VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 11, 2011) - Kenai Resources Ltd. ("Kenai") (TSX VENTURE:KAI) is pleased to announce that it has discovered numerous artisanal workings along strike from the area of known high grade mineralisation mainly to the east and south-east of the current trenching area. The artisanal workings are variable in size, with a maximum depth of 10 to 15 metres below surface. The workings occur over an area of 500 metres by 200 metres and are coincident with a chargeable geophysical anomaly indicative of sulphide bearing alteration. Float material observed proximal to the workings comprises oxidised quartz fragments and altered intrusive rocks.
Artisanal workers have been active in the area of Sao Chico for 25 to 30 years constructing numerous shafts to approximately 15 metres below surface on oxidised vein material. High grades were recognised on one of numerous shafts and this led to the focus of exploration in the second half of 2010 on this structure, over an area of 900 metres east-west by 300 to 500 metres north-south, where 23 trenches were excavated. The oxidised upper 10 to 15 metres of this vein structure is believed to be amenable to gravity recovery. There has been no drilling on the property hence trenching along strike is the only source of data relating to grades in the area of forthcoming small scale gravity plant operations. Gold grade and vein width vary in short distances along strike and down dip and display a nugget effect, resulting in difficult estimation of gold grades.
This discovery has highlighted further the excellent potential for a bulk tonnage, near surface target along with narrow but high grade vein targets. Exploration of the bulk tonnage target will continue with surface trenching and scout drilling. Other geophysical anomalies exist in the area; however the geophysical survey currently covers an area of only 350 metres by 350 metres and needs to be extended across the entire licence.
Kenai President and CEO, Greg Starr, comments, "Kenai is very pleased with results of the exploration work on site over the past few weeks, exposing new highly prospective areas of old workings outside the prior trenching area. We await assay results from recent underground sampling. Kenai is also preparing for an initial 2,500 to 3,000 metre program of core drilling, along the lines shown in the plan prepared by our consulting geologist group. We also look forward to the commissioning of the gravity plant now being installed at Sao Chico in the next several weeks."
As shown on the attached figure (http://media3.marketwire.com/docs/kai211m.pdf), the trench intersections of gold-bearing vein structures extend over several hundred metres. Several sub-parallel vein structures have been sampled, with vein thicknesses varying from less than one centimetre to three metres. From the trenching and sampling undertaken since August 2010, it is estimated that the aggregate vein thickness over the currently identified one kilometre strike length is up to around five metres.
About Sao Chico
The project is more completely described in Kenai's NI 43-101 Technical Report on the project, details of which were contained in Kenai's news release of January 20, 2011. It has since been filed on SEDAR and on Kenai's website at www.kenairesources.com.
The NI 43-101 report was prepared by Exploration Alliance Ltd. ("EAL"), an independent geological consultancy. Mr. Andrew Tunningley, Principal Exploration Geologist of EAL, is a Qualified Person within the meaning of NI 43-101 and is the primary author of the Sao Chico Technical Report.
Highlights of exploration to date include high grades (up to 348 g/t gold over 1 metre) from underground channel sampling in sulphide ore, and discovery of a previously unidentified area of artisanal workings over an area of 500 metres by 200 metres, with coincident geophysical anomalies.
Sao Chico is located in the Amazonian Craton, which is divided into the Guyana Shield (north) and the Guapore Shield (south). The Amazonian Craton hosts numerous large gold deposits including Las Cristinas (32 Moz), Omai (4 Moz), Rosebel (14 Moz) and Nassau (>3 Moz). The Amazonian Craton was separated from the West African Craton; hence analogies to the shear hosted deposits in West Africa can also be drawn.
Sao Chico is within the Tapajós Mineral Field(1) in central-northern Brazil, hosted in the same suite of intrusive rocks as the nearby Tocantinzinho. Eldorado Gold Corporation has a project within the Tapajos district (according to their website) that contains a NI43-101 compliant Measured and Indicated Mineral Resource of 2.1 Million ounces of gold. Palito (Serabi Mining plc, an AIM-listed company) is a vein hosted underground mining operation with extraction by open pit of the upper portions of the deposit. Mineralisation at Tocantinzinho presents as disseminated gold bearing sulphide and has similarities to mineralisation styles observed in the newly discovered area of workings at Sao Chico.
The foregoing technical information about exploration at Sao Chico, including the appended plan, has been prepared by EAL.
Only limited exploration work has occurred outside of the 50 hectare area of historic workings and the wider 1416 hectare area of Exploration License AP12836 requires extensive grass roots exploration to discover the true potential. The agreement between Kenai and Gold Anomaly Ltd allows existing application areas external to AP12836 to be added to the licence package giving Kenai the benefit of a larger tenement position under option.
Details of Kenai's investment in the Sao Chico project can be found in its release dated 21 September, 2010.
About Kenai Resources:
Kenai is a Canadian company focused on precious mineral project exploration and development, towards early significant gold production. In addition to the Sao Chico gold project in Brazil , Kenai is also involved in exploration of the wholly-owned Quartz Mountain and Hope Butte gold epithermal gold projects in South-Eastern Oregon, both located in Malheur County, close to the Oregon border with Idaho. Kenai's current indicated and historical gold resources from the two Oregon projects are summarized as follows:
- For Quartz Mountain, resources above a 0.34 g/t cutoff with silver converted to gold equivalent using a ratio of 49.5:1 silver to gold. Metallurgical recoveries were not considered. Indicated resources are as reported in an independent November 2006 NI 43-101 report, posted on SEDAR at that time.
- The Hope Butte resources are considered historic in nature, do not comply with current NI 43-101 standards, have not been verified by the Company and therefore should not be relied upon. It is uncertain if further exploration will result in the discovery of an economic mineral resource.
On behalf of the Board of Directors of Kenai Resources Ltd
Greg Starr, President and CEO
Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed and elsewhere in the company's periodic filings with Canadian securities regulators. The economic viabilities of the resources estimates discussed in the release have not been established and may not be. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The company does not assume the obligation to update any forward-looking statement.
The technical content of this news release has been reviewed by Kenai's Vice President Technical Services, Neil Cole, who has sufficient experience which is relevant to the style of mineralization under consideration and to the activity which is being undertaken and planned to qualify as a Qualified Person under NI 43-101. Mr Cole, who is the technical person responsible for this news release, has verified the technical data disclosed in this release, including references to Kenai's other projects and planned exploration and operational activities, and the sampling of the gold-bearing reef structures. This news release has been reviewed and approved by Mr Tunningley of EAL who has consented to the inclusion in this release of such technical information in the form and context in which it appears.
(1) The Tapajós field was the site of the biggest gold rush in Brazilian history in the late 1970's and 1980s when approximately 500,000 garimpeiros (artisanal miners) rushed to the area to exploit extensive areas of newly discovered alluvial gold. Approximately 20 to 30 million ounces of gold (unofficial figures) were produced from these operations before the easily won alluvial gold deposits were largely depleted.
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