Mr. Kelly Klatik of Falco Pacific Resource Group reports
FALCO PACIFIC SIGNS LOI-EXPANDS HOLDINGS IN THE WESTERN CAMP
Falco Pacific Resource Group Inc. has entered into a letter of intent (LOI) with Vior Inc. to acquire 100 per cent of the 22-claim (800-hectare) Beauchastel gold property, located in the Flavrian gold district that forms part of the West Rouyn-Noranda camp.
The Beauchastel property is partially surrounded by Falco Pacific's Flavrian, Four Corners and Montbray South properties. Several gold-bearing structures transect the Flavrian area, the two most important being the Quesabe fault and Twin Lakes fault. The northeast-trending Quesabe fault hosts Falco Pacific's former producing Quesabe gold mine, located 2.5 kilometres to the northeast of Beauchastel. Historic production at the Quesabe mine is reported to have been 109,000 tonnes at 10.64 grams per tonne (g/t) gold, with remaining inventories reported as a historical resource of 450,000 tonnes at seven g/t gold (100,000 ounces). No assessment of the potential for profitable extraction of the above tonnages has been made. Future programs under consideration will focus on validating and expanding the tonnage base identified. In addition to Quesabe, the former producing Silidor (2.9 million tonnes at 5.1 g/t gold -- historic production) and Beauchemin (1.85 million tonnes at 5.31 g/t gold -- historic production) gold mines are located on adjacent properties within the same structural domain. A qualified person has not done sufficient work to classify any of the historical estimates as current mineral resources. The company is not treating the historical estimates as current mineral resources.
Under the terms of the LOI, Falco Pacific will pay Vior $75,000 and issue 150,000 common shares of Falco Pacific, subject to a pooling agreement, on closing of the transaction. An additional $25,000 is due in six months from closing. Vior will retain a minimum net smelter return (NSR) royalty of 1 per cent and maximum of 2 per cent on the various claims, with Falco Pacific having the right to buy back up to 1 per cent of the NSR for $1-million, subject to Vior maintaining a minimum 1 per cent. The transaction is subject to negotiation and completion of a definitive agreement with Vior and approval of the TSX Venture Exchange.
Continuing data review
The execution of the LOI is a result of a continuing data review process focused on deriving drill-ready opportunities from the enormous data package acquired by Falco Pacific as part of the Rouyn-Noranda project. An initial review of the Flavrian area, indicates strong similarities to the area surrounding Queenston Mining Inc.'s Upper Beaver copper-gold deposit, which is located 40 kilometres southwest within the same rock package. Osisko Mining Corp. recently entered into an agreement to acquire Queenston for approximately $550-million pending shareholder approvals. The Flavrian area has historically been subjected to only shallow exploration and as indicated above has produced several high-grade gold deposits. In fact, nine of the 12 former producing mines in the western camp were precious metal producers, with the Quesabe mine now held by Falco Pacific.
Falco Pacific's president and chief executive officer, Kelly Klatik, said, "We are pleased to see a number of promising targets emerging from our evaluation of the western camp area, where our initial focus will be on high-grade gold opportunities at shallow depths."
Dr. Michael Byron, vice-president, exploration, is the qualified person as defined by National Instrument 43-101, and has reviewed and verified the technical information contained in this news release.
We seek Safe Harbor.