Mr. Kevin Nephin reports
KESTREL GOLD OPTIONS THE CLEAR CREEK, BARNEY RIDGE AND DEASE PORPHYRY PROJECTS
Kestrel Gold Inc. has entered into option agreements with veteran prospector Bernie Kreft to acquire a 100-per-cent interest in the Clear Creek and Barney Ridge projects, both located east of Dawson City, Yukon, and the Dease porphyry project located south of Dease Lake, B.C.
Kevin Nephin, president and chief executive officer of Kestrel Gold, stated: "The acquisition of these projects gives Kestrel shareholders exposure to gold and copper-gold assets with significant exploration upside. We believe both copper and gold will be strong performers over the next few years; this acquisition puts the company in [a] great position to participate the commodities uptrend that is just beginning."
Each of the Clear Creek and Barney Ridge projects are subject to separate option agreements. In order for Kestrel to earn a 100-per-cent interest, it must, for each project, spend $350,000 on exploration, drill a minimum of 2,500 metres (core or reverse circulation), as well as make cash and Kestrel share issuances to Kreft as follows:
Upon signing, Kestrel will pay $20,000;
Year 1 anniversary -- $30,000;
Year 2 anniversary -- $50,000 and 250,000 shares;
Year 3 anniversary -- $80,000 and 250,000 shares;
Year 4 anniversary -- $120,000 and 500,000 shares.
Each project is subject to a 2.5-per-cent royalty payable to Kreft with a buydown of 60 per cent for $1.5-million. Kestrel will also make other payments to Kreft in the event the following milestones are met:
Should a preliminary economic assessment (PEA) be completed, Kestrel will pay 75 cents per gold equivalent ounce contained on the property in the inferred mineral resource or greater category at that time, to a maximum of $2.5-million.
If a feasibility study is completed, Kestrel will pay $1.50 per gold equivalent ounce contained on the property in all categories of reserves and resources at that time, less any amount paid at the time of the PEA, to a maximum of $5-million.
To earn a 100-per-cent interest in the Dease porphyry project, Kestrel must complete a total of 4,000 metres of drilling by the fifth anniversary of the deal as well as make cash payments and share issuances to Kreft as follows:
Upon signing, Kestrel will pay $10,000;
Year 1 anniversary -- $10,000;
Year 2 anniversary -- $10,000;
Year 3 anniversary -- $20,000;
Year 4 anniversary -- $40,000;
Year 5 anniversary -- $80,000 and 250,000 shares.
The Dease porphyry project is subject to a royalty payable to Kreft of 2.5 per cent with a buydown of 60 per cent for $1.5-million.
A total of 1,500 metres of drilling must be completed by the fourth anniversary; a further 2,500 metres of drilling must be completed by the fifth anniversary.
Should a PEA be completed, Kestrel will pay two cents per pound copper equivalent contained on the property in the inferred mineral resource or greater category at that time, to a maximum of $2.5-million;
If a feasibility study is completed, Kestrel will pay four cents per pound copper equivalent contained on the property in all categories of reserves and resources at that time, less any amount paid at the time of the PEA, to a maximum of $5-million.
The option is subject to certain customary conditions, including, without limitation to, receipt of all necessary regulatory and third party approvals, including the approval of the TSX Venture Exchange.
The road-accessible Clear Creek and Barney Ridge projects are located along the Left Fork of Clear Creek, which is the site of extensive past and present placer mining activity. The projects are located approximately 60 kilometres west of Victoria Gold's Dublin Gulch project and 55 kilometres southeast of Golden Predator's Brewery Creek project.
