|Apr 18, 2007|
JOINT VENTURE - Kootenay and Astral Complete Option Agreement on the Chenier Property
Kootenay Gold Inc. (KTN-TSX.V) is pleased to announce that it has entered into an option agreement with Astral Mining Corporation (AST-TSX.V) whereby Kootenay grants Astral the right to earn a 60% undivided interest in the 6,500 hectare Chenier Copper-Gold Project located in the West Kootenay region of southern British Columbia. The geological characteristics observed at the Chenier property indicate it has the potential to host a disseminated alkalic-type copper-gold porphyry deposit. The Company is planning on carrying out an aggressive surface exploration program and an airborne geophysical survey during the 2007 field season to identify drill target on the project.
The Chenier Project is located 30km north of Rock Creek, British Columbia and straddles the Greenwood-Osoyoos Mining Division boundary. The property covers a newly discovered mineralized system with the characteristics of the upper level of an alkalic porphyry copper-gold/silver system including well-zoned structurally controlled alteration and mineralization. The Chenier Project is underlain primarily by granite and granodiorite of the Cretaceous Okanagan Batholith, which intrude older metasediments. The batholith is unconformably overlain by Eocene-aged tuffs and intruded by Eocence-aged alkalic dykes, which locally manifest as northeast-oriented dyke swarms thought to be related to the mineralizing event.
Zoned alteration and peripheral veins are observed over an area of 12 square kilometres on the property. Zoned alteration comprises: 1) Outer lead-zinc sulphide veins and quartz-gold veins rimming 2) Prophylitic and skarn mineralization surrounding 3) A core of chlorite hematite-magnetite veining and brecciation and potassium feldspar. The sulphide veins grade from less than 100 ppm lead and zinc to 0.27% lead and 0.3% zinc and quartz-gold veins range in grade from 25 to 15,900 ppb gold. A number of quartz and quartz-pegmatite veins carry visible molybdenite; an assay of 1556 ppm Mo (0.16% Mo) was obtained from one 15cm wide quartz vein.
Erosion exposes what appears to be a transition from an outer chlorite-hematite shell to an inner potassium shell barely revealing the important copper-bearing zone. Two copper zones named the East and West zones are exposed over areas measuring roughly 500 metres by 200-300 metres. Grab sampling from the East Zone averages 1600 ppm (0.16%) copper from 10 samples with a high of 0.29% copper. Only two samples from the West zone have been assayed, returning 119 and 1693 ppm copper. Silver ranges between 1 and 5 ppm where copper is 500 ppm or more. The zonation observed on the Chenier property fits remarkably well with the alteration envelopes seen at the Ridgeway copper-gold mine in Australia, an alkalic copper porphyry deposit. Astral and Kootenay management believe that the geologic characteristics of the Chenier Project suggest potential significant for a disseminated copper-gold deposit of the alkalic porphyry type.
To fulfill the terms of the option agreement Astral must spend $2.5 million on exploration over four years and issue up to 500,000 shares over a three years period. Should the property go into commercial production Kootenay will receive an additional 200,000 shares of Astral. Subsequent to exercise of the earn-in, Astral and Kootenay will form a 60/40 joint venture. Funding of further work on the Chenier 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 analytical work to date on samples from the Chenier property was carried out by ACME Analytical Laboratories Inc. of Vancouver, B.C. Work on the Chenier Project has been carried out under the supervision of Dr. Trygve Hoy, P.Eng., a Qualified Person as defined in National Instrument 43-101. Technical information contained in this release has been reviewed by Dr. David A. Terry, P.Geo., a Qualified Person as defined by National Instrument 43-101.
Kootenay is an emerging exploration Company actively developing a suite of premier gold and silver projects in British Columbia, Canada and Mexico. The Company's top priority remains the ongoing aggressive development of its rich Promontorio Silver project, which encompasses the former producing Promontorio Silver Mine in Northwest Mexico. Supported by an experienced and accomplished technical team, over the past four years Kootenay has substantially grown its mineral asset base through key acquisitions, while successfully achieving four new mineral discoveries in the Rossland Republic Gold Trend of British Columbia.
For additional information, please contact:
James McDonald, CEO at 403- 238-6986
Ken Berry, President at 604-683-2214; 1-888-268-8688; www.kootenaygold.ca
Note to values in the following text: 1000 ppb (parts per billion) = 1 gram per tonne gold and 10,000 ppm (parts per million) = 1%.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release. Cautionary Note to US Investors: This news release may contain information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
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