SILVER LAKE CLOSES PACIFIC CANADA POSTASH TAKEOVER

Silver Lake closes Pacific Canada Potash takeover

2011-06-10 15:02 ET – News Release

Mr. Balbir Johal reports

SILVER LAKE RESOURCES INC. COMPLETES ACQUISITION OF PACIFIC CANADA POTASH LTD. AND CLOSING OF $3,688,525 FINANCING

Silver Lake Resources Inc. has completed its acquisition of all of the issued and outstanding shares of Pacific Canada Potash Ltd. effective June 7, 2011, and a concurrent non-brokered private placement of $3.6-million.

Transaction summary

The acquisition was effected by way of a share purchase agreement among PCPL, Silver Lake and the shareholders of PCPL pursuant to which the holders of all of the issued and outstanding shares of PCPL sold their shares to Silver Lake in exchange for an aggregate of four million common shares in Silver Lake and aggregate cash payment of $225,000, and PCPL has become a wholly owned subsidiary of Silver Lake. Under the terms of the acquisition, Silver Lake must pay an additional $225,000 to the PCPL shareholders within six months. In addition, in connection with the acquisition, Minegate Resources received a finder’s fee of 214,062 common shares of Silver Lake.

Private placement

In connection with closing of the acquisition, Silver Lake completed a non-brokered private placement of 1,468,500 units at a price of 65 cents per unit and 3,645,333 flow-through units at a price of 75 cents per flow-through units for gross proceeds of $3,688,525. Each unit and each flow-through unit consisted of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at a price of 80 cents per share for a period of five years expiring June 7, 2016, subject to acceleration in certain events. In connection with the private placement, Silver Lake paid finders a cash commission equal to 8 per cent of the gross proceeds of the private placement and brokers’ warrants equal to 8 per cent.

The common shares and warrants issued under the private placement, and the common shares issued to Minegate Resources are subject to a hold period expiring Oct. 8, 2011.

Directors and officers of Silver Lake

In connection with the acquisition, Steven Khan and Jody Dahrouge have been appointed to the board of directors of Silver Lake, and Mike Blady has resigned as a director. The board of directors and the officers of Silver Lake are:

- Mr. Khan — chief executive officer and director;
- Mr. Dahrouge — senior vice-president, exploration, and director;
- Balbir Johal — executive chairman and director;
- Bryce Clark — director;
- Steven Butrenchuk — president;
- Verlee Webb — corporate secretary.

About PCPL

PCPL currently holds a 100-per-cent interest in the Provost potash property near the town of Provost, Alta. The property consists of two metallic and industrial minerals (MAIM) permits covering an area of 17,781 hectares. PCPL also holds a 50-per-cent interest, along with Grizzly Discoveries Inc., in approximately 185,000 hectares of MAIM permit applications surrounding the Provost property.

PCPL’s wholly owned Provost potash property and the adjoining Pacific/Grizzly lands are located within the Western Canada sedimentary basin (WCSB), a vast sedimentary basin extending from the southeast corner of Yukon to Southern Manitoba and south into the Northern United States. Potash in eastern Alberta and western Saskatchewan occurs in the Devonian Prairie evaporite formation, which consists of near flat-lying sequences of interbedded halite, sylvite, carnallite and clay, with minor anhydrite and dolomite. The potash usually occurs in the upper 60 metres of the formation (Holter, 1969) in four distinct members, separated by salt beds. The Prairie evaporite formation ranges in depth from 1,000 to 1,450 m below surface and does not outcrop at or near the properties. Approximately 10 drill holes completed for oil and gas exploration have penetrated the Prairie evaporite formation, either within the boundaries of the property or within several kilometres thereof. Of these, only the Provost No. 2 well, located within the southwest part of the joint-venture property, has previously been analyzed for potash, with between 4.03 per cent to 4.06 per cent potassium oxide across 11 feet from 4,610 to 4,622 feet depth. Several other wells, within both the Provost potash property and joint-venture property, have sufficiently high responses on gamma ray logs to indicate the presence of significant concentrations of potash. In a 43-101 technical report on the Eyehill Creek property (now partly within the Pacific Canada and Grizzly Discoveries permit applications), Klarenbach (2009) suggested that gamma ray responses from historic oil and gas wells in the area may indicate one-to-five-metre-thick potash beds with grades ranging from 15 per cent to 25 per cent K2O.

In 2009, PCPL commissioned Boyd Petrosearch of Calgary, Alta., to complete a 2-D seismic study on the Provost property. The study did not indicate the presence of any significant structures within the Prairie evaporite formation underlying the property. Structures such as large faults may result in the dissolution of potash beds or provide challenges to any future mining of a deposit.

PCPL recently commissioned Geotech Ltd. to complete a VTEM survey on the Provost property, which will provide additional information on the underlying property.

Steve Butrenchuk, PGeo, a qualified person for the purposes of NI 43-101, supervised the preparation of the technical information in this news release.

We seek Safe Harbor.

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