Numerous phases of exploration on the Clear Creek project has helped define several mineralized showings comprising two distinct mineralized settings: an intrusion-hosted, bulk-tonnage, Fort Knox-style sheeted vein setting and a structurally controlled, high-grade vein-and-breccia-hosted setting in adjacent sedimentary rocks. The former setting is best indicated by the Eiger stock, where rock sampling returned values ranging from less than five parts per billion to 319.5 grams per tonne gold, along with anomalous bismuth, arsenic and tungsten values. Reverse circulation drilling returned an intercept of 0.65 gram per tonne gold over 88.0 metres with the final 3.0 metres grading 1.296 grams per tonne gold. Southeast of this stock is a structurally controlled sediment-hosted quartz arsenopyrite vein, an analysis of which returned values from less than five parts per billion up to 50.1 grams per tonne gold.
The Barney Ridge property also has potential to host both intrusion-hosted, bulk-tonnage, Fort Knox-style targets and structurally controlled, sediment-hosted mineralization in adjacent rocks. Rock sampling of altered sediments near the margin of the Barney Stock has returned values ranging from less than five parts per billion to 7.72 grams per tonne gold across 0.8 metre. Highly variable silver and pathfinder element geochemistry suggests a multipulsed history of hydrothermal activity centred on the stock. The stock itself has only been subject to limited exploration activity and is thought to have good potential for Fort Knox-style targets.
Kestrel intends to further explore both the Clear Creek and Barney Ridge projects with soil sampling and hand trenching with a view toward developing targets for a preliminary RAB (rotary air blast) drilling program later in the season. Mr. Nephin stated: "The Clear Creek and Barney Ridge projects contain significant potential for both structurally controlled, sediment-hosted mineralization as well as bulk-tonnage, Fort Knox-style targets. Continued exploration successes at Victoria Gold's Dublin Gulch property help confirm the highly prospective nature of the deposit models found on both the Clear Creek and Barney Ridge properties. We are excited to have acquired these projects and be in a position to unlock their exploration potential."
The Dease porphyry project is located within the Quesnel Trough, approximately 35 kilometres south of Dease Lake and approximately 52 kilometres north of the Red Chris mine, which is exploiting a major copper-gold porphyry system. The geological setting consists of Stikine-terrane, middle- to upper-Triassic-aged Stuhini group volcanics intruded by various late-Triassic to mid-Jurassic granitic plutons and batholithic rocks. The Lode, Hotai, Hu and Upper Gnat target areas occur within project environs. At Lode, numerous showings consisting of mineralized skarn, granitic to syenitic dikes and quartz veins have been identified. Rock geochemical sampling of these returned values from background to 13.027 per cent copper and 1.012 grams per tonne gold. These mineralization styles are typically found along the periphery or outbound of a mineralized porphyry centre. At Hotai, two sizable IP (induced polarization) anomalies have been defined. One measures 750 metres by 1,700 metres and is coincident with a magnetic high feature. A diorite outcrop peripheral to this chargeability anomaly hosts copper-rich quartz veinlets, analyses of which have returned values of from trace to 0.567 per cent copper and 0.074 gram per tonne gold. The second chargeability target measures 1,100 metres by 1,700 metres and is coincident with an annular magnetic high surrounding a central magnetic low, considered a classic porphyry copper deposit signature. The Upper Gnat contains shear-hosted disseminated to semi-massive sulphide mineralization within the late Triassic Cake Hill pluton. Rock samples of this grade from trace to over 1 per cent copper and 5.219 grams per tonne gold and possibly represent remobilized bonanza-style mineralization outbound from a porphyry centre. At Hu, grab samples ranging from trace to 2.01 per cent copper and 0.708 gram per tonne gold are found associated with an alteration assemblage, consistent with those associated with alkalic porphyry copper-gold deposits.
Kestrel intends to explore the various mineralized target areas with biogeochemical (tree) sampling, prospecting and hand trenching, with a view toward developing targets for a preliminary RAB drilling program later in the season. Mr. Nephin stated, "The Dease porphyry project contains several interesting porphyry copper-gold targets within the Quesnel Trough, which is a well-endowed belt of rocks hosting many important copper-gold mines and deposits throughout British Columbia."
Carl Schulze, PGeo, is the qualified person in accordance with National Instrument 43-101 of the Canadian Securities Administrators, and he has reviewed and approved the technical content of this press release.
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