🕐02.03.11 - 16:27 Uhr
ARMISTICE RESOURCES COMMENCING MAJOR SURFACE DIAMOND DRILLING PROGRAM ON MCGARRY
AND KERR-ADDISON GOLD PROPERTIES
*PRESS RELEASE
ARMISTICE RESOURCES CORP.
For Immediate Release*
Armistice Resources Commencing Major Surface Diamond Drilling Program on
McGarry and Kerr-Addison Gold Properties
Armistice commencing $2.5 million drilling program, initially for
60,000 feet on McGarry and Kerr-Addison properties
Armistice moving into pre-production mode at the McGarry Mine gold
projects underground operations in the second half of March, with the
goal of meeting planned start-up of gold production in 2011 fourth quarter
Proceeds of recently completed financing to fund new drilling program
and pre-production work
Toronto, ON March 2, 2011 Armistice Resources Corp.
(TSX: AZ), which expects to begin gold production in the 2011 fourth quarter from its McGarry
Mine gold project in the Kirkland Lake area of northeastern Ontario, today announced that it is commencing a major surface diamond drilling program
on its McGarry and Kerr-Addison properties.
The new drilling program will be initially for 60,000 feet and is estimated to cost about $2.5 million.
The company expects delivery of a diamond drill
within the next week.
For some months now, our geological staff has been reviewing the previous drilling results on the McGarry property, as well as selected historical data
available for the Kerr-Addison property, said Todd J.
Morgan, President and Chief Executive Officer of Armistice.
Our review of the Kerr-Addison property data included underground and surface diamond drilling results that were obtained between the late 1930s and
1996.
Although the Kerr mine was once Canadas largest gold producer, yielding 11 million ounces from 1938 to 1996, the fact is that only a small
percentage of the Kerr-Addison property has ever been explored through a drilling program.
Our initial review has identified a number of gold zones
that we believe have the potential to be mined economically.
We will be looking to our new drilling program to confirm this view, Mr.
Morgan continued.
In December 2010, Armistice signed an Option Agreement to purchase 100% of the former Kerr-Addison Mine property, making the first of five $500,000
payments and issuing 2.0 million common shares to the group of private investors controlling ownership of the property.
The new surface drilling program on the McGarry Mine gold property
follows a successful surface exploration program that the company
completed in
late 2009.
The analysis of that drilling program was very positive
regarding the existence of additional economic gold zones on the McGarry
property.
*Drilling Program Overview*
We have recently completed a preliminary review of the extensive data
found in the historical documents of the former Kerr-Addison Mine
property, including drill logs, plans, and reports, Erik Andersen, P.
Eng., Armistices Vice-President and Chief Operating Officer.
From this
review, Armistice has made preliminary interpretations of the data to
establish priority target areas for our initial surface drilling program
on the Kerr-Addison property.
We have identified seven priority and five
secondary target gold zones for drilling on the two properties.
The
locations of the zones are shown on the attached map (Figure 1), and are
briefly discussed below.
Kerr-Addisons archive is not well organized and we cannot verify any
of the data at this time.
Also, we cannot be certain that the portion of
the data evaluated is complete for the areas selected for the initial
drilling program that the company will carry out.
Our planned surface
drilling program also includes the continuation of the successful
surface exploration drilling and sampling program that we completed on
our McGarry property in 2009, Mr.
Andersen continued.
*Priority Drill Targets*
*Mill Zones 1 & 2*
The Mill Zones have been identified by historical diamond drilling on
the 1,000-foot level and from historical surface drilling.
The zones are
fairly well-defined over a strike length of 2,000 feet.
On the 1,000 ft
level there is indication of a zone 5-to-15-feet wide and grading in the
order of 0.10 to 0.15 oz/ton.
From surface to 1,500 feet below surface
there are at least 23 holes with intersections of 0.1 oz/ton or better
over a core interval of at least 4 feet.
The widest is 0.15 oz/ton over
a core interval of 13.4 feet and the highest grade is 0.85 oz/ton over a
core interval of 5 feet (two of these).
In addition, two surface holes
believed to correspond to the Mill Zone drilled in the 1940s intersected
0.12 and 0.15 oz/ton over core intervals of 67 and 57 feet,
respectively.
The Mill Zones are located 900-to-1,500 feet south of the
main production areas in the former Kerr-Addison mine and in proximity
to the G Zone discussed below.
The indication of gold zone widths in excess of 50 feet and strike
lengths to 2,000 feet in the Mill Zones has led to placing this as one
of the priority targets for the initial phase of drill testing on the
Kerr Addison property.
