Virginia Energy Benefits from Investment in Boss Power
|Oct 20, 2011 ||
Virginia Energy Resources Inc. (TSX.V:VAE) is pleased to report a positive outcome in the lawsuit by Boss Power Corp. (TSX.V: BPU) against the Province of British Columbia for the deemed expropriation of the Blizzard uranium property. The Province has agreed to pay Boss Power Corp. $30 million plus taxable costs and disbursements in return for the surrender or transfer of the Blizzard Mineral Claims to the Province. As a result, the trial of the lawsuit in British Columbia Supreme Court will not proceed.
Virginia Energy Resources ("Virginia Energy") owns 27,250,000 shares of Boss Power Corp., which represents 37% of the shares outstanding in that company. If the 37% interest in Boss Power Corp. were valued according to Virginia Energy's interest in the cash settlement of $30 million, it would add approximately $12 million to Virginia Energy's liquid asset holdings.
Virginia Energy currently has cash of $2.3 million and liquid assets with a market value of $2.6 million, excluding the company's interest in Boss Power Corp. Since Virginia Energy's current market capitalization is approximately $19 million it seems that almost no value is ascribed to either Virginia Energy's exploration assets in Saskatchewan and Quebec or its 29.4% interest in the Coles Hill uranium property. Alternatively the market is not ascribing any value to the company's cash and liquid assets.
Virginia Energy's largest investment is the 29.4% stake in a private company, VA Uranium Holdings, Inc., which controls the Coles Hill uranium property. This private company is financially secure with net cash of $6.0 million and it also owns a land package purchased for $8.6 million.
Coles Hill is considered to be one of the largest undeveloped uranium deposits in the United States. It has a measured and indicated resource of 119 million pounds of U3O8 (98.7 Mt at 0.060 percent U3O8 at a cut-off grade of 0.025 percent U3O8), including a higher grade zone of 77.4 million pounds of U3O8 (37.7 Mt at 0.103 percent U3O8 at a cut-off grade of 0.050 percent U3O8) based on an April 29, 2009 National Instrument 43-101 Technical Report prepared for the Company by Behre Dolbear and Company Ltd., Marshall Miller and Associates Inc., and PAC Geological Consultants Inc. (Dr. Peter Christopher, P.Eng.). This report is available on SEDAR and on Virginia Energy Resources' website.
The National Academy of Science (NAS) has almost finished with its study on the safety of a modern uranium mining industry in the state of Virginia. The study appears on schedule to be completed by December 1, 2011. Pending a positive outcome from the NAS study, the Virginia state legislature would then be in a position to consider lifting the moratorium on uranium mining in Virginia during the January 2012 legislative session, which would have positive implications for the Coles Hill project.
On Behalf of the Board of Directors
VIRGINIA ENERGY RESOURCES INC.
Walter Coles Jr., President & CEO
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future results, events and objectives could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include exploration and other risks detailed from time to time in the filings made by the Company with securities regulators.
For further information contact:
Walter Coles, Jr., President/CEO or Tony Perri - Investor Relations, Manager
Suite 611, 675 W. Hastings Street Vancouver, British Columbia, Canada V6B 1N2
Tel: (604) 669-4799