Calgary, Alberta – Graphite One Resources Inc. (GPH: TSX-V) ("Graphite One" or the "Company") announces that it has relinquished its option to acquire a 100% interest in the Kelly Creek property consisting of 105,280 acres (42,605 hectares) located on the Seward Peninsula, Alaska, 145 kilometres north of Nome effective as of May 24, 2012. The Company has decided to focus its efforts and capital on graphite and specifically the Graphite Creek Property.
Pursuant to an Option Agreement dated March 26, 2010 with a third party vendor (the “Optionor”) (please see the Company’s press release dated March 26, 2010) the Company acquired the option to purchase 100% of the Kelly Creek project at any time for a period of six years. Total consideration consisted of payments of US$1,500,000 million (of which US$100,000 has been paid) and expenditures of $2,150,000 (of which approximately $4,300,000 has been incurred) in exploration expenditures with the Optionor retaining a 5% net smelter return royalty. In conjunction with the relinquishment of the Kelly Creek Property Option the Company intends to write-off all capitalized balances of approximately $4,900,000 related to this project on its March 2012 interim financial statements.
The Company is now focused primarily on its Graphite Creek Property located at the Seward Peninsula of Alaska, 65 kilometres north of Nome. The 2012 exploration program has commenced at Graphite Creek with an airborne geophysical survey. The helicopter borne survey will be conducted by SkyTEM Canada Inc. (“SkyTEM”) and will comprise both magnetics and electromagnetics (SkyTEMs’ Dual-Moment, Time-Domain Electromagnetic (“TDEM”) System). The survey will be flown at 50 metre spaced lines and will total approximately 690 total line kilometres. The survey is part of an aggressive $4.5 million dollar exploration program at the Graphite Creek Property. The program will consist of prospecting, geological mapping, sampling and drilling along conductors delineated from the airborne survey and previously defined graphite-bearing schist. The goal of the 2012 exploration program is to move the Graphite Creek Project towards a National Instrument 43-101 compliant resource.