*G Zone*
The G Zone was mined by Chesterville Mines Limited prior to the
amalgamation of its holdings under Kerr Addison Mines Limited in the mid
1950s.
Mining occurred between 875 and 1,750 feet below surface.
The G
Zone was not mined on the Kerr-Addison side of the property boundary as
it existed then.
Exploration drilling between 1988 and 1992 extended the
zone to the east, west, and down dip.
The G Zone is located between the
former main production areas and the Mill Zones.
Historical drilling along strike from the mined part of the G Zone
includes at least 27 holes with intersections in excess of 0.1 oz/ton
over core intervals of at least 4 feet.
Two of the best results were
0.30 oz/ton over a core interval of 33 feet and 0.76 oz/ton over a core
interval of 5 feet.
The near surface potential of the G Zone and the strike continuation
potential of this former production area have led to placing it as one
of the priority targets in the currently planned drill program.
*Green Giant Zone*
The Green Giant Zone was discovered by diamond drilling from underground
on the 1,000 ft Level in 1994, two years before the Kerr-Addison mine
was closed.
The gold zone is several hundred feet north of the former
workings in the Mine.
Diamond drill results were published in a news
release issued by the then owners of the Kerr-Addison mine property, AJ
Perron Gold Corp.
in October 1994.
_Hole Number Gold Assay (ounces per ton / feet of drill core length)_
10-658 0.155 oz/t over 35 feet
10-660 0.182 oz/t over 13 feet
10-661 0.730 oz/t over 4 feet (or 0.200 oz/t over 12 feet)
10-663 0.167 oz/t over 7 feet with visible gold
10-665 0.202 oz/t over 5 feet (or 0.103 oz/t over 21 feet)
10-666 0.146 oz/t over 13 feet
Armistice has not verified these results, but they are interpreted as
pointing to a very important target for future diamond drill testing.
*Chesterville East Zone*
The Chesterville East Zone was originally discovered in an underground
exploration program by Chesterville Mines Limited in the 1950s but was
not followed up on until the 1980s and 90s in an underground drifting
and drilling program.
Past work on this zone was concentrated between
1,600 and 3,100 feet below surface.
Previous operators recommended drill
testing the up dip potential from surface but this work was never
undertaken.
Figure 2, attached, presents a summary of the historical exploration
results.
It is planned to drill test the up dip potential of the
Chesterville East Zone as a priority target area in the currently
planned drill programme.
*Armistice Mill Zone*
The Armistice Mill Zone on the McGarry property is interpreted on the
same general strike as the Mill Zones on the Kerr-Addison property.
The
Armistice Mill Zone was discovered early in the history of the camp and
has been tested by several previous campaigns.
Previous operators
appeared to have had difficulty in determining continuity of the
intersected gold zones.
Armistice tested the zone by diamond drilling in 2009 and reported the
results in a news release dated January 20, 2010.
A cross-section
interpretation included in that news release, which shows the down dip
continuity and assay results, is attached (Figure 2).
The Armistice Mill Zone is interpreted to have very good potential for
the discovery of economic gold zones along strike and at depth and
therefore will be a priority target in the planned surface exploration
program.
*McGarry Near Surface*
Since the 1940s, exploration for gold zones above the 1,250 Level at the
McGarry mine gold project has been limited.
Armistice has previously
identified the area above the 1,250 level as a priority area for
exploration since mining infrastructure already exists to service
production from this area.
Armistice carried out the initial phase of
near-surface drilling in 2009 and reported the results in a news release
dated April 28, 2010.
The results reported confirm the continuation to
surface of the gold zones planned for mining in lower levels of the
deposit/.
/The 2009 drilling program covered a very limited extent of
the near surface area to be tested and continuation of the results
obtained remains a priority./ /
*Secondary Drill Targets*
Armistice re-examined in 2010 the historical Arjon Surface Showings,
identifying a trend of carbonate altered rocks with anomalous gold
values in grab samples over 1,500 feet of strike.
Seven of the best grab
sample values ranged from 0.17 to 0.03 ounces gold per ton.
This trend
is virtually untested by diamond drilling and warrants initial drill
testing to determine its potential for the discovery of new economic
gold zones.
The Kerr West Zone is identified from historical surface and underground
drilling by Kerr Addison Mines Limited.
A surface hole intersected 0.14
oz/t gold over 13 feet at about 185 feet below surface.
Most of the
underground drilling, done between 2,500 and 3,850 feet below surface,
intersected low-grade gold values within a green carbonate unit.
The
follow-up by previous operators is limited and the area warrants further
drill testing, especially since it would open up a new area within the
reach of the existing mine workings.
