St. Elias Mines Ltd. �� Diamond
Drilling Commences - Tesoro Gold Project in Peru
Vancouver, B.C. August 17, 2011 Lori McClenahan, President and CEO of St. Elias Mines Ltd. (SLI
- TSX:V), announced today that diamond drilling has commenced at the Tesoro Gold Project in Peru. The
10,000-metre drilling program has been designed to test near-surface and
deeper-seated geophysical anomalies identified by Titan 24 geophysical surveys.
The Company has engaged the
Peruvian subsidiary of Energold Drilling Corp.
(TSX-EGD) to conduct the initial portion of the drilling program to test the
near-surface targets. An additional diamond drill rig, with a deeper drill
capacity, is slated to commence drilling in October, 2011 to test the
deeper-seated targets.
The initial series of drill
holes will test the "Zona Central IP
Anomaly" in the A4, A5, A7 and A8 vein areas of Zona
Central. The drill holes will test high-priority drill targets identified by
Titan 24 geophysical surveys and the down-dip extensions of known gold
mineralization.
The Zona
Central IP anomaly, located beneath Zona Central, is
a chargeability anomaly that measures >16 milliradians
("pink"). The anomaly is a bowl-shaped feature measuring
approximately 1,800 metres by 1,700 metres by 1,300 metres. There are
northwest-southeast lineaments (faults or structures) associated with this
anomaly that are coincident with known mineralized structural trends on the
Tesoro Property. Within the large IP anomaly there is a zone of higher
chargeability that measures >18.5 milliradians
("red") that is oriented in a north-south direction. The centre of
the southern end of the "red" chargeability anomaly is 600 metres
below surface. Three-dimensional images of this anomaly are available on
the Company's website "www.steliasmines.com"
(pink and red colours correspond to chargeability
anomalies of > 16 and > 18.5 milliradians
respectively).
The Zona
Central IP anomaly is located at the centre of a number of cross-cutting
structures and may be the source of the near-surface gold mineralization found
in the Zona Canchete, Zona Este and Zona Central.
A Brief History of the Tesoro
Gold Project
The
Tesoro Gold Project is 100% owned by the Company with no underlying royalties.
The property covers approximately 6,974 hectares (17,436 acres) and
is part of the prolific 300km X 30km Nazca-Ocoña
gold belt parallel to the Pacific coast of southwestern Peru. The Nazca-Ocoña gold belt has
a long mining history dating back to pre-Incan time. Gold
is associated with disseminated sulphides in quartz
veins and fractures within intrusive rocks. The continuity of the quartz veins
and fractures is very impressive in the Nazca-Ocoña
belt. While the veins tend to be narrow, the grade is significant and the
mineralized structures tend to extend along strike for several kilometers and
to depths of up to 1,000 meters.
To date, the Company has identified five mineralized zones with more than 50 quartz veins (having a total combined length of 9km) at the Tesoro Project and has carried
out underground exploration and development work on three of these
veins (C1, C2 and A4 Veins.)
The veins are mesothermal, indicating that the
vein structures may extend to considerable depths.
The Tesoro Property has never been evaluated to depth, or
to its full strike potential. This leaves a large potential for the
discovery of additional mineralization.
Private Placement
The Company has negotiated a non-brokered private placement of up to
2,500,000 units at a price of $1.80 per unit raising gross proceeds of up to
$4,500,000. Each unit will consist of one common share and one common share
purchase warrant (a "Warrant"). Each whole Warrant will entitle the
holder to purchase one additional common share at a price of $2.10 per share
for a period of 12 months from closing. The private placement is subject to
regulatory acceptance.
The Company will pay finder's fees of up to 8% of the gross proceeds
raised, payable in cash or common shares or a combination.
The proceeds of the private placement will be used for exploration
expenditures on the Company's properties and for general working capital.