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News Release
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Thursday,
September 03, 2009
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Callinan Options Island Lake Claims and Plans
Exploration Program
VANCOUVER - Callinan is pleased
to announce that it has recently entered into an option agreement to earn an
interest in 32 mineral claims comprising 5,303 hectares in the Island Lake
area of East-Central Manitoba. The Island Lake property hosts several known
gold occurrences, including historical drill holes with values of up to 28.3
grams per tonne of gold. Other historic work includes a 70 ton bulk sample
mined by Island Lake Gold Mines in 1934 from two pits on the property, from
which 47.25 oz of gold was recovered. The property is located on the same
system of shears, faults and splays as the previously producing Island Lake
Gold Mine operated by Island Lake Gold Mines Limited, according to assessment
work filed with the Manitoba government.
"Great gold mines are often found near or under old gold mines,"
said Callinan President Mike Muzylowski. "Our Island Lake property has a
significant mineralized system that has produced gold with good grades. The
work done by previous operators, including diamond drilling, trenching and
bulk samples, consistently produced gold grades of multiple grams per ton and
associated silver values. This gives us a good indication that, with modern
geophysical and drilling techniques, we may be able to uncover value in this
shear zone."
Induced polarization work done by previous operators has located anomalies as
large as 100 by 50 meters, and 140 by 15 meters with coincident gold values. These
anomalies remain un-tested.
All assay values and grades referenced at the Island Lake property have been
sourced from records of work of previous operators filed with the Manitoba
Government. As the work was conducted prior to the implementation of NI
43-101, and Callinan has not been able to verify the methods used and the
quality assurance and controls, if any, these early results are disclosed for
information purposes only, may not be relevant and should not be relied upon.
Callinan plans to drill test targets in the Island Lake area as part of a
winter 2009-2010 drilling program and has budgeted $500,000 for the drilling
program. Callinan currently has $11.8M in cash, and continues to receive
income from its net profits and royalty interests in the 777 Mine in Flin Flon,
Manitoba.
The Island Lake property has been optioned under an option agreement with
W.S. Ferreira Ltd. and William Ferreira. The agreement gives Callinan the
right to earn an 80% interest in and to the Island Lake claims for initial
consideration of $20,000 and the issuance of 50,000 common shares in its
capital to W.S .Ferreira Ltd., upon regulatory approval. Callinan will
continue to make payments of cash and shares on the anniversary of regulatory
approval of the agreement in each of the next three years if the company
wishes to continue to earn its interest. Should Callinan elect to exercise
the option and acquire the 80% interest, the Company will have issued a
further 350,000 common shares and made further cash payments of $380,000 and
expended $1,900,000 on the exploration of the property over the three year
time period. Upon exercise of the option, the claims will be subject to a 2%
net smelter return royalty to W.S. Ferreira Ltd., with 50% of this royalty
purchasable by Callinan for a total payment of $1,000,000. The option
agreement is subject to regulatory approval.
Callinan's exploration programs are being conducted under the supervision of
P.J. DeVeaux, a qualified person as defined by National Instrument 43-101 who
has reviewed and approved the contents of this news announcement.
Mike Muzylowski
Mike Muzylowski
President and CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Some statements in this news release contain forward-looking information.
These statements include, but are not limited to, statements with respect to
future expenditures. These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by the statements. Such factors include, among others,
the ability to complete contemplated private placements and the timing and
amount of expenditures. Callinan does not assume the obligation to update any
forward-looking statement.
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