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News Releases
| | April 12, 2006
JOINT VENTURE - News Release
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| | Kootenay Gold Inc. (KTN-TSX.V) is pleased to announce that it has completed an option agreement with Astral Mining Corporation (AST-TSX.V) whereby Kootenay grants Astral the right to earn a 60% undivided interest in the 11,785 hectare Jumping Josephine (JJ) Property located in the Nelson Mining Division of southern British Columbia. The JJ Property consists of mineral claims held 100% by Kootenay and straddles Highway 3, north of the town of Rossland and west of Castlegar. New intrusive-hosted vein and shear-hosted gold showings were discovered in several areas of the JJ Property during 2003 by Kootenay. Kootenay assembled a claim position in the area over subsequent several years also surrounding and including several small past-producers in the Granville Mountain (Bonanza Pass) area.
To fulfill the terms of the option agreement Astral must spend $2.1 million on exploration, issue 400,000 shares and make $100,000 in option payments over 5 years. Subsequent to exercise of the earn-in, Astral and Kootenay will form a 60/40 joint venture. Funding of further work on the JJ Property will be on a proportional basis under the direction of a management committee with voting rights proportional to ownership percentage. Either party may be diluted on the basis of a standard formula if they do not contribute to the planned programs. If either party is diluted to 5%, their interest will convert to a 2.5% NSR royalty, 2% of which can be purchased at any time for $2 million by the surviving partner.
The property area is primarily underlain by several phases of the Middle Jurassic-aged Nelson plutonic suite as well as the Eocene Coryell intrusive suite. These intrude Permo-Carboniferous metavolcanics and metasediments of the Mount Roberts Formation, which are exposed as large pendants. Gold mineralization is interpreted to be localized by several prominent north to northnorthwest trending structural zones. Four main mineralized areas have been identified to date on the property within a 15 by 10 kilometre area and are referred to as: JJ Main; JJ West; Pb-Zn; and Granville Mountain.
JJ Main
At the JJ Main, northeast-trending brittle shears cut both Jurassic and Eocene intrusive rocks. The shear zones have been traced through a strike length of more than 600 meters and extend intermittently across a width of several tens of metres. Mineralization within the zone comprises quartz stockworks, vein-breccias, ladder-veining and a series of parallel, sheeted veins spaced 5 to 15 cm apart. Kootenay has reported a maximum assay value of 19 g/t Au has been obtained from grab samples of vein material; values up to 2 g/t Au are more common. Shear-hosted vein showings occur over at least 2km of strike projection.
JJ West
The JJ West showing, located 3km northwest of the JJ Main, is manifested as a number of north-trending shear zones of silicified rock and quartz veins cutting coarse-grained Eocene Coryell syenite. The shear zones vary from 0.5 to several metres in width and include traces of disseminated, fine-grained grey sulphides cut by irregular quartzlimonite veinlets with trace pyrite and locally arsenopyrite. Kootenay reports grab samples of up to 200 g/t gold although values between 100 ppb and 1 g/t gold characterize the sample results to date.
Pb-Zn Zone
The Pb-Zn Zone comprises a number of silicified zones of disseminated and stringer pyrite±pyrrhotite±galena±sphalerite within sericite-altered granitic rock approximately 1.5km further east of the JJ West showing. The silicified zones trend roughly north-south and vary between 0.5 and 2.0 metres in width. Breccia-hosted disseminated pyrite±galena±sphalerite have reportedly returned assays ranging up to 4,000 ppm Pb and 5,900 ppm Zn.
Granville Mountain (Bonanza Pass)
The Granville Mountain area (Bonanza Pass) contains several prominent north-trending quartz-gold veins with variable lead, zinc and copper content. Limited high-grade gold and silver production came from a number of these veins between the 1912 and 1964. Grab samples collected by Kootenay from these historic veins at surface have returned assays exceeding 100 g/t gold. The JJ Property surrounds remaining Crown Granted claims and covers some of the historical producers in Granville Mountain Camp.
Recent prospecting by Kootenay along newly-exposed logging cuts has identified numerous thin (several tens of centimetres) fracture-controlled quartz-pyrite-limonite veinlets mineralized with visible gold at the BTZ Zone which occurs along the contact of the Mount Roberts Formation volcanics and sediments with Coryell intrusive over a 400m stretch of logging road 2km to the south of the main Granville Mountain camp. Kootenay has reported assays ranging from anomalous up to 557 g/t gold from grab samples of these thin fracture-controlled veinlets. This newly discovered zone is believed to have potential for bulk-tonnage and/or high grade lode gold mineralization.
Astral is planning an aggressive exploration program for the 2006 field season starting with an airborne geophysical survey in early spring followed by detailed surface work including prospecting, geological mapping, gridding and soil sampling to evaluate geophysical and geochemical targets for subsequent trenching and/or drill-testing. Maps and photos from the JJ property are posted on the Company's web site.
The analytical work was carried out by ACME Analytical Laboratories Inc. of Vancouver, B.C., and was described in an internal report prepared by Dr. Trygve Hoy, P.Eng. for Kootenay. 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.
Kootenay has also issued incentive stock options to various directors, officers, consultants and employees of the Company. The options are exercisable to purchase 1,100,000 shares for a period of five at years $.71 per share.
Kootenay is an exploration company set up to acquire 100% interests in precious metals properties through property acquisitions and exploration discoveries. During the last 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, 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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| | You can view the Next News Releases item: Mon May 8, 2006, <html><FONT COLOR="0066CC"><b>JOINT VENTURE - </b></font></html> Airborne Survey Underway on Jumping Josephine Gold Project in British Columbia
You can view the Previous News Releases item: Fri Feb 10, 2006, <html><FONT COLOR="0066CC"><b>FINANCING - </b></font></html>Kootenay Announces Closing of Offering
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