| Solomon Reports Decision in Mongolian Court Action |
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Court Finds Mongolian Government Agencies Violated Law by
Cancelling Solomon Licence Applications and Attempting to Issue Disputed Tenures to Areva Subsidiary Armstrong, B.C. - Tuesday, November 3rd, 2009. Solomon Resources Limited (SRB: TSX-V) is pleased to announce that it has received a favourable ruling from the Administrative Court of Ulaanbaatar in response to a Statement of Claim filed by the Company against the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) and the Mongolian Cadastral Office. Solomon filed a Statement of Claim with the Administrative Court on January 22nd, 2009 seeking injunctive relief from:
Solomon President and Chief Executive Officer Randy Rogers notes: "This is an important milestone in our efforts to protect the Company's uranium interests in Mongolia. We have expended a significant amount of resources to date in this project, and it is imperative that we have security of tenure as we look for purchasers or joint venture partners for our Baruunbaayan Project." Background: Solomon conducted an extensive surface exploration and diamond drilling program during 2007 and 2008 in the Cretaceous Ooshin Govi Basin of south-central Mongolia to follow up Soviet-era airborne spectrometer anomalies in a favourable geological environment. In total 31 diamond drill holes totalling 6457.95 meters were completed on this project at a cost of approximately $US 2,500,000. The Solomon tenures, known as the Baruunbayan Property, are located approximately 650 kilometers south of Ulaanbaatar and 135 kilometers north of the Chinese border.  In April of 2007, Cogegobi applied for uranium exploration licences for the ground between the Duulan Uul deposit and the Solomon tenures. In July of 2007, the Mongolian Cadastral Office ruled that the Cogegobi application was not in compliance with the Minerals Law of Mongolia and refused the application. Solomon applied for exploration licences for the vacant ground in August and October of 2007. In November of 2007, while the Solomon licence applications were being processed, the MRPAM chair attempted to illegally restore the original Cogegobi application - citing a history of cooperation between the Mongolian government, the government of France and "the Areva Group." Solomon sought the expertise of the Mongolian State Professional Inspection Agency (SPIA) which ruled in January 2008 that the restoration of the Cogegobi licences was illegal and ordered that the processing of the Cogegobi licence be suspended. The Mongolian Cadastral Office refused to comply with the SPIA ruling and on February 29th, 2008 Solomon filed a claim in State Administrative Court to prevent the ground being awarded to Cogegobi. On September 30th, 2008, Judge Tsogt ruled that the restoration of the Cogegobi licences was illegal and ordered the Cadastral Office to settle the Solomon licence applications according to law. The Cadastral Office approved two of the Solomon licence applications in December of 2008, accepted payment of the required licence fees and title was gazetted. The reinstatement of the Cogegobi licence application was halted, but while a third Solomon licence application for adjoining ground was in process, once again the Chair of MRPAM intervened and attempted to award the entire land package to Cogegobi and ordered the new Solomon licences revoked. Solomon filed a new Statement of Claim in the Administrative Court of Ulaanbaatar on January 22nd, 2009 seeking injunctive relief from the expropriation of the Company's tenures in Mongolia, the refusal of the Cadastral Office and the Chairman of MRPAM to issue mineral licences to the Company pursuant to the Order of Judge Tsogt and the attempt by the Cadastral Office and the Chairman of MRPAM to improperly transfer the expropriated licences to Cogegobi. The Court Ruling: On October 10th, 2009 Judge S. Munkhjargal of the Administrative Court of Ulaanbaatar ruled that the Mongolian Cadastral office clearly violated the rights of Solomon in not dealing with the various licence applications according to law. In particular, Judge Munkhjargal ruled that the various orders issued by the Cadastral Office and MRPAM attempting to cancel Solomon's licence applications and restore those of Cogegobi were illegal. Munkhjargal has ordered MRPAM (now called the Mineral Resource Authority of Mongolia) and the Cadastral Office to settle the applications of Solomon Resources Mongolia and Cogegobi according to the Mongolian law. There is a thirty day appeal period which expires November 9th, 2009. Re-registration of Exploration Licences: The New Mongolia Nuclear Energy Law On July 16th, 2009, the Mongolian Parliament passed new legislation to regulate the exploration, exploitation and development of uranium and other radioactive materials. The new law came into effect on August 15th, 2009. The Nuclear Energy Law gives the Mongolian government the right to take ownership without payment of not less than 51% of the shares of a project or joint venture if the uranium mineralization was discovered by state funded exploration, and not less than 34% if state funding was not used to find the mineralization The law gives the State Administrative Authority the responsibility to implement and enforce state policy on the exploration and development of deposits of radioactive minerals and nuclear energy, including the power to grant, suspend or revoke any licences granted pursuant to the Nuclear Energy