The Mill Zones 1 & 2 West occur within green carbonate altered rocks
within which low-grade gold intersections from surface drilling is
recorded in the historical record, including an intersection of 0.04 to
0.05 oz gold per ton over 55 feet.
Follow-up drilling is warranted to
determine if previous drill campaigns were based on a misinterpretation
of the dip of the zone.
The J Zone Deep includes historical drill intersections varying from
0.12 to 0.22 oz gold per ton over widths varying from 4-to-30 feet at
about 2,650 feet below surface.
Drill testing for up dip and along
strike continuation of the zone is warranted.
The J Zone may be the
western extension of the Chesterville East Zone.
We will continue to compile and evaluate the historical data from the
former Kerr-Addison Mine and we anticipate that we will develop
additional near-surface targets, Mr.
Andersen said.
*Funding*
Our recently completed financings are enabling us to move aggressively forward with the planned exploration programs on the McGarry and
Kerr-Addison properties, as well as with our plans to be producing gold at the McGarry mine gold project by the fourth quarter of this year, Mr.
Morgan
said.
On February 22, 2011, Armistice announced that it closed a $3 million bridge loan and executed a term sheet for a $15 million Senior Secured Gold Stream Debt Facility with Waterton Global Value, L.P.
(Waterton).
As announced, under the terms of the proposed gold facility, Armistice will be able to access the $15 million of funds in three tranches.
The first tranche of $7 million is to be provided by Waterton immediately on the initial closing date of the facility agreement, expected to take place within 60 days of the initial announcement.
The second tranche of $4 million will be accessible five months after the initial closing date, subject to Armistices satisfaction of certain development and processing targets.
The third tranche of $4 million will be available nine months following the initial closing date, again subject to Armistices satisfaction of certain development and processing targets.
Armistice agreed to apply a portion of the first tranche drawn under the Gold Stream Debt Facility to repay in full any and all amounts outstanding under the $3 million bridge loan provided by Waterton.
*Qualified Person***
The exploration program reported on here is supervised and managed by
Erik Andersen, P.Eng., Vice-President and Chief Operating Officer of
Armistice Resources and a Qualified Person as defined by National
Instrument 43-101.
Mr.
Andersen has reviewed and approved this news release.
*About Armistice Re**sources Corp.*
Armistice Resources, a Canadian-based exploration and development company, expects to begin gold production in the 2011 fourth quarter from its
McGarry mine gold project in the Kirkland Lake area of northeastern Ontario.
The McGarry project is located in Virginiatown on the prolific Larder
Lake-Cadillac Break that extends 200 km east-west straddling the Ontario and Quebec border and that has produced 95 million ounces of gold.
The McGarry project is adjacent to the former Kerr-Addison Gold Mine that produced more than 11 million ounces of gold.
Armistice has signed a
definitive five-year option agreement for the purchase of up to 100 percent of the mineral rights on the Kerr-Addison property.
The McGarry project
consists of 33 contiguous patented mining claims, including three licenses of occupation, totaling 484 hectares.
The McGarry project is fully permitted
and all equipment and systems at the site have been brought up to standards, including its installed mining plant.
Armistice Resources is listed on the
Toronto Stock Exchange (Symbol: AZ) and currently has 101,042,006 common shares issued and outstanding.
To find out more about Armistice
Resources, please visit the companys website at www.armistice.ca.
*Forward-Looking Statements*
This news release contains forward-looking statements, including
completion of the financing facility and current expectations on the
timing of the commencement of production.
These forward-looking
statements entail various risks and uncertainties that could cause
actual results to differ materially from those reflected in these
forward-looking statements.
Such statements are based on current
expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such
statements.
These uncertainties and risks include, but are not limited
to, the strength of the Canadian economy; the price of gold;
operational, funding, and liquidity risks; the degree to which mineral
resource estimates are reflective of actual mineral resources; the
degree to which a pre-feasibility study gives sufficient grounds for
classifying the indicated mineral resources as probable reserves; and
the degree to which factors which would make a mineral deposit
commercially viable are present; the risks and hazards associated with
underground operations.
Risks and uncertainties about Armistice
Resources business are more fully discussed in the companys disclosure
materials, including its annual information form and MD&A, filed with
the securities regulatory authorities in Canada and available at
www.sedar.com and readers are urged to read these materials.
Armistice
Resources assumes no obligation to update any forward-looking statement
or to update the reasons why actual results could differ from such
statements unless required by law.
//
For further information:
Investor and Media Relations
Richard W.
Wertheim
Wertheim + Company Inc.
Email:
416-594-1600 ext.
223
416-518-8479 (cell)