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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 29, 2011) - Kenai Resources Ltd. (TSX VENTURE:KAI) ("Kenai") is pleased to provide a update on drilling at the Sao Chico gold project in north central Brazil. High grade gold assay results have been received from the independent lab for four core holes. Two strongly mineralized gold zones have been encountered from the results of 16 core holes that have now been completed over a strike length of 500 meters, for a total of approximately 2,200 meters so far drilled in the first phase 3,000 meter program. Sulphides have been encountered to a downhole depth so far of 186 meters or 158 vertical meters. Mineralization is open at depth and along strike.
As detailed below, the initial exploration target is for a potential high grade deposit in the range of 1.1 million to 2.2 million tonnes.
Official assays for NI 43-101 reporting purposes have been received from ACME Analytical Laboratories (Chile) S.A. for the first six holes, with additional unofficial preliminary assays received for the seventh hole from the nearby Serabi Mining plc Palito mine assay laboratory. No results have yet been received for subsequent holes, but high interest sulphide bearing core samples from holes 8 to 16 have been submitted to both ACME and Palito, with assays pending.
The assay data now received include the results shown in the table below, showing reasonable correlation between the ACME and Palito assays. The estimated true widths shown have been estimated having regard to the surveyed dip of the vein where intercepted, ranging from about 80� to the south at higher levels, to near vertical at greater depths. All holes are drilled at 55� declination from the horizontal, with an azimuth of approximately 10�.
he assay data above have been interpreted on an initial longitudinal section, as shown below. 
The drilling plan for the first phase 3000 meter program is shown below. Holes 10 and 12, for which early results are soon expected, and holes 13 and 15, are testing the Highway Zone area, about 500 meters along strike, east south-east of the Waldimiro Drive. 
In the drilling plan above, the SCDP numbering sequence is the plan as originally laid out. The actual chronological sequence is shown with the 11-SC numbering.
The overall 3000 meter diamond drilling program is scheduled to be completed during December, with an updated NI 43-101 report soon thereafter, assessing initial mineral resources and also metallurgical testwork which is under way at the SGS Lakefield laboratory in Ontario, Canada.
Sao Chico Initial Exploration Target: Potential Size 1
The interpretation of the mineralization is based on the Sao Chico block model shown below, and on information from the nearby Serabi Mining plc Palito high grade, narrow vein underground gold mine2, which is hosted in the same Paruari suite of intrusive granites as Sao Chico.
1The derived estimates are prepared in keeping with NI 43-101, Part 2, Section 2.3 and clause 18 of the Australian JORC Code.
2Mineral Resource and Mineral Reserve Estimate for the Palito Mine, Par� State, Brazil, as at 31 March, 2008, Mello, R and Guzm�n, C, NCL Brasil Ltda, September 2008.
Mineralization is interpreted to occur as a sub-parallel series of sub-vertical lenticular bodies of quartz and disseminated to massive sulphides, hosted within wider altered granite zones. The potential area for mineralized zones is outlined by the location of over 200 small shallow garimpeiro shafts indicated in the figure above, all of which produced gold historically. This shows an east-west strike length 1,000 meters by 600 meters north-south, within a broader AP12386 exploration licence area of 1,416 Ha.
The mineralization and structural setting appears to be similar to the Palito gold mine, as shown below, where 25 sheet-like structures have been identified, approximately 1200 meters along strike, 800 meters laterally and 250 meters deep, each typically 1.2 to 2 meters in width.
For the conversion of volumes to tonnages, specific gravity estimates have now been completed in duplicate for 18 high grade intercept core samples, with a range of 2.61 to 4.13, for an average of 2.93 or, expressed in bulk density terms, 2.93 tonnes per cubic meter.
To estimate the exploration target potential at Sao Chico, the following parameters have been applied:
| Case |
low estimate |
high estimate |
| Strike length of vein structures |
500m |
750m |
| Cumulative sulphide/quartz vein width |
5m |
5m |
| Vertical depth of vein structure |
150m |
200m |
| Derived volume |
cubic meters |
375,000 |
750,000 |
| Bulk density |
tonnes per cubic meter |
2.93 |
2.93 |
| Derived tonnage |
|
1,100,000 |
2,200,000 |
| Grade assumption |
g/t gold |
12 |
15 |
| Derived contained gold |
ounces |
424,000 |
1,060,000 |
The Sao Chico target potential tonnages and grades above are conceptual in nature. There has been insufficient exploration for a defined mineral resource and it is uncertain if further exploration will result in the delineation of such a mineral resource.
About Sao Chico
The project is more completely described in Kenai's NI 43-101 Technical Report on the project, details of which were contained in Kenai's news release of January 20, 2011. It has since been filed on SEDAR and on Kenai's website at www.kenairesources.com.
Sao Chico is located within the Tapajos region in Brazil, the site of one of the biggest gold rushes in recent history. In the late 1970's and 1980s, approximately 500,000 garimpeiros rushed to the region to exploit extensive areas of newly discovered alluvial gold, producing approximately 20-30 million ounces of gold before the easily won alluvial gold deposits were largely depleted. Little modern exploration has been conducted over the region to date.
As previously advised, ASX-listed Gold Anomaly Ltd via its wholly owned Brazilian subsidiary GOAB, until Kenai exercises its options to acquire 50% and then 75% equity in GOAB, holds the Sao Chico mineral rights to the Sao Chico project in consideration for loan funds provided by Kenai for activities to date at Sao Chico. The options expire on September 3rd, 2012.
About Kenai Resources
Kenai is a Canadian company focused on precious mineral project exploration and development, towards early significant gold production. In addition to the Sao Chico gold project in Brazil, Kenai is also involved in exploration of the wholly-owned Quartz Mountain and Hope Butte epithermal gold projects in South-Eastern Oregon, both located in Malheur County, close to the Oregon border with Idaho. Kenai's current indicated and historical gold resources from the two Oregon projects are summarized as follows:
| Project |
Tonnes |
Grade |
Ounces AuEq |
Status/Classification |
| Quartz Mountain |
15,050,200 |
0.80 g/t Au |
352,667 |
Indicated Resources NI 43-101 compliant |
| Hope Butte |
5,000,000 |
0.91 g/t Au |
146,300 |
Historical, not NI 43-101 compliant |
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