VANCOUVER, BRITISH COLUMBIA–(Marketwired – Nov. 5, 2014) – Saturn Minerals Inc. (TSX VENTURE:SMI)(FRANKFURT:SMK) (“Saturn” or the “Company”) announces that it has executed a Letter of Intent (“LOI”) with Bayhorse Silver Inc. (“Bayhorse”) whereby Bayhorse can earn 50% of Saturn’s 50% interest in the 253,920 acre EP-71, the Little Swan oil & gas prospect (“Little Swan”) in Saskatchewan’s northern Williston Basin.
Farm Out Terms
As per the terms of the LOI, Saturn and Bayhorse will enter into a Formal Agreement whereby Bayhorse will make equalization payments to Saturn totaling $600,000, issue 500,000 shares of Bayhorse to Saturn and assume Saturn’s 2014-2015 seismic costs on Little Swan for $230,000 as per the following schedule:
- A $50,000 non-refundable deposit to Saturn upon execution of the LOI (received)
- An installment payment of $150,000 payable within (10) ten business days of the TSX Venture Exchange (“TSX”) approval
- Issue 500,000 shares of Bayhorse Silver Inc. to Saturn within (2) two business days of TSX approval
- An additional $200,000 payment on or before 90 days after TSX approval
- A final $200,000 payment on or before 180 days after TSX approval
- Assume $230,000 of Saturn’s costs on the planned 2014-2015 seismic program, payable on or before January 30, 2015. The seismic program will be conducted and operated by Saturn.
Other than lands converted by drilling into an oil lease, Bayhorse must participate as to 25% of all ongoing geological or geophysical expenditures on the Farm-in Lands or forfeit its interest.
Saturn began acquiring mineral permits in provincial auctions and exploration activities in the northern Williston Basin in 2008 focused on coal. Saturn has drilled over 60 holes in the pursuit of coal reserves on its various properties, but also encountered frequent signs of oil and gas, primarily from rock samples. Saturn also observed instances of surface seepage/pooling of oil in mud pits while drilling.
In 2011, Saturn initiated aerial survey designed to test stratigraphic structures and identify potential oil traps. Aerial gravity-magnetic surveying is an efficient method to study wide-area subsurface structures of oil and gas basins in advance of more targeted and precise seismic exploration.
An aerial gravity-magnetic survey consisting of 1,600 line-km, with 300m spacing was undertaken in mid 2012 over the Little Swan lands. The results showed basement structures exceeding 1,000 meters in depth. The basement highs are already significant as they identify both structural traps for the Red River and stratigraphic traps against the basement faults and highs for the Winnipeg and Deadwood formations.
Initial seismic data acquired in 2013 and 2014 identified several basement structures on Saturn’s properties. Seismic surveys are used to determine the depth and orientation of rock formations to identify the most likely locations and target depths for drilling exploration wells. The Red River formation in the property areas contain an ideal reservoir with excellent porosity up to 20% Dolomite. The reservoir is over 75 meters thick and management believes it has excellent potential.
Commenting on the potential economic model of a prospective discovery in this part of the Williston Basin, Stan Szary, CEO of Saturn stated that, “the much lower costs of drilling a vertical well, and other associated benefits such as lower royalties applied to new discoveries, mean the netbacks on production from this area would be much higher than from deeper, non-conventional wells which require horizontal drilling and fracking.” He added, “the recent strength of the US dollar against the Canadian dollar also enhances the economic model for this area.”
About Saturn Minerals Inc.
Saturn Minerals Inc. (TSX VENTURE:SMI)(FRANKFURT:SMK) is a junior Canadian energy company advancing a portfolio of oil and coal properties in Saskatchewan and Manitoba. The Company has interests in 376,800 acres of exclusive oil & gas rights in Saskatchewan and is advancing a number of oil exploration projects. Saturn has also made three shallow bituminous coal discoveries since 2009 with coal seams ranging in continuous vertical thickness from 9 to 89 meters. Saturn has a strategic ownership in Inowending Exploration & Development Corp., a First Nations owned exploration and development company co-founded by Saturn with a consortium of Saskatchewan First Nations active in Canada’s prairie provinces.
Stan Szary, Chief Executive Officer
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