Oct 5 2012
COLORADO RESOURCES LTD. is pleased to announce that it has entered into an Option Agreement with Sunrise Resources (TSX VENTURE:SHI) ("Sunrise") to acquire up to a 75% interest in the Eldorado Copper-Gold Property located in northern British Columbia.
The Eldorado property covers the Eldorado and Bonanza Minfile copper-gold showings located approximately 7 km along strike to the northeast of the Red Chris Cu-Au deposit where Imperial Metals on May 7, 2012 announced it has received its Mine Permit. With mine development to include a 30,000 tonne per day milling operation and related open pit mine with reserves of 301.5 million tonnes grading 0.359% copper and 0.274 grams per tonne gold.
Mineralization on the Eldorado Property was first discovered by Texasgulf (now Xstrata) in 1975, and in 1979 they optioned the property to Esso Resources who carried out further soil sampling, I.P geophysical surveys and trenching before drilling 4 holes totaling 640.4 m in two small areas on the property. Although results were generally sub-economic 3-meter intersections grading up to 0.23% copper and 0.79 g/t Au in quartz-carbonate altered volcanics and intrusives were encountered.
The property lay dormant until 1995 when Homestake optioned the property from Falconbridge (now Xstrata) and completed another small program of soil, silt and rock sampling. Soil test pits returned values to 1296 ppb gold and 2489 ppm copper (0.25% Cu) at depths to 1.9 meters but generally low values near surface suggesting a glacial clay horizon present below the soil level may be masking underlying metal concentrations. Rock chip sampling of 1980 trenches returned values up to 1500 ppb Au and 0.35% copper over 3 metre intervals.
In 2004 Amarc Resources conducted a 16.6 line kilometer Induced Polarization and Magnetometer Survey and the collection of 276 conventional soil samples on trend to the east of the previous work, this work extended the previously known IP anomaly a further 500 metres to the east and also discovered a new open ended 700 m in diameter IP anomaly 1.5 kilometres to the north.
Despite the encouraging soil and rock geochemical results combined with the expansion of a previously know I.P anomaly only 6 kilometres east of Imperial Metals proposed East Zone Pit and only 500 m NW of their proposed tailing storage facility no follow-up work has been completed on the property since 2004.
Given the geological similarities and proximity to the Red Chris deposit, the presence of alkalic porphyry style alteration combined with indications of copper-gold mineralization and limited but encouraging soil and rock geochemistry, the Eldorado property is considered a highly prospective, but poorly tested porphyry Cu-Au target.
Consideration for the Option includes aggregate cash payments of $200,000 ($50,000 on signing) and exploration work commitments of $4,000,000 ($1,200,000 in year one), over a 3-year period to earn and initial 65% interest ("Initial Interest"). Colorado may earn an additional 10% interest my making a further cash payment of $1,000,000 (the "Additional Interest"). Upon Colorado acquiring the Initial Interest, the parties will form a conventional joint venture which will include the standard dilution clauses should either party dilute their interest below 15% that party's interest will be reduced to a 1% NSR which can be purchased in entirety for $2,000,000.
An underlying two per cent NSR royalty is reserved for the original vendors, which may be purchased in entirety for $2,000,000.
"I have been working in the Red Chris area now for over 25 years and I am thrilled to have the opportunity to aggressively explore this key property on the doorstep of Imperial Metals Red Chris Property," said Adam Travis, Colorado Resources Ltd. President and CEO.