Manitou Gold Acquires Gaffney Extension Project; Historical Drill Intersections up to 5.3 g/t Au over 21.8m
January 20, 2011
Sudbury, ON – Manitou Gold Inc. (TSX-V: MTU) is pleased to announce that it has signed a binding letter agreement wherein Manitou Gold has been granted the exclusive right to a 100% interest in an exploration property located in the Kenora Mining District, known as the Gaffney Extension project.
The Gaffney Extension is located in the Lower Manitou Lake Area approximately 60 km southwest of Dryden, Ontario. The property hosts a prominent, underexplored gold bearing shear zone which has been traced over a strike length of 440 meters and to a vertical depth of 243 metres. Diamond drilling by previous operators (1984, 1988) intersected multiple zones of gold mineralization including 5.0 g/t Au over 21.9 m (TN-10), 5.3 g/t Au over 21.8 m (TN-29), and 6.0 g/t Au over 7.1 m (TN-23). Additional results of some of the better historic drill intersections are detailed in Table 1 of this news release. A map and long section illustrating these intersections can be found in Gaffney Extension page of the Properties section of the Company’s website (www.manitougold.com).
“The Gaffney Extension is a significant acquisition for Manitou Gold. The impressive gold grades and widths reinforce our concept that the Manitou Straits Deformation Zone displays characteristics comparable to major gold camps of the Abitibi subprovince, which indicate the potential to host multiple gold deposits.” stated Manitou Gold CEO Richard Murphy. The Kenwest Project, which is a past gold producer, is situated 28 km to the northeast of the Gaffney Extension, along this same structure, and is currently being drilled (see press release dated January 12, 2011). Both the historical results on the Gaffney Extension and results from Manitou’s recent drilling emphasize the exceptional exploration potential of this area.
The Gaffney Extension gold bearing zone has been tested (previous operator) with only 4,042 m of diamond drilling (1984, 1988), to a maximum vertical depth of 243 meters. The zone remains open along strike to the northeast and the southwest and is open at depth. Historical drill intersections on the Gaffney Extension include a number of lower grade wide intersections, including 1.7 / g/t Au over 25.9 metres (TN-30). The average prices for gold in 1984 and 1988 were $361/oz and $447/oz respectively, and may have been considered sub-economic at the time the drilling was completed. Many of these lower grade areas were not fully sampled into barren material.
Table 1: Historic holes at Gaffney Extension
|DDH#||From (metres)||To (metres)||Width (metres)||Au g/t|
Under the terms of the letter agreement, Manitou Gold can acquire a 100% interest in the Gaffney Extension Project in exchange for the payment of $70,000 in cash and the issuance of 700,000 common shares of the Company, over a three year period.
Upon Manitou Gold earning its 100% interest in the Gaffney Extension project, the optionors will be entitled to a net smelter royalty (“NSR”) of 2.5% on production generated on the project. Manitou Gold may at any time purchase up to 1.25% of the NSR from the optionors (resulting in the Optionors holding a 1.25% NSR) by making a cash payment of $1,250,000.
Securities issued pursuant to the definitive option agreement are subject to a four month hold period from the date of issuance. Completion of the transaction is subject to approval of the TSX Venture Exchange.
The Company has not verified the exploration results reported herein and has confirmed neither grades nor widths described. Detailed descriptions of these historic exploration programs were included in assessment work filed by Teck Exploration Ltd. with the Ontario Ministry of Northern Development and Mines in 1984 and 1992.
About Manitou Gold
Manitou Gold Inc. is a well-funded gold exploration company focused with a dominant land position in the Gold Rock Mining Camp, located in the Kenora Mining District, in Northwestern Ontario. The Company’s largest shareholder is Goldcorp Inc, who holds a 15% interest in the Company.
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The Qualified Person responsible for the technical content of this news release is Todd Keast, P. Geo., Vice President, Exploration of Manitou Gold Inc. Mr. Keast has verified all of the technical data contained in this release.
Statements in this release that are forward-looking statements are subject to various risks and uncertainties, certain of which are beyond the control of the Company including, but not limited to, the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of exploration results and estimates and that the resource potential will be achieved on exploration projects, currency fluctuations, dependence upon regulatory approvals, the uncertainty of obtaining additional financing and exploration risk. Readers should also refer to the specific factors disclosed under the heading "Risk Factors" in the Company's filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume any obligation to update any forward-looking statements, save and except as may be required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.