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Marathon Gold Corporation (MOZ-TSX)
(“MGC”) and New Jersey Mining Company (OTCBB:NJMC)
(“NJMC”) jointly announced the formation of Golden Chest LLC
(“GC”). GC is owned 50% by MGC through its wholly owned US
subsidiary Marathon Gold USA Corp. (“MUSA”) and 50% by NJMC, with
NJMC being the operator.
Highlights:
- the Golden
Chest Mine is the largest historical producer of gold in the Coeur
d’Alene Mining District, is fully permitted and sits on private
land
- a 1,050
meter long main level allows ideal access for exploration
- historic
production came from a network of high-grade veins which averaged 17
grams per tonne
- the Golden
Chest Mine has a mineable underground reserve totaling 39,659 gold
ounces, which is SEC compliant
- 2011 plans
include over 10,000 m of underground and surface drilling and over 400 m
of underground development to explore the surface and underground mining
potential
Phillip Walford, President
and Chief Executive Officer of Marathon Gold commented, “The Golden
Chest Mine gives Marathon Gold a rare opportunity to explore and rapidly
develop open pit potential resources as well as underground resources and
reserves. Newmont intersected up to 20 meters of gold mineralization
grading better than a gram per tonne near surface
and the accessible 1,050 meter long main level is an ideal drilling platform
for exploring and defining the vein systems. It is remarkable that
there is very little surface and underground drilling on the property.”
Fred Brackebusch,
President of New Jersey Mining Company, also commented, “The Golden
Chest has a long and colorful history but it has not been explored
adequately, especially at depth. We look forward to this joint venture
arrangement that will allow the potential of the mine to finally be
realized.”
The Golden Chest Mine is located two miles east of
Murray, Idaho within the gold belt of the Coeur d’Alene Mining
District. The mine has over 3,900 meters of underground workings and
has the permits necessary to drill and operate on the deposit. The property
includes 21 patented mining claims and 21 unpatented mining claims covering
206 hectares.
The Golden Chest Mine
Placer gold was discovered in the streams near
Murray in 1882 and led to a gold rush that was the birth of the Coeur
d’Alene Mining District. Past gold production for the Murray area is
estimated at 300,000 ounces, including of 200,000 ounces from placers. The
Golden Chest was the location of one of the first lode claims in the
district, and is the largest historic lode producer of gold in the district
with production estimated at approximately 65,000 ounces mostly from shallow
underground mining of the Katie and Dora high grade veins. Most of this
historic mining took place in the late 1890’s and 1900’s. In the
late 1980’s Newmont Exploration Limited (NEL) explored the Golden Chest
with 35 shallow reverse circulation and 5 core holes and estimated an
“inferred geologic resource” of 231,000 ounces at 1.66 grams per tonne (gpt). This historic
resource was primarily contained to a large quartz vein system known as the
Idaho vein on the southern end of the property.
NJMC has leased the property since 2003 and
conducted small scale underground mining totaling 8,400 tonnes
grading 6.90 gpt. A 500 meter ramp was driven to
connect the the No. 3 level. NJMC also completed
about 3,500 meters of core drilling on the property and was successful at
extending the Idaho vein at depth. Highlights from this period of drilling
include: DDH04-6 which intercepted 15.5 meters grading 5.50 gpt gold and DDH05-3 which intercepted 7.1 meters assaying
10.32 gpt gold. NJMC has also estimated the
SEC-compliant reserve of 242,000 tonnes grading
5.10 gpt gold along the Idaho vein.
Geology
Gold mineralization at the Golden Chest is related
to a thrust fault known as the Idaho fault and the property is located on the
west limb of the Trout Creek anticline, a major north-trending fold in the
Prichard formation. The Idaho fault occurs at the contact of Prichard
formation units G and H. Unit G, a quartzitic
unit, is the host for most of the veins while the overlying Unit H is an
argillite-siltite sequence of rocks. Though,
near the fault, Unit H has been found to host narrow, high-grade vein
structures.
In the southern part of the mine, gold
mineralization is found near and parallel to the north-trending Idaho fault,
while the northern part of the mine hosts the higher grade Katie and Dora
veins which splay off the Idaho fault in a northeasterly direction.
Gold mineralization can be found along at least 1,500 meters of strike
length. The lowest level of the Golden Chest mine is the No. 3 level, which
is at the valley bottom elevation. Here drilling has only probed
the Idaho vein about 120 meters below this level in a district known for
hosting orebodies that outcrop on surface and continue at depth for 2,500
meters.
Exploration and Development Plan
The exploration and development plan for the Golden
Chest will consist of both surface and underground core drilling as well as
underground development. About 7,200 meters of surface drilling and
3,600 meters of underground drilling are planned for 2011. The goals of
the drilling program will be to increase the density of drilling on the
surface for a NI 43-101 compliant resource estimate and also to extend the
mineralization down dip. An underground mapping and sampling program
will also be undertaken.
