Kootenay's Expanding Generative
Program Reaches Milestone as Prospective Copper/Gold/Silver Concessions
Optioned to Pinecrest Resources
Kootenay Gold
Inc. (TSX.V: KTN) ("Kootenay") is pleased
to announce that it has entered into an Option Agreement with Pinecrest Resources Ltd. (TSX.V: PCR.P)
("Pinecrest") whereby Kootenay grants
Pinecrest the right to earn an undivided 50%
interest in the Espiritu property located in Sahuaripa,
Sonora State, Mexico.
The Option Agreement allows Pinecrest to
acquire a 50% undivided interest by issuing an aggregate 750,000 common
shares of Pinecrest, over 3 years, with 200,000
issuable within 5 business days after receipt of approval by the TSX
Venture Exchange ("TSXV") and spending US$1 million on the
property over 4 years. At completion of the earn-in a JV Agreement will
be formalized.
States Kootenay President and CEO James McDonald, "We are
pleased to have Pinecrest as a partner to begin
exploration of the Espiritu Concessions. The numerous showings identified
on the property to date, combined with overall size and strength of the
mineral system bode well for the discovery polymetallic
deposits at Espiritu".
The J/V agreement with Pinecrest represents
another milestone development for Kootenay and its generative team as the
Company continues to assertively form J/V agreements on its stable of
prospective properties that have been under development in Canada and
Mexico over the past four years.
Adds Kootenay Chairman Ken Berry, "In keeping with Kootenay's generative model to develop near term
discoveries and long-term sustainable growth, the Espiritu is a
large-scale target that warrants immediate further investigation and
drill testing. The J/V with Pinecrest will
allow Kootenay to fast-track exploration on Esiritu
as we continue to prioritize the aggressive ongoing development of our
core asset the Promontorio Silver Project in
Sonora, Mexico".
With the completion of the Pinecrest Joint
Venture, Kootenay has now successfully joint ventured 19 of their 100%
owned precious metals properties in Canada and Mexico. Collectively,
these strategic partnerships afford Kootenay minimal financial exposure
and up to $21 million in exploration and drilling expenditures over the
next 5 years."
The Espiritu polymetallic vein/breccia porphyry Property is made up of two mineral
concessions called Tarachi 2 and Tarachi 3 which total approximately 10,000 hectares,
located in Sahuaripa, Sonora Mexico. Minera J.M., S.A. de C.V., a wholly owned subsidiary
of Kootenay incorporated under the laws of Mexico, is the sole legal and
beneficial owner of the Espiritu Property.
On the Espiritu Property two zones of precious and base metal
mineralization have been recognized; the Northeast zone dominated by a
copper-gold-molybdenum porphyry setting is separated by a major fault from
the Southwest zone dominated by veins and stockworks
of precious and base metal mineralization.
Northeast Zone
The northeast Espiritu porphyry prospect is a 2.2 x 1.4 km sub-circular
area defined by a concentric pattern of zonation
diagnostic of copper gold porphyry deposits.
Ten wide-spaced diamond drill holes totalling
2,135 meters of HQ core were completed by Kootenay Gold in the Northeast
Zone in 2009-2010. Highlights include: 220.5 meters grading 0.15% copper
and 0.14 gpt gold in diamond drill hole ESP
06-10, including 12 meters grading 0.25% copper and 0.42 g/t gold.In addition, significant molybdenum grades were
encountered by Kootenay Gold in drill hole ESP 04-09 which intersected 18
meters of 0.113% Mo and 9 meters of 0.133% Mo and in ESP 06-10 returning
18 meters of 0.114% Mo and 9 meters of 0.133% Mo.
Additional drilling will be required to follow-up on the significant
molybdenum intercepts discovered in the initial drill program as well as
to test for higher grades of porphyry related copper and gold
mineralization.
Southwest Zone
The southwestern part of the system is represented by veins, breccias and
stockworks anomalous in silver, gold, copper,
lead and zinc. The main mineralization in the southwest is defined by
several zones spread out along a 2 km length. Fifty-eight grab samples
were collected by Kootenay Gold in 2009-2010 within the west, central and
eastern parts of the southwest polymetallic
vein/breccia zone. The polymetallic
veins averaged 226 gpt silver, 1.58% lead and
1.57% zinc associated with 0.18 gpt gold and
0.15% copper. From the 35 samples collected by Kootenay Gold in 2009-2010
from the polymetallic vein system, 29/35
assayed greater than 30 gpt silver and 18/35
were greater than 0.100 gpt gold. The PS-1 area
returned assays of 277 and 217 gpt silver
associated with anomalous lead (to 6%) and zinc(to
1.5%). The PS-2 zone gave values of 686, 644 and 487 gpt
silver and anomalous copper, lead and zinc from thirteen rock samples.
The foregoing geological disclosure has also been reviewed and verified
by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose of National
Instrument 43-101, Standards of Disclosure for Mineral Projects). Mr.
McDonald is a director of Kootenay.
About Kootenay Gold
Kootenay Gold is actively developing mineral projects in the Sierra Madre
Region of Mexico and in British Columbia, Canada. The Company's flagship
property is the former producing Promontorio
Silver mine in Sonora State, Mexico. The Company's objective is to
develop near term discoveries and long term sustainable growth. Kootenay's management and technical team are proven
professionals with extensive international experience in all aspects of
mineral exploration, operations and venture capital markets. Multiple,
ongoing J/V partnerships in Mexico and Canada maximize potential for
additional, new discoveries while maintaining minimal share dilution.
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For additional information, please contact:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
To view an interview with James McDonald visit: 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. 2011 number 5
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