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News Releases
| | June 06, 2006
GENERATIVE - Kootenay Options Mexico Silver Property to Klondike Silver
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| | Kootenay Gold Inc. (KTN-TSX.V) is pleased to announce, subject to regulatory approval, the completion of an option agreement with Klondike Silver Corp. (TSXV: KS). Kootenay will grant Klondike the right to acquire a 50% interest in the Santa Lucia Property in Mexico. Consideration for the Property consists of US$25,000 and 500,000 shares payable to Kootenay over two years. In addition, Klondike will commit to a work program of US$1,000,000 on the Property within three years.
Kootenay Gold Inc. originally acquired the right to earn a 100 % interest in the Santa Lucia property under the terms of a Grubstake Agreement entered into August 1, 2005. Under the terms of the Grubstake Agreement, Kootenay Gold Inc. has elected to acquire Santa Lucia and must pay 100,000 shares over three years to earn its interest.
Located in southern Sonora State, the Santa Lucia property is comprised of 9,350 hectares in two concessions. Infrastructure on the property is excellent, with ready access to power and water, and a paved road traversing the property. It is well-situated within 70 kilometers of a major city.
Geologically, the property is underlain by Tertiary aged rhyolite flows and ignimbrites, basaltic andesites, probable Jurassic aged sediments and Cretaceous aged felsic intrusives. Silver and gold mineralization is associated with epithermal style veins, silica replacement zones and stockworks.
There are two distinct centers of mineralization, situated about 8 kilometers apart, each of which has had some limited mining by local Gambusinos. An area of mineralized float sits midway between these two areas and may represent a third center of mineralization.
The northern most area consists of widespread quartz veining and replacement style silicification. Recent work indicates that silicification may in part be a strata bound silica cap indicating the upper levels of an epithermal system. Silica caps form good barriers for the pooling and concentration of mineralizing fluids. The area of alteration is open ended in two directions and measures 600 meters by 3,000 meters. Select grab samples range from background to 495 ppm (parts per million) silver and background to 12 ppm gold.
The second area contains two distinct types of mineralization, consisting of broad zones of stockwork quartz veining traced along strike for two kilometers by previous workers and narrower distinct veins with an apparent strike length of two kilometers.
Kootenay Gold and Klondike believe that the significant silver and gold values returned at such high levels in an epithermal system indicate high potential for the discovery of both high grade and low grade silver and gold deposits.
Plans for the property will commence with the gathering and compilation of any available historic data, followed by geologic mapping and sampling programs to identify areas for follow-up geophysical, trenching and drilling programs.
All samples reported were analyzed by ALS Chemex of Vancouver B.C. by ICP with AA finish for gold and silver. Over limit samples are re analyzed using a gravimetric fire assay for gold and either a fire assay with gravimetric finish of an acid digestion with an AA finish for silver.
James M. McDonald, P.Geo., CEO for Kootenay has reviewed the contents of this release and is a Qualified Person as defined by National Instrument 43-101.
About Kootenay. Kootenay Gold is a mineral exploration company focused on acquiring 100% interests in precious metals properties through property acquisitions and exploration discoveries. During the past four years Kootenay has successfully made four new mineral discoveries in the Rossland Republic Gold Trend of British Columbia known as the JJ North, JJ South, Connor Creek and the Sunrise Properties. In addition to its mineral discoveries, the company acquired the Elephant Mountain in Alaska, and the Sabina Property in Northwest Mexico. Kootenay continues to fund prospecting ventures in the Rossland Republic Gold Trend of British Columbia and the Northwest Region of Mexico.
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For further information, please contact:
James McDonald, CEO at 403- 238-6986 or
Ken Berry, President at 604-683-2214
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release. |
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