the transaction is subject to a number of conditions including but not limited to, Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.