Toronto, Canada: September 18, 2007 - NFX GOLD INC. (NFX: TSX Venture Exchange) ("NFX" or the "Company") is pleased to announce that it has signed a Letter of Agreement with Newstrike Resources Ltd. ("Newstrike")(NR: TSX Venture Exchange), allowing Newstrike to earn a 25% interest in NFX's 75% owned Swansea property (the "Swansea Property") located along the Larder Lake Break in northeastern Ontario.
Under the terms of the agreement, Newstrike has an option (the "Option") to earn an undivided 25% interest in the Swansea Property by incurring C$1,000,000 on exploration related expenditures on or before September 30, 2009, as follows:
- C$400,000 on or before September 30, 2008 ("Year One Expenditures")
- C$1,000,000 in the aggregate (including Year One Expenditures) on or before September 30, 2009.
In order to exercise the Option, Newstrike further agrees to issue to NFX 100,000 common shares of Newstrike, subject to the receipt of all required regulatory approval, as follows: i) 50,000 common shares within ten days after execution of the formal agreement, and ii) 50,000 additional common shares on or before October 31, 2009. The agreement remains subject to the satisfaction of several conditions, including the receipt of approval of the TSX Venture Exchange.
In a related transaction Newstrike independently acquired an additional 25% interest in the Swansea Property from an arm's length party. After the exercise of the Option, NFX and Newstrike shall constitute a 50/50 joint venture in respect of the Swansea Property.
The Swansea Property is located in McVittie Township, Ontario with its eastern boundary approximately one kilometer west of NFX's Larder Lake Property. The Larder Lake Property is comprised of the Fernland, Cheminis, N. Cheminis, BearLake and Barber Larder properties currently under an option and joint venture agreement (the "Larder Lake Property Agreement") with Maximus Ventures Ltd. ("Maximus"). Under the terms of the Larder Lake Property Agreement, Maximus has the option to earn a 60% interest in the Company's interest in the LarderLake property by completing exploration expenditures totaling C$6.0 million by December 31, 2008.
Maximus recently announced (Press Release, August 16, 2007) assay results from diamond drill hole NFX07-11 drilled on the BearLake claims of the Larder Lake Property. Sample assays from 2 new zones of gold mineralization in the hole graded 10.4 gpt1 Au over 5.2 m and 13.3 gpt Au over 6.0 m. The latter intersection occurring at a vertical depth of 550 m is reported as typical of the Kerr Addison mine "flow-ore" style of mineralization. The Kerr Addison mine "flow-ore" produced 23 million tons at a grade of 0.33 opt2 Au (11.31 gpt Au). The Kerr Addition Mine also produced an additional 15 million tons at a grade of 0.23 opt Au (7.88 gpt Au) from "green-carbonate" style mineralization. Historic production and resources at the Cheminis and Fernland Mines include both "flow-ore" and "green-carbonate" style mineralization.
The east-west striking LarderLake fault is the principal structure along which the significant gold deposits of the LarderLake area occur and include; the Kerr-Addison, Chesterville, Armistice, Barber Larder, Cheminis, Fernland and Omega deposits. The "flow ore" mineralization occurs within volcanic flow horizons adjacent to the LarderLake fault near intersecting northeast striking faults. The high grade drill intersections recently reported by Maximus occur near the intersection of the northeast trending BearLake fault and the LarderLake fault.
The LarderLake fault continues westward from the Omega deposit across the approximate 4 km length of the Swansea Property. Historic drill results from the Swansea property reveal several intersections of gold mineralization that may warrant follow-up drilling. The most significant intersection from a historic report3 on the Swansea property indicates 4 diamond drill holes were completed in 1987 including hole SW-87-4 that contained an intersection from 372.4 to 378.5 meters grading 0.30 opt Au (10.28 gpt Au) over 6.1 m including 1.179 opt Au (40.42 gpt Au) over 1.5 m. Some historic follow-up drilling was completed of the SW-87-4 intersection and the historic data is being compiled to determine the extent of the mineral zone and whether additional drilling is warranted.
The higher grade deposits in the LarderLake camp are notably at depths below 300m. Above 300m the deposits tend to be weaker grade and/or often form smaller lenses or shoots. The recent MaximusBearLake drill hole intersections and the Swansea historic drill hole intersections are at vertical depths of 550m and 320m, respectively.
A program of surface prospecting, alteration and lithogeochemical sampling is expected to begin shortly on the Swansea property. Favourable alteration zones and historic shallow low grade drill hole intercepts near the intersection of northeast trending fault structures and the LarderLake fault will be primary targets for deep drilling.
The technical content of this news release has been reviewed by Mr. Alexander S. Horvath, P. Eng., a qualified person for NFX under the guidelines of National Instrument 43-101.
For further information please contact either Thomas G. Larsen, President and Chief Executive Officer of NFX or Jorge Estepa, Vice President of NFX, at: telephone: (416) 360-8006; fax (416) 361-1333 or Don Rankin, director of Newstrike at (416) 628-6556.
1 gpt is the grade in grams per tonne Au
2 opt is the grade in ounces per ton Au
3 The historic report dated June 25, 1987 is titled "Report on the Swansea Property, Ontario" and was prepared for Eldor Resources by Derry, Michener, Booth and Wahl.