| ||December 16, 2004|
Abacus Forms Subsidiary To Realize Potential Of Niblack Project
The Board of Directors of Abacus Mining & Exploration Corp. (the "Company") are pleased to announce a proposed arrangement to reorganize the Company's mineral property assets in an effort to maximize shareholder value. Specifically, the Company's wholly owned Niblack property, located on Prince of Wales Island in southeast Alaska, will be transferred into a new company, incorporated under the name Niblack Mining Corp. ("Niblack Mining"). Under the terms of the arrangement, Abacus shareholders at record on closing of the arrangement will receive one share of Niblack Mining for every four Abacus shares held. Concurrently, Niblack Mining has also planned a prospectus financing to provide working capital and to fund a Phase I $500,000 drill program. Thereafter, Niblack Mining will apply to have its shares listed on the TSX Venture Exchange.|
Mr. Douglas Fulcher, President of Abacus states, "We are very excited that our shareholders can realize the full value of the Niblack property. Until now the property has not been recognized in the share price of Abacus. Abacus will now be able to devote all its effort towards the advancement of the Afton project, while seeing the Niblack project developed under a new corporate structure and company name. The 2005 exploration year should be exciting for both companies."
The Niblack property is a copper-gold-zinc-silver rich volcanogenic massive sulphide prospect that was acquired from Barrick Gold Corporation in 1995. The Company successfully advanced the project from reconnaissance drilling to an advanced exploration prospect that delineates a preliminary mineralized resource of 2.78 million tons grading 0.09 oz/t gold, 1.17 oz/t silver, 1.71% copper, and 3.22% zinc. The resource is open along strike and at depth and offers tremendous potential for expansion. Dr. Giles Peatfield, P. Eng, a qualified person under National Instrument 43-101, has completed an updated report the Niblack property that has been filed on SEDAR. Dr. Peatfield recommends a two-phase drill program totaling $2.0 million.
Niblack Mining will be funded by a prospectus financing on terms that are yet to be determined. Initial capital has been provided by a $300,000 loan from Abacus (completed), which will be convertible by Abacus into Niblack Mining shares and warrants at a conversion price equal to the planned prospectus offering price. Abacus will be issued approximately 1,000,000 shares of Niblack Mining as a bonus for the foregoing loan and to provide an initial measure of control over the direction of Niblack Mining. On completion of the reorganization and prospectus financing, the Company will hold approximately 6.5% of Niblack Mining, the Abacus shareholders will hold an estimated 61%, and the prospectus purchasers will hold the remaining 32.5%.
The proposed reorganization is subject to shareholder approval by resolution approved by 66 2/3 % of the votes cast. The Company expects to present the matter to shareholders at an extra general meeting to be held in March, 2005. The Company anticipates that the reorganization and listing of Niblack Mining to be completed shortly thereafter. The reorganization is also subject to approval of the Supreme Court of British Columbia and to acceptance by the TSX Venture Exchange. Further particulars will be announced in due course.
On Behalf of the Board,
ABACUS MINING AND EXPLORATION CORPORATION
The TSX Venture Exchange has not reviewed and does not accept the responsibility for the adequacy or accuracy of this news release.
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