Appleton Exploration Inc. Revises Chile Property Agreement
June 30, 2008 - Vancouver, British Columbia. Further to its news release of March 4, 2008, whereby Appleton Exploration Inc. (TSX-V: AEX) announced that it had entered into a letter of intent for the purpose of acquiring the Chilean subsidiary of ProElement Resources Corp. (“ProElement”), Appleton has now entered into an assignment agreement (the “Agreement”) on the Julia and Perth/Caliza properties in Region III of Chile, terminating the original agreement dated March 4, 2008.
Under the terms of the Agreement, Appleton will earn a 100% interest, subject to 2% Net Smelter Return (NSR) royalties in the properties by making cash payments directly to the Chilean vendors of the respective properties totaling US$2,059,000 and by issuing 2,000,000 common shares to ProElement over two years under the following schedule, subject to TSX Venture Exchange approval:
- $100,000 payable on or before the date of signing of this agreement;
- $509,000 on or before the first anniversary of the Effective Date; and
- $1,450,000 on or before the second anniversary of the Effective Date.
- 1,000,000 common shares of Appleton issuable on or before the date that is the later of 5 business days from the Effective Date or the date of TSX Venture Exchange Approval;
- 500,000 additional common shares of Appleton issuable on or before the first anniversary of the Effective Date; and
- 500,000 additional common shares of Appleton issuable on or before the second anniversary of the Effective Date.
The cash payments are directly tied to the various underlying property agreements negotiated by ProElement with the Chilean Vendors. Should any of the properties be dropped, the cash payments will be adjusted accordingly.
Two of the three parcels comprising the Julia property are subject to 2% NSR royalties. Appleton can purchase these royalties in their entirety for an aggregate consideration of $4 million at any time within the next 72 to 84 months from the date of the option agreement. The third Julia parcel has no NSR associated with it. The two Perth/Caliza parcels are subject to 2% NSR royalties. Appleton can purchase the entire royalty of one parcel for $100,000 at any time within the next 36 months. The NSR royalty on the sec ond parcel has no buyout provision.
The Agreement is subject to a title opinion in a form acceptable to Appleton confirming that ProElement has good and marketable title to the Properties.
Technical due diligence on the properties has been carried out under the direction and supervision of Steve Butrenchuk, P.Geol., an independent Qualified Person as defined in National Instrument 43-101. The due diligence program consisted of preliminary mapping and verification sampling. QA/QC protocols of standards and blanks were incorporated in the sampling program. Assaying was completed by Acme Analytical Laboratories S.A. in Santiago, Chile.
The Julia property hosts agglomerate-hosted copper mantos. Artisanal workings 4.5 kilometres apart are located on copper mantos within an 8 kilometre long continuous, agglomerate – lapilli tuff unit.
Enami (the exploration arm of Chile’s national copper company) examined the property in 1970, completing geological mapping and drainage and contour soil sampling. This soil sampling shows elevated copper values down slope of the agglomerate – lapilli tuff along the entire 8 kilometre length of the unit tested by Enami. This program also showed elevated copper soil values associated with additional agglomerate – lapilli tuff units higher in the volcanic sequence.
Historical chip and grab sampling returned values ranging from 1.37% to 5.19% total copper. Appleton verification rock chip and rock grab sampling of the mantos returned values ranging from 0.79% to 4.47% copper, with 21 of the 26 samples returning values in excess of 1% copper. Sampling concentrated on a 1 kilometre long manto near the northern end of the agglomerate –lapilli tuff and a 1.8 kilometre long manto in the central part of the property. Further exploration may show these two mantos are in fact one continuous manto.
The Perth/Caliza property hosts iron oxide copper-gold (IOCG) vein swarms within a metamorphic terrain proximal to a granite batholith. Artisanal workings are found throughout the area. Historic grab rock sampling returned values ranging from 0.01 to 10.7 grams per ton gold and 0.02% to 1.7% copper. Appleton verification rock chip and rock grab sampling returned values ranging from 0.04 gpt to 13.8 gpt gold and 86 ppm to 10,000 ppm copper (0.009% to 1%). One sample returned a value of 57.4 gpt gold. Fourteen of the 83 samples taken returned values greater than 10,000 ppm copper (> 1% Cu). Copper assays for these fourteen samples are pending. Cobalt values ranged from 20 to 2000 ppm.
On Behalf of the Board of Directors,
“R. Tim Henneberry”
R.Tim Henneberry, P.Geo.
President and CEO
For further information, please contact:
Tim Henneberry: (604) 694-0741
For Investor Relations Information contact:
Contact Financial Corp.
604.689.7422 Toll Free 1.877.689.7411
R. Tim Henneberry, P.Geo. , President, CEO & Director of the Company, is the Qualified Person as defined in
National Instrument 43-101, who has reviewed and approved the technical content of this news release.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.