Press Release

Sprott Resource Corp. Announces US$50 Million Investment in Integrated Oil & Gas Driller


TORONTO, March 5, 2012 /CNW/ - Sprott Resource Corp. ("SRC" or the "Company") (TSX: SCP) announced today that it has invested US$50 million in Independence Contract Drilling, Inc. ("ICD"), a newly formed company that will provide land-based contract drilling services in the U.S. through a fleet of technologically advanced, newly constructed drill rigs.  SRC's investment was part of a US$100 million equity offering completed by ICD (the "Offering").   After giving effect to the Offering and certain concurrent transactions, SRC owns approximately 31.6% (basic) of ICD's outstanding common shares.  As part of its investment, SRC has the right to appoint one member to ICD's board of directors.

"We view our investment in ICD as an effective way to capitalize on the growth of unconventional oil and gas resource plays in the United States," said Kevin Bambrough, President and CEO of SRC. "As major international E&Ps focus on U.S. domestic oil and gas production from shale resource plays, we expect demand to be consistent and strong over the medium term for rigs of the type ICD will be building and contracting."

The senior members of ICD's management team, including Byron Dunn (CEO) and Steven Hale (President and COO), are all experienced oilfield service executives with an average of 25 years of industry experience, maintaining long-standing relationships with many leading E&P companies. ICD's management team has operated rig manufacturing companies and has successfully built, operated and sold other land contract drilling companies, including Bison Drilling, Bronco Drilling and Forrest Drilling.

Through its own fully staffed and integrated manufacturing facility located in Houston, Texas, ICD will manufacture and contract for service premium programmable alternating current ("AC") rigs designed to target longer-reach horizontal wells that are technically demanding and are more efficiently drilled by high-specification, programmable AC rigs that precisely control and monitor the drilling operation and wellbore geometry.  These AC rigs have "walking" capability to allow the rig to be quickly moved to a new drilling location on the pad without disassembling and reassembling the rig.  Currently, approximately 20% of the U.S. rig fleet features the programmable AC technology desired for unconventional drilling.

The greater efficiency of programmable AC rigs versus mechanical rigs and silicon controlled rectification rigs results in higher day rates and operating margins for programmable AC rigs.  Based on current industry margins and utilization rates, SRC believes that such rigs generate attractive returns on investment.  In addition, the increase in longer-term "take or pay" contracts provides more certainty of investment returns with respect to the build out of such rigs.

About Sprott Resource Corp.

SRC is a Canadian-based company, the primary purpose of which is to invest and operate in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting LP (SCLP), of which Sprott Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.  SRC invests and operates through Sprott Resource Partnership (SRP), a partnership between SRC and Sprott Resource Consulting Limited Partnership, an affiliate of SCLP which is the managing partner of SRP.

Advisory Regarding Forward Looking Information

This news release includes forward-looking information relating to expected rig demand, the expected future day rates and operating margins at which ICD will contract its rigs and the returns on investment of those rigs. Forward-looking information looks into the future and provides an opinion as to the effect of certain events and trends on the business of SRC. The forward-looking information contained in this news release is based on current expectations and various estimates, factors and assumptions including, among others: the current day rates being achieved in the marketplace, the current demand for rigs of the type ICD will be contracting, current oil and gas prices, current laws and regulations and current manufacturing costs for ICD's rigs.

All forward-looking information is inherently uncertain and subject to a variety of risks, uncertainties and other factors that may cause SRC's or ICD's actual results, performance or achievements to be materially different from those expressed or implied from such information, including: general economic, market and business conditions; fluctuation in market prices for petroleum and natural gas; fluctuations in foreign exchange rates; changes in laws and regulations; changes in the costs of inputs used to manufacture rigs, changes in labour costs and labour disruptions.

SRC has attempted to identify important factors that could cause its and ICD's actual results, performance and achievements to differ materially from those contained in the forward-looking information contained in this news release. However, there can be other factors that cause results, performance and achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on the forward-looking information contained in this news release. SRC does not intend, and does not assume any obligation, to update these forward-looking information contained in this news release except as required by law.