2007-09-18 08:20 ET - News Release
Also News Release (C-NR) Newstrike Resources Ltd
Mr. Thomas Larsen of NFX Gold reports
NFX GOLD OPTIONS 25% INTEREST IN SWANSEA PROPERTY TO NEWSTRIKE RESOURCES
NFX Gold Inc. has signed a letter of agreement with Newstrike Resources Ltd., allowing Newstrike to earn a 25-per-cent interest in NFX's 75-per-cent-owned Swansea property located along the Larder Lake break in Northeastern Ontario.
Under the terms of the agreement, Newstrike has an option to earn an undivided 25-per-cent interest in the Swansea property by incurring $1-million on exploration-related expenditures on or before Sept. 30, 2009, as follows:
* $400,000 on or before Sept. 30, 2008 (year one expenditures);
* $1-million in the total (including year one expenditures) on or before Sept. 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 10 days after execution of the formal agreement and ii) 50,000 additional common shares on or before Oct. 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-per-cent 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 kilometre west of NFX's Larder Lake property. The Larder Lake property consists of the Fernland, Cheminis, N. Cheminis, Bear Lake and Barber Larder properties currently under an option and joint venture agreement with Maximus Ventures Ltd. Under the terms of the Larder Lake property agreement, Maximus has the option to earn a 60-per-cent interest in the company's interest in the Larder Lake property by completing exploration expenditures totalling $6.0-million by Dec. 31, 2008.
Maximus recently announced (see news in Stockwatch on Aug. 15, 2007) assay results from diamond drill hole NFX07-11 drilled on the Bear Lake claims of the Larder Lake property. Sample assays from two new zones of gold mineralization in the hole graded 10.4 grams per tonne (g/t) Au over 5.2 m and 13.3 g/t 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 ounce per ton Au (11.31 g/t Au). The Kerr-Addison mine also produced an additional 15 million tons at a grade of 0.23 ounce per ton Au (7.88 g/t 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 Larder Lake fault is the principal structure along which the significant gold deposits of the Larder Lake 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 Larder Lake fault near intersecting northeast-striking faults. The high-grade drill intersections recently reported by Maximus occur near the intersection of the northeast-trending Bear Lake fault and the Larder Lake fault.
The Larder Lake fault continues westward from the Omega deposit across the approximate four-kilometre 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 report(1) on the Swansea property indicates four diamond drill holes were completed in 1987 including hole SW-87-4 that contained an intersection from 372.4 to 378.5 metres grading 0.30 ounce per ton Au (10.28 g/t Au) over 6.1 m including 1.179 ounces per ton Au (40.42 g/t Au) over 1.5 m. Some historic follow-up drilling was completed of the SW-87-4 intersection and the historic data are being compiled to determine the extent of the mineral zone and whether additional drilling is warranted.
The higher grade deposits in the Larder Lake camp are notably at depths below 300 m. Above 300 m the deposits tend to be weaker grade and/or often form smaller lenses or shoots. The recent Maximus Bear Lake drill hole intersections and the Swansea historic drill hole intersections are at vertical depths of 550 m and 320 m, 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 Larder Lake fault will be primary targets for deep drilling.
The technical content of this news release has been reviewed by Alexander S. Horvath, PEng, a qualified person for NFX under the guidelines of National Instrument 43-101.
(1) 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.
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