Shochiku has bought all Japanese rights to the horror mystery Needle from sales company Lightning Entertainment, and North American rights have gone to the Grindstone Entertainment Group, which will release the film through Lionsgate Home Entertainment.

“We are thrilled to have acquired this fresh and fun horror film which we believe is the perfect compliment to Lionsgate’s already strong home entertainment line-up for 2011,” said Grindstone’s head of acquisitions Stan Wertlieb in a statement.

“Apart from wanting to make a cool horror film, it has always been a goal of mine to make a movie good enough to be released in North American through Lionsgate, who are genre specialists, so this is pretty exciting,” said director John V Soto.

The story centres on a killer who uses an 18th century machine with supernatural powers to terrorise college students.

Ben Mendolsohn (Animal Kingdom) and John Jarratt (Wolf Creek) are in the cast along with many promising younger actors including Jessica Marais (from the Australian television hit Packed To The Rafters), Michael Dorman (Daybreakers, Triangle) and Tahyna Tozzi.

Needle is the second film made in Western Australia by Soto and his wife, producer Deidre Kitcher, with local investors.

Many territories have now been sold and negotiations are underway with an Australian distributor.