Saturn Minerals Inc. is pleased to announce that further to the Company's news release dated October 29, 2015 the Company had issued notice to its Joint Venture Partner as required by the Joint Operating Agreement (JOA) between the parties.
Under the terms of the JOA, the Joint Venture Partner had thirty (30) days to respond to the drilling notice, and now as the drilling notice period has elapsed without a commitment by the Joint Venture Partner, Saturn will assume 100% of the costs to drill the 9A-5-44-8W2 well. Additionally under the terms of the JOA, prior to drilling Saturn will pre-select five (5) contiguous sections (3,200 acres) to be earned by the drilling of the 9A-5 well. Upon completion Saturn will have earned a 100% interest in the selected acreage and the Joint Venture Partner will then retain a non-convertible gross overriding royalty of 1%.
Saturn has contracted with North Rim Exploration Ltd. and Axiom Exploration, Saskatoon, Saskatchewan to provide all logistical support and drill for the drilling program.
Unseasonably warm weather has delayed the drilling program from the Company's initial intended spud date of November 30. The Company tested the ground conditions on December 5 and determined that ground conditions were not ideal for moving heavy equipment to the well site. The Company will test the ground conditions again on December 11 as the near term forecast is for much colder weather. Should ground conditions be favourable the intended spud date is on or before December 15, with drilling to be completed within eight (8) days.
Saturn identified the well location in a 2D seismic program, which was designed to identify and confirm closure for potential light oil traps in the stacked Red River, Winnipeg and Deadwood Formations of the Northeastern Williston Basin. The data confirmed the anticlinal four-way closure of the drillable prospect at the Company's 120,000 acre Bannock Creek property.
The closure of this structure, which compares very favorably with existing producing light oil pools to the south of Bannock Creek and the validation of Saturn's exploration model has resulted in Saturn selecting this prospect as the Company's second exploration well which will be drilled and completed conventionally to a depth of less than 1,000 meters.
Saturn also announces that the Company has completed a non-brokered Private Placement by the issuance of 5,000,000 flow-through units (the "FT Units") at a price of $0.10 per FT Unit, subject to the approval of the TSX Venture Exchange ("TSXV").
Each FT Unit consists of one flow-through common share (the "FT Shares") and one-half of a non flow-through share purchase warrant (the "NFT Warrants"). Each whole NFT Warrant will entitle the holder to purchase one additional non flow-through common share, exercisable at a price of $0.15 per share for a period of 18 months from the date of issue of the NFT Warrant. The FT Shares will entitle the holder to receive the tax benefits applicable to flow-through shares, in accordance with provisions of the Income Tax Act (Canada).
The NFT Warrants are subject to an accelerated expiry if, at any time after an initial 4 month hold period expires, the closing price of Saturn's common shares on the TSX Venture Exchange (the "TSXV") exceeds $0.20 for any 20 consecutive trading days, in which event the holder will be given notice that the Warrants will expire 30 days following the date of such notice. The NFT Warrants may be exercised by the holder during the 30-day period between the notice and the expiration of the Warrants.
Saturn has agreed to pay a finder's fee totaling $30,000 to EMD Financial Inc., subject to the approval of TSXV.
Proceeds from the Private Placement will applied to further exploration of Saturn's Bannock Creek and Little Swan Oil & Gas properties in Saskatchewan, including the drilling of the Bannock Creek 9A-5 exploration well.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities.