TORONTO, ONTARIO--(Marketwire - Aug. 23, 2007) -
(All amounts in Canadian $)
LEXAM EXPLORATIONS INC. (TSX VENTURE:LEX)(OTCBB:LEXEF) is pleased to announce financial results for the second quarter 2007, including an update on the Otish Uranium Project in Quebec, Canada, and the Baca Oil and Gas Project in Colorado, USA.
SECOND QUARTER & SUBSEQUENT HIGHLIGHTS
- $12 Million Net Profit Due to Nevada Property Sale to Rubicon Minerals;
- Otish Uranium Exploration Begins & Land Position Increased From 170,838 to 205,400 Acres;
- 3D Seismic Survey Confirms Gas Potential at Baca & Environmental Assessment Study Commenced to Advance Project.
FINANCIAL HIGHLIGHTS & RESULTS
During the second quarter Lexam finalized the sale of its Nevada properties to Rubicon Minerals Corporation, which generated a pre-tax unrealized gain of approximately $19 million. The sale was designed to strengthen Lexam's financial position and to allow the Company to accelerate its exploration programs. In exchange for the Nevada properties, Lexam received approximately 8.6 million shares of Rubicon. When the transaction was announced Lexam's Rubicon shares had a market value of $0.70. Since then Rubicon's shares have increased to $1.75 (August 23, 2007 closing price).
Due to new accounting standards adopted by Lexam, the Company's Rubicon shares will be reported at their fair market value. Lexam expects its future financial results to experience greater volatility because of this new accounting treatment.
For the second quarter Lexam reported a net profit of $11,967,112 or $0.25 cents per share, compared with a loss of $120,128 or nil per share in the second quarter, 2006. The large increase in profit is due to the Company's Nevada property sale.
At the end of the second quarter Lexam had working capital of $12.8 million compared to working capital of $3.6 at December 31, 2006. Lexam's working capital at the end of the second quarter did not include the proceeds which have now been received from the sale of the Jason base metal property in the Yukon. After tax, Lexam anticipates final proceeds from the Jason sale to equal approximately $500,000.
The complete second quarter report, including management's discussion and analysis, financial statements, and notes can be found on the Company's website at www.lexamexplorations.com and on SEDAR at www.sedar.com.
OTISH URANIUM PROJECT
EXPLORATION BEGINS - LAND POSITION INCREASED
The first phase of exploration on the Lexam-Golden Valley joint venture properties began early July and included airborne surveys over the project. Phase two of the exploration program recently commenced with ground crews focused on confirming earlier high grade uranium showings, including ground follow-up of radiometric anomalies as defined by the airborne surveys.
On April 5, 2007 Lexam and Golden Valley announced that the companies had increased their land position within the prospective Otish and Mistassini Basins to 170,838 acres making it the regions' largest land holder. The joint venture has since increased its total to 205,400 acres giving it a very dominant land position within these basins.
To view the Lexam-Golden Valley land position please see Appendix A.
To see Appendix A please view the following link: http://www.ccnmatthews.com/docs/appendixA.pdf
BACA OIL & GAS PROJECT
DRILL TARGETS CONFIRMED - NEW AREAS IDENTIFIED
On July 3rd, 2007 Lexam announced that the interpretation of the Company's 3D seismic survey for the Baca Oil and Gas Project in Colorado had confirmed earlier 2D derived targets for natural gas, in addition to identifying several new prospective areas for exploration.
The site of the first proposed well is located along a structural feature that measures 445 acres in size. A high structural position has been mapped on which the prospective Cretaceous section has been interpreted. The target area appears to have been a relative high throughout its geologic history, which Lexam's consulting geologist believe is a preferred setting for reservoir development, early hydrocarbon emplacement and porosity preservation.
The second proposed well is located along the same structure, but 7,500 ft. south of the first target. The structural closure of this prospect is estimated to be 410 acres in size.
Please see Appendix B for 3D rendering of proposed drill targets.
To see Appendix B please view the following link: http://www.ccnmatthews.com/docs/appendixB.pdf
COMPLAINT AFFECTING BACA OIL & GAS EXPLORATION
On May 25th, 2007 Lexam announced that the San Luis Valley Ecosystem Council (SLVEC) had filed and served a Complaint against the United States Fish and Wildlife Service (USFWS) in Federal District Court in Denver, Colorado. The SLVEC claims that the USFWS had not complied with the National Environmental Policy Act (NEPA) in connection with certain exploration activities carried out and proposed by Lexam on the Baca Oil & Gas Project.
Since the Complaint was filed, the USFWS, as part of its scoping process, has completed a public information meeting to exchange information and gather input and has now commenced an Environmental Assessment (EA) pursuant to NEPA.
Lexam has been informed that the study is expected to be completed by late 2007 or early 2008.
Michael P. Rosatelli, P. Geo. is a "Qualified Person" as defined in National Instrument 43-101 and is responsible for the technical information related to uranium exploration presented in this news release.
Neil Hoey, P. Geo. is a "Qualified Person" as defined in National Instrument 51-101 and is responsible for the technical information related to oil and gas exploration presented in this news release.
Lexam Explorations is a North America based energy exploration company. Lexam's shares are publicly traded on the TSX-Venture Exchange under the symbol LEX and OTC under LEXEF. The company is advancing the Baca Oil & Gas Project located in south-central Colorado, USA, which is 75% owned by Lexam and 25% by ConocoPhillips and has an option to earn 50% interest in Golden Valley Mines' Otish Basin Uranium Project located in Quebec, Canada.
Some of the statements contained in this release are "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forwardlooking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: ability to raise financing for further exploration and development activities; risks relating to estimates of reserves, deposits and production costs; extraction and development risks; the risk of commodity price fluctuations; political, regulatory and environmental risks; and other risks and uncertainties in the reports and disclosure documents filed by Lexam from time-to-time with Canadian securities regulatory authorities. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The complete second quarter report including management's discussion and analysis, financial statements and notes can be found on our Company's website at www.lexamexplorations.com and on SEDAR at www.sedar.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Lexam Explorations Inc.
Ana E. Aguirre
Manager, Investor Relations
(647) 258-0395 or Toll Free: 1-866-441-0690
(647) 258-0408 (FAX)