KOOTENAY AND FJORDLAND ENTER INTO
OPTION AGREEMENT ON SEVEN PROPERTIES IN SOUTHEASTERN BRITISH COLUMBIA
Vancouver, B.C. - Kootenay Gold Inc. (TSX.V:KTN) ("Kootenay") and Fjordland Exploration Inc.
(TSX.V:FEX) ("Fjordland") have entered into an option agreement
whereby Fjordland has the right to earn an undivided 60% interest in
seven individual claim groups (Big Kahuna, Slocanny Granny, Red Lobster,
Moly Pritchard, Big Smoke, MS Peg and GCP) (collectively known as the
"Kootenay Gold Claims") located in Southeastern British
Columbia in exchange for issuing an aggregate total of 7 million common
shares of Fjordland to Kootenay; and financing $7 million of exploration
expenditures on the properties within a four-year period. All terms of
this agreement are subject to approval by the TSX Venture Exchange.
The
Slocanny Granny, Red Lobster, Moly Pritchard and Big Kahuna properties
host similar mineralization and geology to the recent Eagle Plains and
Providence Capital discovery. They lie along the same Iron Mountain
structural zone where Eagle Plains and Providence Capital drill discovery
found two intervals of gold-bearing massive sulphide mineralization. Selected intervals
from Hole 10 include:
- 14.0
m @ 5.1g/t Au, 1.86% Pb, 2.1% Zn, 75.3g/t Ag (upper
sulphide interval)
- 56.5 m @ 1.9g/t Au, 0.44% Pb, 0.59% Zn,
21.5g/t Ag; elevated Cd,Sb,Sn,Bi,Cu (intensely altered, including
lower sulphide interval at Sullivan-time horizon)
The other three projects, GCP, MS Peg and Big Smoke all lie within the
Kimberly Gold Trend. GCP contains extensive anomalous gold mineralization
in breccias not unlike the Iron Mountain Fault discovery while MS Peg has
potential for high grade gold and the Big Smoke has massive sulfide
Sullivan type potential.
Click here to view a location
map of the option properties
The optioned properties total 21,222 hectares, in the Belt-Purcell
ranges, located adjacent to the Iron Range Project and within the 90-km
long northeasterly-trending Kimberley Gold Trend. This Trend is defined
by placer gold in streams, high angle, intersecting oblique-slip faults,
Fe-oxide, Fe-carbonate, sericite/quartz/pyrite/albite/tourmaline
alteration assemblages, numerous Au-Cu-Pb-Zn occurrences and IOCG (iron
oxide copper gold) affinities. Four of the claim groups in the Option
Agreement have had limited drilling activities and have new drill targets
currently permitted for work.
Terms of agreement
To fulfill the terms of the option agreement, Fjordland must spend an
aggregate total of $7 million on exploration over four years commencing
December 20, 2010 the effective date of the option agreement. Fjordland
must issue up to 7 million shares with 700,000 shares due on regulatory
approval of the option agreement. The balance of 6.3 million shares will
be issued to Kootenay in various increments at each anniversary date
thereafter. Subsequent to exercise of the earn-in, Fjordland and Kootenay
will form a 60/40 joint venture. Financing of further work on the
properties will be on a proportional basis under the direction of a
management committee with voting rights proportional to ownership
percentage. Either party may be diluted on the basis of a standard
formula if they do not contribute to the planned programs.
The interest in the Kootenay Gold Claims is subject to the terms of the
Kennedy Grubstake agreement, which includes an underlying 2% net smelter
royalty (which includes a buy out option on 1.5% of the net smelter
royalty for a $1.5 million payment).
The foregoing geological disclosure has been reviewed and verified by
Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose
of National Instrument 43-101, Standards of Disclosure for Mineral
Projects). Mr. McDonald is a director of Kootenay.
ABOUT KOOTENAY
Kootenay Gold is actively developing mineral projects in the Sierra Madre
Region of Mexico and in British Columbia, Canada. The Company's flagship
property is the former producing Promontorio Silver mine in Sonora State,
Mexico. The Company's objective is to develop near term discoveries and
long term sustainable growth. Kootenay's management and technical team
are proven professionals with extensive international experience in all
aspects of mineral exploration, operations and venture capital markets.
Multiple, ongoing J/V partnerships in Mexico and Canada maximize
potential for additional, new discoveries while maintaining minimal share
dilution.
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For additional information, please contact:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
www.kootenaygold.ca
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this release. Cautionary
Note to US Investors: This news release may contain information about
adjacent properties on which we have no right to explore or mine. We
advise U.S. investors that the SEC's mining guidelines strictly prohibit
information of this type in documents filed with the SEC. U.S. investors
are cautioned that mineral deposits on adjacent properties are not
indicative of mineral deposits on our properties. This news release may
contain forward-looking statements including but not limited to comments
regarding the timing and content of upcoming work programs, geological
interpretations, receipt of property titles, potential mineral recovery
processes, etc. Forward-looking statements address future events and
conditions and therefore involve inherent risks and uncertainties. Actual
results may differ materially from those currently anticipated in such
statements. 2010 number 31
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