Law. The Nuclear Energy Law mandates that licences be obtained to conduct exploration for and production of radioactive minerals. To obtain an exploration licence an applicant must conduct its activities in a transparent manner, have the financial resources to support exploration and reclamation, conduct responsible programs, and have demonstrated mining experience. Exploration licences will only be issued to applicants that meet the conditions set out in the Nuclear Energy Law, and agree to accept the state ownership of the required percentage of shares. The Mongolian Parliament also passed enabling legislation regarding the re-registration of existing exploration and mining licences. Existing licence holders must apply to the State Administrative Authority by Nov. 15th, 2009 and comply with all of the conditions and requirements set out in the Nuclear Energy Law, including acceptance of the state's 51% 34% share participation in the licence holder. Any licences that are not reregistered as required by the November 15th deadline will automatically be suspended. Solomon has now filed the requisite applications to re-register its existing exploration licences. Rogers observed: "We have had excellent cooperation with the staff at the State Administrative Authority in processing our licence re-registrations, and to some extent this process is no different than the licence revocations and re-registrations that occurred in July of 2005. Mongolia remains a democracy in transition, and while we acknowledge that a certain amount of legislative change is required to support that orderly transition it must be stressed that security of tenure is absolutely imperative for western investors to continue to support mineral exploration in Mongolia." Recent Political Developments in Mongolia: On October 28th, 2009 Mongolian Prime Minister S. Bayar announced to the Mongolian Parliament that due to reasons of health he was unable to continue in elected office and that his resignation was effective immediately. The Mongolian People's Revolutionary Party (MPRP) immediately nominated Minister of Foreign Affairs S. Batbold as the new Prime Minster and Batbold was sworn in on the following day. "It remains to be seen what impact the election of the new Prime Minister will have on the future of mining and exploration investment in Mongolia," Rogers commented. "There is a need for clarity and strong leadership in this turbulent time as a number of Mongolian mineral projects are on hold awaiting permits and development agreements." "What is very certain is that the Cadastral Office and the Mineral Resource Authority of Mongolia have an opportunity in the wake of Judge Munkhjargal's court order with regard to Solomon's licence applications to demonstrate to western exploration and mining companies that these agencies are truly subject to the rule of law. Accountability and transparency under the rule of law are the cornerstone of the future of mineral sector development for the Mongolian people." Corporate Developments: Solomon's geological staff continue to evaluate the results of the past season's geological, geophysical and geochemical exploration program at the Bonanza-Sitka Gold Project in coastal British Columbia and await assay results from the diamond drilling program completed at the Cry Lake Gold Project in northwestern British Columbia. Plans are underway for the 2010 field season which will include preliminary geological, geochemical and geophysical exploration at the newly acquired 10 Mile Creek Gold Project in the highly prospective White Gold district southwest of Dawson City in the Yukon Territory (Solomon news release September 22nd, 2009.) The staking rush prompted by promising drill results at Underworld Resources Ltd.'s White Gold Property has seen an influx of exploration capital into this camp, and recent work by the Yukon Geological Survey will likely encourage that trend to continue well into 2010. Solomon's Ten Mile Creek option is uniquely situated in an area with a known placer gold provenance and five mineralized zones have been identified to date. Rogers stated: "We have raised a total of $511,500 in flow through capital over the past several weeks to finance our ongoing Canadian projects, and continue to seek out new opportunities to enhance shareholder value." About Solomon Resources Ltd.: Solomon Resources Ltd. is a Canadian public company focused on the acquisition, exploration and development of quality mineral properties worldwide. Solomon is managed by a proven team of exploration geologists involved with the discovery and/or development of a number of significant deposits in the world, including the Snip, Eskay Creek, and Brewery Creek deposits in Canada; the Segala gold deposit in Mali; the Chimney Creek, Mule Canyon, Ruby Hill, Mesquite, and Ortiz gold deposits in the United States, the Gosowong deposit in Indonesia and the Cadia East deposit in Australia. Solomon is currently focused on the exploration of gold projects in British Columbia and the Yukon Territory, a tin project in Alaska and uranium projects in Mongolia. Solomon's shares trade under the banner SRB on the TSX Venture Exchange (TSX-V). For additional information visit Solomon's website at www.solomonresources.ca or contact: Randall S. Rogers, President and Chief Executive Officer Phone: 250-546-4772
Tollfree: 1-866-831-6666
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accept responsibility for the adequacy or accuracy of this release.
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