|May 29, 2007|
GENERATIVE - Santa Lucia Update
Vancouver, BC -- Kootenay Gold Inc. ("Kootenay") (TSX-V: KTN) and Klondike Silver Corp. (TSXV: KS) are pleased to announce the Update Report from on the Santa Lucia project in Mexico.
Santa Lucia is located in southern Sonora State, Mexico and is comprised of two concessions covering about 9,350 hectares. Mineralization is comprised of classic epithermal and mesothermal style quartz veining, silicification, stockwork and breccias.
Two areas of identified mineralization occur, one on the north part of the project and a second on the south part of the project. Combined, alteration and mineralization of the two zones covers over 20 square kilometers. The zones are about 12 kilometers apart. Grab samples taken by Kootenay Gold range from background to 648 grams per tonne (GPT) silver and 12 gpt gold (as analyzed by 34 element ICP with an AA assay finish on silver and gold conducted by ALS Chemex in Vancouver, B.C.) Given the large extent of mineralization in multiple structures and host rocks potential for the discovery of a medium to large sized deposit of silver and gold is considered good.
The Company has recently concluded detailed airborne EM and Magnetometer surveys along 1254 line kilometers spaced 75 meters apart and acquired a data set from exploration in the late 1990's. The historic data consists of 1526 soil samples, 450 rock chip samples from hand and mechanical trenches, geologic mapping, and a ground magnetometer survey covering a 12 square kilometer area.
The airborne survey was the AeroTEM system flown by Aeroquest Limited. The survey was successful in mapping structural trends and in identifying discrete coincident EM and magnetic anomalies indicating the potential for both new areas and extensions to known areas of mineralization. Magnetics has mapped the structural trends controlling known mineralization and shown that these structures continue for significant distances beyond identified mineralization. Four distinct EM anomalies have been identified. These anomalies are focused along intersecting structural zones and in one case along an arcuate trend possibly reflecting a caldera like ring fracture system. They are important as the highest grades of gold and silver are associated with higher sulfide contents and the EM may be caused by higher sulfides. The anomalies vary from elongate 80 to 200 meter wide zones 3000 meters long to broad zones 350 meters by 650 meters to circular highs 80 meters across.
The historic data acquired is for the southern part of the project only. This work identified 4 targets two of which have been traced for 2 kilometers of strike. The zones consist of individual quartz veins up to 3 meters wide and of silicified stockwork and breccias between 50 and 100 meters wide. This work also indicates silver and gold mineralization is found with deeper style mesothermal veins and shallow type epithermal veins. Values of silver and gold range from background to over 500 gpt silver and 34 gpt gold. The arithmetic mean of all the mechanical trenching on the property was 7.2 meters at 0.75 gpt gold and 19.56 gpt silver. Highlights form trench results include 18 meters of 1.10 gpt gold and 3.8 gpt silver; 10.5 meters of 0.93 gpt gold and 50 gpt silver; and 3.0 meters of 4.7 gpt gold and 18.2 gpt silver. All samples were analysed by Bondar Clegg of Vancouver B.C. using 34 element ICP with an AA assay finish. It is reported that a small program of only 17 drill holes was conducted in 1999 and the company is working on obtaining that data. It is believed this work did not encounter ore grade mineralization but may aid in the understanding of controls and targeting future drilling. All data is historic in nature cannot be considered NI43-101 compliant and therefore should not be relied upon.
The new airborne data and old historic data are being integrated into a GIS system to aid planning the next exploration program which is being designed to identify a number of drill targets. It is expected this program will entail some detail mapping assisted by select trenching to help establish controls and may include some ground geophysics. Lessons learned from this work will be used to design a drill program for sometime in the fall.
Kootenay has granted Klondike the right to earn a 50-per-cent interest in the Santa Lucia Silver Project. To fulfill the terms of the option agreement Klondike must spend US$1,000,000 on exploration and issue 500,000 shares to Kootenay over a 3 year period (see June 6, 2006 news release). Technical information contained in this release has been reviewed by James McDonald, P.Geo., Director and CEO of Exploration for Kootenay, a Qualified Person as defined in 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 or
Ken Berry, President at 604-683-2214; 1-888-268-8688; www.kootenaygold.ca
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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