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February 13, 2013
ST. ELIAS MINES LTD. and INTIGOLD MINES LTD.
Update on Status of Cueva Blanca Property, Peru
Vancouver, B.C. February 13, 2013 St. Elias Mines Ltd. (“St. Elias”) and Intigold Mines Ltd. (“Intigold”) are providing the following update with respect to the Cueva Blanca gold property located in northwest Peru (the “Property”). St. Elias and Intigold entered into an Option Agreement dated June 1, 2011 and amended August 15, 2012 (the “Agreement”). Under the terms of the Agreement, Intigold had an option to acquire a 60% interest in the Property from St. Elias. Intigold has delivered notice to St. Elias that it is no longer going to continue with its option to earn a 60% interest in the Property.
While both companies strongly believe there is great mineral potential at Cueva Blanca, the decision to drop the option is a direct result of the local communities, within the project, expressing strong concerns about, and objections to, mineral exploration activities at Cueva Blanca. As well as general difficulties and social unrest/violence being encountered in northern Peru by other exploration companies such as Candente Coppersat’s Canariaco Project, which adjoins the Cueva Blanca to the east and at Golden Alliance’s Rio Tabaconas Project.
Cueva Blanca Property
The Property covers approximately 5,800 hectares (58 square kilometres) and is located in the Lambayeque department in northwestern Peru, within the northern Peru Miocene metallogenic belt. This belt is defined by a large number of world-class gold and copper-gold deposits of similar age (five million to 25 million years) including Yanacocha, Lagunas Norte and Pierina. Also of great importance are world-class copper-gold porphyry deposits, such as Rio Blanco, Canariaco, La Granja, Cerro Corona, Minas Conga-Galeno-Michiqillay, Magistral and Antamina. The giant gold deposits and the Cu-Au porphyries often occur in clusters (for example, Yanacocha-Conga-Galeno-Michiqillay). Discrete vein- and breccia-hosted deposits of gold and polymetallic mineralization occur adjacent to some copper porphyry deposits.
The Property is bordered to the south and southeast by mineral concessions of Vale SA, and Barrick Gold holds extensive mineral concessions four kilometres to the north.
The Property lies within the northern member of a pair of profound east-west tectonic warps that cross northern Peru. These flexures are marked by an abrupt change in the direction of the regional geological trend from northwest to east-west. Within the southernmost of these tectonic features are the multimillion-ounce Yanacocha gold mine and numerous Cu-Au porphyry deposits. Both the northern and southern structures are on the order of 60 to 80 kilometres wide; they extend right across the Andes from the Pacific Ocean to the Amazon River basin.
The locations of the giant Yanacocha gold mine and other gold deposits and Cu-Au porphyries of the Cajamarca district may be controlled or at least influenced by east to northeast structures within the large-scale southern tectonic flexure. The Cueva Blanca Property, as well as the Canariaco and Rio Blanco Cu-Au porphyries and gold prospects such as Las Huaquillas (Inca One) and Rio Tabaconas (Golden Alliance) appear to be within the northern tectonic flexure.
An important feature of the Property is the Cruz gold/silver epithermal vein system. Some examples of exceptional classic epithermal deposits with geologic characteristics broadly similar to the Cruz vein system are Kupol (Russia), El Penon (Chile), and Tayoltita, Guanajuato and Pachuca (Mexico).
Exploration History
Exploration at Cueva Blanca followed a classic pattern: acquisition based on geologic reasoning, property-wide prospecting and subsequent discovery of precious metal showings, detailed surface exploration of these showings and other mineralized zones followed by an initial exploratory Diamond drilling program. The historic drill assays and the analytical results from the surface geochemical samples provide an indication of the gold-silver potential of the property and warrant continuing exploration.
The previously announced exploration and confirmation work program that was conducted in 2011 consisted of sampling of outcrops and trenches at the Cruz Vein System. Fire assays of irregularly spaced samples along a strike length of 850 metres returned a length-weighted average grade of 2.84 grams per tonne (g/t) gold across an average width of 4.3 metres. These results are not representative of the true grade, width or length of the vein system, because the sample locations were restricted to natural outcrops and trenches excavated in areas of shallow overburden, at arbitrary points along an 850-metre strike interval of the vein system. However, the results are consistent with sample results from earlier programs in the same area, and at the least they provide an incomplete and preliminary indication of the dimensions and grades of the exposed sections of the vein system.
Historic exploration work on the Cruz Vein System included 91 trenches and 18 drill holes totalling 1,860 metres. The drilling tested a 300-metre segment of the vein system, named “Zone 1”. This work established that the Cruz quartz veins have consistently anomalous gold and silver grades, and that the vein system appears to be a classic epithermal gold-silver deposit. The highlights of the 1997 Cruz Vein drill program include core intervals (not true widths) of six metres of 2.31 grams per tonne (“g/t Au”) in DDH CB-01, six metres of 2.96 g/t Au in DDH CB-03 (including 1.75 metres of 7.45 g/t Au), 1.5 metres of 22.68 g/t Au in DDH CB-5, 9.5 metres of 8.09 g/t Au in CB-17 (including 1.5 metres of 35.84 g/t Au), and 10.8 metres of 2.41 g/t Au and 1.2 metres of 6.95 g/t Au in DDH CB-22. Every one of the twenty-two historic Diamond drill holes intersected the Cruz vein system, but three of the 22 holes, which were adjacent step-out holes (DDH CB-8, CB-10 and CB-12) within a 100-metre long segment of the vein system, intersected sheeted veins with higher than normal calcite content. These calcite-dominant veins reported lower-than average gold grades. Gold assays from the other nineteen higher-grade drill holes ranged from 0.9 g/t Au to 35.84 g/t over core lengths of 0.95 metres to 10.8 metres.
The quartz-carbonate Cruz veins contain virtually no sulphides; the veins outcrop strongly along strike in three main multi-vein sheeted zones (Zones 1, 2 and 3). All of these sheeted vein zones are exposed on low ridges along the trace of the vein system, and each exposure is approximately 300 metres long. The sheeted veins can be traced from outcrop to outcrop through the intervening stream gullies but they are poorly exposed in the low ground. The vein system as a whole outcrops sporadically along strike to the southeast and northwest of the drilled area for a distance of approximately three kilometres. The historic exploratory drilling only tested a 300-m segment of the vein system (Zone 1) to true depths of 40 metres to 100 metres, and only five of the 22 holes were drilled as deep as 100 metres (true depth, not hole length). All five of these deeper holes intersected the Cruz vein system.
While the companies have no reason to doubt the accuracy of the historic results, the existing data should not be relied upon until the Companies' own exploration work confirms that the data meet National Instrument 43-101 standards for disclosure. Historic results and the work that generated them predate the enactment of National Instrument 43-101, and may not meet the requirements of that policy.
For additional information on St. Elias and its projects, please visit us at www.steliasmines.com or call Danny Aaron at 1-888-895-5522 (toll free US and Canada). For additional information about Intigold Mines Ltd. and its projects, please visit us at www.intigold.com or call Lori McClenahan, President at 604-669-4677.
ST. ELIAS MINES LTD. & INTIGOLD MINES LTD.
(Signed “Lori McClenahan”)
Lori McClenahan,
President
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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, 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 statement