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Gray Rock Resources Ltd
Symbol C : GRK
Shares Issued 16,394,961
Close 2016-10-31 C$ 0.14
Recent Sedar Documents

Gray Rock samples up to 42.1 g/t Au at Surprise Lake

2016-10-31 09:18 ET - News Release

Mr. David Wolfin reports

GRAB SAMPLING PROGRAM AT SURPRISE LAKE GOLD PROJECT

Gray Rock Resources Ltd. has received the assay reports from recent rock samples taken on the Surprise Lake property in northwest British Columbia. A total of 43 rock samples was collected from three locations on the Otter Creek area of the Surprise Lake property which is the subject of a binding letter of intent between DeCoors Mining Corp. and Gray Rock Resources.

"The results from the recent sampling program, along with the discovery of visible gold at the Surprise Lake property, are very encouraging. We expect the transaction with DeCoors to close soon and are currently preparing an exploration budget for 2017. Previous work on the Surprise block of the Surprise Lake project has identified drill-ready targets, and we're excited to explore the recent discovery on the Otter Creek block with the team from DeCoors, who have extensive knowledge of the property, joining our team as we move the project forward," said David Wolfin, president and chief executive officer of Gray Rock Resources.

Sampling program

Five one-metre-long samples were collected from rock saw channels cut into mineralized rock composed of fine-grained, black phyllite with occasional centimetre-scale quartz veins parallel to the foliation. The area sampled is located approximately 550 metres north of an area where visible gold was observed in bedrock (see Gray Rock press release dated Sept. 30, 2016). The samples were analyzed by ALS Minerals' laboratory in Vancouver, B.C.; gold results from these five samples are listed in the attached table.

Sample                              Au (g/t)  
             
2501                                   0.01                
2503                                   6.89                
2504                                   42.1                
2505                                   3.05                
2506                                   0.15                

A line of 20 grab samples was collected over 120 metres running north-south approximately 130 metres due west of the rock samples described above. The samples were analyzed by Bureau Veritas Commodities Canada Ltd.'s Acme lab in Vancouver. Highlights from the grab samples assayed at 20.8 grams per tonne and 4.11 grams per tonne, respectively.

Sample                              Au (g/t)
              
3675                                  0.043                
3676                                  0.563                
3677                                   20.8                
3678                                   4.11                
3679                                  0.135                
3680                                  0.289                
3681                                   0.32                
3682                                  0.016                
3683                                  0.023                
3684                                  0.155                
3685                                  0.002                
3686                                  0.063                
3687                                  0.335                

A third group of 18 one-metre chip samples were collected across 18 metres of bedrock perpendicular to a felsic dike 850 metres south of the first group and 300 metres south of the visible gold reported in the press release dated Sept. 30, 2016. These samples were taken from bedrock, predominantly black, pyritiferous phyllite with abundant centimetre quartz veins making up 80 per cent of the rock in places. The samples were analyzed by ALS Minerals' laboratory in Vancouver, B.C., and, although anomalous, did not show gold value greater than 2.41 grams per tonne.

Additionally, results of a British Columbia Geological Survey analysis of visible gold samples in the area are expected soon.

Readers are cautioned that the above results are from selected grab samples and in no way represent the true grade of the structure. There has been no drilling conducted on the Surprise Lake property.

Surprise Lake project

The Surprise Lake project is located eight kilometres east of the town of Atlin in northwestern British Columbia, a productive, placer mining area with a rich mining history dating back to the gold rush of the 1890s. Large parts of the property are situated within the drainage basins of several prolific gold placer streams, such as Pine Creek and Spruce Creek, which are actively being mined. It has been speculated that some of the placer gold originated from the bedrock on the Surprise Lake property.

The property hosts ultramafic peridotite in an arcuate thrust slice in the northwestern part of the property and as small lenses in the southeast. Provincial examples of gold camps with spatially associated ultramafic rocks include the Bridge River, Cassiar and Rossland lode gold, and the Atlin and Dease Lake placer camps. Additionally, the Surprise Lake property covers four documented mineral occurrences on file with the B.C. Geological Survey (Surprise, Atlin project (main block), O-1 and Cabin Silver), and the recent discovery in July, 2016, of visible gold in bedrock along Otter Creek. The gold is hosted by quartz vein stockwork, and variably pyritic pale green and graphitic phyllite wallrock, proximal to the northerly trending Otter Creek fault. Studies of this bedrock are currently under way by the B.C. Geological Survey to determine the age, petrology and geochemical associations. The extent of this mineralization is the primary focus of the current property exploration.

Agreement

On Sept. 30, 2016, Gray Rock announced that it had entered into a binding letter agreement with DeCoors Mining to acquire the Surprise Lake property, consisting of 31 mineral claims and covering an area of approximately 5,144 hectares. The agreement also includes six other early-stage mineral exploration properties comprising a further 48 mineral claims, all located in British Columbia. In consideration of the acquisitions, the company will issue to DeCoors for the Surprise Lake property four million common shares, and reimburse DeCoors for its location and exploration costs on the Surprise Lake property up to a maximum of $30,000. The other properties will be acquired for only nominal consideration. In addition, DeCoors will retain a 1.5-per-cent net smelter return (NSR) royalty on each of the purchased properties, until the company has paid $2-million under the NSR royalty of any property placed into commercial production. Each NSR royalty will be subject to the company's exclusive option to purchase all of any part of the NSR royalty at any time at the rate of $666,667 for every one-third of the NSR royalty (that is, 0.5 per cent) or $2-million in the aggregate for the total NSR royalty.

In addition to the consideration described above, DeCoors will have the right to nominate up to two directors to the board of the company, one at the closing of the agreement and another at the next annual general meeting of the company.

The agreement is subject to the acceptance of the TSX Venture Exchange.

Quality assurance/quality control (QA/QC)

QA/QC protocol for the Surprise Lake project includes monitoring the results of blank and certified reference standard samples that are inserted in the sample stream at a frequency of one in 20 each. Two different certified analytical laboratories were used. Samples were collected in the field under the supervision of a qualified person. Samples were sealed on site and transported directly to the laboratory's sample preparation facility. Samples for this program were submitted for preparation and analysis at ALS Minerals' laboratory in Vancouver, B.C., using (Me-Ms 61) ICP (inductively coupled plasma) with fire assay AA finish, as well as Bureau Veritas Commodities Canada Ltd.'s Acme lab in Vancouver using ICP-ES/MS (emission spectrometry/mass spectrometry) (MA200) and fire assay for gold, both of which are ISO certified. Gold analyses were conducted using the fire assay method with AA finish. Overlimit samples were assayed by fire assay with a gravimetric finish.

Qualified person

John Buckle, PGeo, PGeoph, a qualified person as defined by National Instrument 43-101, has reviewed and approved the scientific and technical disclosure in this news release.

About Gray Rock

Gray Rock Resources is a Vancouver-based precious metals exploration company focused on high-potential gold prospects in British Columbia.

We seek Safe Harbor.

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