HI HO SILVER AGREES TO ACQUIRE 100% INTEREST IN CARMI MOLYBDENUM PROPERTY July 23, 2008
July 23, 2008
Symbol: HIHO.CNQ
Frankfurt Exchange: H9T
NEWS RELEASE
HI HO SILVER AGREES TO ACQUIRE 100% INTEREST IN CARMI MOLYBDENUM PROPERTY
Hi Ho Silver Resources Inc. ("Hi Ho Silver" or "the Company") announces that it has entered into a letter agreement with St. Elias Mines Ltd. ("St. Elias"), whereby the parties have agreed that upon the issuance of 200,000 common shares of Hi Ho Silver to St. Elias, Hi Ho Silver will have earned a 51% interest in the Carmi Molybdenum property (the "Property") free and clear of all charges, encumbrances and claims, and upon such issuance St. Elias shall immediately take all necessary steps reasonably required by Hi Ho Silver to transfer an undivided 51% interest in and to the Property to Hi Ho Silver.
Pursuant to the letter agreement, St. Elias has also granted to Hi Ho Silver the exclusive right and option, exercisable only following the issuance of the said 200,000 common shares of Hi Ho Silver to St. Elias and subject to a 1.5% net smelter return royalty, to increase Hi Ho Silver's undivided beneficial interest in and to the Property from 51% to 100%, in consideration of Hi Ho Silver paying to St. Elias the sum of $750,000 in staged payments and issuing 3,500,000 common shares of Hi Ho Silver to St. Elias.
Hi Ho Silver has agreed, as a term of the option to acquire the remaining 49%, that in the event that Hi Ho Silver sells an interest or grants an option to acquire an interest in the Property to a third party, St. Elias shall receive a portion of the proceeds (cash and/or shares) realized from such sale of an interest or grant of an option payable to St. Elias either as a shareholder dividend or a direct payment. The amount St. Elias will receive shall be pro-rata in accordance with the percentage of shares that St. Elias owns of Hi Ho Silver on the date that the proceeds of the option or sale are received by Hi Ho Silver and shall be calculated on the actual amount received by (and not simply accrued to) Hi Ho Silver.
St. Elias has granted to Hi Ho Silver the exclusive right and option, exercisable for a 10 year period following the date of issuance of the 3,500,000 common shares of Hi Ho Silver to St. Elias referred to above, to purchase up to 1,750,000 of the 3,500,000 common shares at an exercise price of $1.00 per share.
The parties have also agreed to enter into a formal agreement that will incorporate the terms of the letter agreement and such further terms as the parties may agree upon. The letter agreement and the formal agreement may be subject to regulatory approval.
Hi Ho Silver is extremely pleased to have negotiated this new agreement with St. Elias as it allows us a greater flexibility to pursue a variety of options with respect to the Carmi property.
Hi Ho will continue to work with St. Elias Mines as a key strategic partner moving forward in its ongoing efforts to develop the Carmi project to its fullest potential. St. Elias will become the second largest shareholder of Hi Ho Silver and all ideas and input from St. Elias will be invaluable to Hi Ho for all future Carmi negotiations.
The property covers extensive molybdenum mineralization which typically occurs in skarns or porphyrys. Usually the porphyry deposits are much larger, and therefore more economic. The property encompasses 2,873 hectares (7,184 acres) and to date has been tested with 221 drill holes totalling nearly 100,000 feet with Hi Ho completing 33 drill holes along with 188 historic drill holes. An updated National Instrument 43-101 compliant outlining current resources calculations is forthcoming.
Fred Fisher, President and CEO states that a recent commodities report by the research firm CPM Group noted that Molybdenum price increases "will sustain for at least 2 years" due to supply deficits over the next two years. This trend in the expected prices for Molybdenum is partially supported by gradually rising capital expenditures, sharp increases in diesel prices, higher electricity prices in China and loftier freight charges (see http://www.steelguru.com/). With the expected ongoing strength of Moly prices and the pending 43-101 National Instrument Compliant Resource Calculation, we believe this agreement was a key strategic move forward in Hi Ho's corporate development.
For more information contact Fred Fisher, President & CEO and Isabel Alves and/or Paul Venning, Investor Relations at tel. # 905 602 4653 or via email at hihosilverinc@yahoo.ca or visit the Hi Ho Silver website at http://www.hhsr.ca/.
Signed,
HI HO SILVER RESOURCES INC.
"Fred Fisher"
Fred Fisher,
President & C.E.O.
The CNQ Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this document.
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