Additionally, a new No. 3 adit will be driven to
provide a secondary escape for potential future production which could be
processed at NJMC’s processing facility in Kellogg, Idaho. A down
ramp will be driven from this new adit to investigate a higher grade portion
of the Idaho vein sampled in the 1920’s that reportedly averaged 11.8
gpt gold. New crosscuts will also be driven in the southern and
northern parts of the mine. The northern crosscuts will provide
drilling platforms targeting potential high-grade Katie-Dora type veins at
depth.
Venture Terms
GC has purchased the Golden Chest Mine near Murray
Idaho, a past gold producer, for US$3,750,000. GC has paid the sellers
US$500,000 in cash on closing the transaction and has agreed to pay to the
sellers US$500,000 each year for the next six years and a final payment of
US$250,000 on the seventh anniversary. The sellers have a first mortgage on
the mine as security for the future payments owing.
NJMC has contributed to GC certain mining claims it
owned, all geological data and certain mining equipment. Also in
consideration for its interest in GC, NJMC has terminated, for the benefit of
GC, two operating leases it held on the mine. MUSA has contributed US$1,000,000
cash and has agreed to contribute i) US$500,000 by
March 31, 2011, ii) US$500,000 by June 30, 2011, iii) US$1,000,000 by
September 30, 2011 and vi) US$1,000,000 by November 30, 2011 for a total cash
contribution of US$4 million. If MUSA does not make all of the US$4M payments
to GC, its 50% ownership interest will be reduced. MUSA has the right to
contribute an additional US$3.5 million by November 30, 2012 to take its
ownership interest to 60% of GC. MUSA also has the option to accelerate
any of these contributions.
After the earlier to occur of completion of the
initial contribution of US$4M or a default in paying any remaining amount of
the initial contribution, a joint funding program will commence. If
MUSA chooses not to contribute to required funding and NJMC contributes such
funding, MUSA's ownership interest will be reduced.
MGC has also agreed to purchase from NJMC 2 million
units for US$0.20 per unit, each unit comprised of one share of NJMC and one
warrant to purchase an additional share of NJMC at US$0.30 per share for two
years.
Phillip Walford, P.Geo.,
President and CEO, is Marathon’s Qualified Person in compliance with
National Instrument 43-101 with respect to this release. Mr. Walford
has reviewed the contents for accuracy and has approved this press release on
behalf of Marathon.
About Marathon Gold Corporation:
Marathon Gold Corporation is one of Canada’s newest gold resource
development companies, with projects located in the mining friendly province
of Newfoundland and Labrador and now a project in the prolific Coeur
d’Alene Mining District. Marathon has a tiered project pipeline
consisting of early stage exploration to advanced resource development
projects which can be built into mineable reserves. Marathon is
continually evaluating new gold resource development projects of merit that
are located within the Americas. Marathon’s focused and low-cost
approach to resource development and exploration has an established record of
delivering rapid growth. Marathon Gold Corp. (TSX: MOZ)
(“Marathon”) is the operator of the Valentine Lake Project under
the sub-option and joint venture agreement (“OJVA”) between
Mountain Lake and Marathon.
For more information on Marathon Gold Corporation,
please contact:
David Leng, P.Geo.
Tel: 1.416.849.3432
Fax: 1.416.861.1925
Email: dleng@marathon-gold.com
Website: www.marathon-gold.com
About New Jersey Mining Company:
New Jersey Mining Company is involved in exploring for and developing gold,
silver and base metal resources in the Coeur d’Alene Mining District of
northern Idaho. New Jersey Mining Company has a portfolio of mineral
properties in the Coeur d’Alene Mining District including the New
Jersey Mine which includes a fully-permitted flotation mill and a concentrate
leach plant.
For more information on New Jersey Mining Company,
please contact:
Grant Brackebusch, Vice President
Phone: 1.208.783.1032
Email: ir@newjerseymining.com
Website: www.newjerseymining.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This news release contains certain "forward-looking statements"
within the meaning of Section 21E of the United States Securities Exchange Act
of 1934, as amended, and “forward-looking information” within the
meaning of applicable Canadian securities laws. Forward-looking statements
and forward-looking information are frequently characterized by words such as
"plan," "expect," "project," "intend,"
"believe," "anticipate", "estimate" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. Forward-looking statements and
forward-looking information in this news release include statements with
respect to the completion of the exploration and development plan, the
venture and the purchase of NJMC securities by MGC..
Such statements are based on good faith assumptions that management believes
are reasonable but which are subject to a wide range of uncertainties and
business risks that could cause actual results to differ materially from
future results expressed, projected or implied by such forward-looking
statements. The assumptions include that contracted parties provide goods
and/or services on the agreed timeframes, that no labour shortages or delays
are incurred, that no material adverse change occurs to either Marathon or
NJMC. Factors that could cause actual results to differ from those
anticipated are discussed in NJMC's periodic filings with the Securities and
Exchange Commission.
Further information about NJMC and its properties can be found at the
company's website at www.newjerseymining.com.
Neither NJMC nor MGC undertakes the obligation to
update forward-looking statements if circumstances or management's estimates
or opinions should change. The reader is cautioned not to place undue
reliance on forward-looking statements.
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