VANCOUVER, BRITISH COLUMBIA -- 05/16/08 --
Southwestern Resources Corp. (TSX: SWG) ("Southwestern" or the "Company") is pleased to announce that it has entered into an agreement (the "Agreement") to sell its indirect interest in the Boka Project to Hong Kong East China Non-Ferrous International Mineral Development Co., Limited (the "Purchaser").
Under the terms of the Agreement, the Company sold all of the shares of its indirect wholly owned subsidiary that holds a 90% interest in the Boka Project to the Purchaser in consideration of net proceeds of approximately U.S.$9.4 million and a 2.7% net smelter return royalty on gold production in excess of 6.5 tonnes.
Timo Jauristo, the Company's President and Chief Executive Officer, commented that: "This sale is an important step in our efforts to rebuild Southwestern. It will allow us to focus our business energy and resources on our properties in Peru. The nature and location of the Boka Project and issues surrounding the past work thereon, created significant challenges for the Company including, among other things, significant demands for capital and management time, maintaining adequate stakeholder relationships and risks associated with licensing, permitting and title and other country risks. As a result of these challenges, pending litigation and its current capital resources, the Company did not believe that it could adequately explore and develop both Boka and its Peruvian properties. Southwestern believes that focusing its exploration and development work on its Peruvian properties provides it with the best opportunity to enhance value for shareholders."
About Southwestern
Southwestern is a Vancouver-based mineral exploration company engaged in the identification, acquisition, evaluation and exploration of gold, silver and base metals mineral properties. The Company has a number of significant projects, including the Liam gold-silver project in Peru with Newmont Peru Limited. Southwestern is a reporting issuer in British Columbia, Alberta, Manitoba, and Ontario and trades on the Toronto Stock Exchange under the symbol SWG.
Forward-looking Statements
Statements in this news release that are forward-looking statements are based on the current expectations, beliefs, assumptions, estimates and forecasts about the Company's business and the industry and markets in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including but not limited to, the Company's access to additional capital to fund future activities, the loss of mineral properties or the inability to obtain mining licenses, the inherently risky nature of the Company's activities and its lack of experience in bringing an exploration property into production, its ability to repatriate any earnings, foreign exchange fluctuations, the political stability and economic uncertainty of those areas in which the Company carries on operations and the lack of infrastructure in those areas, title risks, the risks and uncertainties associated with joint ventures and the Company's reliance on third parties, statutory and regulatory compliance, the adequacy and availability of insurance coverage, the Company's dependence upon employees and consultants and fluctuations in mineral prices and other risks detailed in the Company's filings with the Canadian Securities Authorities.
These risks, as well as others, could cause actual results and events to vary significantly. The Company expressly disclaims any intent or obligation to update these forward-looking statements, unless the Company specifically states otherwise.
Contacts:
Southwestern Resources Corp.
Timo Jauristo
Interim President & CEO
(604) 669-2525
Southwestern Resources Corp.
David Black
Chair of the Board
(604) 669-2525
Website: www.swgold.com
