Bayswater Enters Into Agreement with Stornoway to Explore
Diamond Targets at Itza Lake Property, Nunavut
Vancouver, BC, July 10, 2007 ─ Bayswater Uranium
Corporation (TSX-V: BAY) is pleased to announce the
Company has entered into an agreement with Stornoway Diamond Corporation (TSX: SWY) to explore
Bayswater�s 430,738 hectare (1,064,353 acres) Itza Lake property for diamonds.
Located 80 kilometres northwest of the hamlet of Baker Lake, Nunavut, marginal
to the North Thelon Basin, Itza Lake�s diamond potential was recognized late
last year through an airborne geophysical survey that identified a number of
circular, magnetic features, similar to those associated with kimberlite pipes,
the primary host rock for diamonds. As the survey covered only about 20% of the
current property, which was expanded in early 2007, there is strong potential to
locate further kimberlite targets. The agreement with Stornoway enables
Bayswater to focus on uranium exploration at Itza Lake while benefiting from the
property�s diamond potential.
Under the terms of the Letter Agreement, Stornoway
can earn a 60% interest in the diamond rights at Itza Lake by issuing $75,000
worth of Stornoway shares to Bayswater and incurring $4,000,000 in exploration
expenditures over five years � a minimum of $500,000 must be spent before
September 1, 2008. Furthermore, Bayswater will receive 25,000 shares of
Stornoway or $40,000 in cash, at Stornoway�s election, for each geographically
distinct, in-situ kimberlite body, up to a maximum of ten bodies, identified on
the property. Bayswater will receive a further 50,000 shares or $200,000 in
cash, at Stornoway�s election, for each kimberlite which returns greater than 75
carats per hundred tonnes (based on diamonds recovered on a 0.85 mm square mesh
sieve) from a minimum one tonne sample.
Upon Stornoway earning its 60% interest, Bayswater
has thirty days to elect to form a joint venture whereby Stornoway will
contribute 60% and Bayswater shall contribute 40%, of all future expenditures on
the property. Provided Stornoway earns a 60% interest and Bayswater elects not
to form a joint venture within thirty days, Stornoway has a further thirty days
to elect to proceed to earn a further 20% interest in the diamond rights to the
Itza property (bringing its total property interest to 80%) by funding all work
towards the completion of a bankable feasibility study on the property. Provided
Stornoway earns an 80% interest in the diamond rights to Itza, the partners
shall enter into a joint venture whereby each partner will contribute its
pro-rata share of all future expenditures on the property.
George Leary, President of Bayswater states, "This
partnership enables Bayswater to increase Itza�s value while keeping our
exploration efforts focused on the property�s excellent uranium potential. It
also serves as a deal model for our other properties where we also have
discovered potential diamond targets including the Central Mineral Belt in
Labrador, and in the South Thelon Basin." Added Mr. Leary, "As a well financed
diamond explorer with extensive experience in the Arctic, Stornoway makes an
ideal partner to explore and develop the diamond potential of the Itza Lake
properties."
Eira Thomas, CEO of Stornoway comments, "We�re
delighted to have the opportunity to explore for diamonds at Itza Lake. The
initial anomalies identified by Bayswater�s first survey are attractive targets;
since only a portion of the property has been covered, there is excellent
opportunity to find additional targets through more extensive detailed airborne
surveys."
Bayswater�s large Itza Lake property is comprised
of a continuous land package consisting of 1,024,353 acres owned 100% by Bayswater and a 40,000 acre permit area held under the Canada Uranium Joint
Venture with Strongbow Exploration Inc. (TSX-V:
SBW).
The land package is located close to diamond company De Beers� land
holdings in the region.
A property map showing the magnetic clusters can
be viewed at http://www.bayswateruranium.com/i/misc/Itza-Kimberlites.jpg.