Dec 24 2013
COLORADO RESOURCES LTD. ("Colorado" or the "Company") and SnipGold Corp. ("SnipGold") are pleased to announce they have entered into an Option Agreement, where Colorado has the right to acquire up to an 80% interest in the southeastern quarter of SnipGold's Iskut Property.
The optioned area, which encompasses 6,745 ha and includes the Khyber Pass, Sericite Ridge, Inel and Pyramid Hill copper-gold mineral occurrences, will be explored jointly with an adjoining area of 22,201 ha recently acquired by Colorado.
When taken together, these two areas (collectively referred to as the "KSP Property", (see attached figure), will include 38 Minfile mineral occurrences and cover approximately 300 km2. The KSP Property is located approximately 15 km along strike to the southeast of the past producing Snip Mine which, from 1991-1999, produced over 1 million ounces of gold at a recovered head grade of 24.5 g/t Au (BC Minfile).
To view the Map, please visit the following link: http://media3.marketwire.com/docs/JV_Tenure_Area.pdf.
At Khyber Pass, SnipGold has reported exploration work from 1983-1990 outlined an open-ended, 400 m wide x 1,200 m long gold in soil anomaly. Of the 1,100 soil samples taken, the average assay result was 810 ppb Au with individual samples returning assays up to 60 g/t Au. A total of 29 short drill holes totaling 3,241 m were completed in 1985, 1987 and 1990. These holes were drilled in multiple orientations over 3 small targets, each measuring less than 150 m x 150 m. Drill hole GO85-3 returned 74.7 m of 2.19 g/t Au and KB87-17, returned 61.3 m of 1.83 g/t Au. Higher grade intercepts include drill hole GO85-3 which returned 3 m of 9.5 g/t Au).
Sericite Ridge and Pyramid Hill are located between 2-7 km east of Khyber Pass and cover large alteration systems with significant copper and gold values.
At Inel, exploration work from 1980-1991 peaked in 1988 with 570 m of underground development and 54 underground drill holes totaling 4,258 m which tested the Discovery zone. Within the centre section of this zone, underground drill hole U88-3 returned 4.1 m of 26.37 g/t Au (BC Minfile).
Historical technical data suggest that the KSP Property has good potential to host both high grade gold as well as bulk tonnage copper-gold mineral systems. SnipGold and Colorado now control greater than 90% of the known mineral occurrences within a 600 km2 district of very high mineral potential.
The Option Agreement includes aggregate cash payments by Colorado of $500,000 ($50,000 on signing) and exploration work commitments of $6,000,000 ($500,000 in year one), over a 4-year period to earn an initial 51% interest ("Initial Interest"). Colorado may earn an additional 29% interest by making further work commitments of $4,000,000 (the "Additional Interest"). Upon Colorado acquiring an Initial Interest, the parties will form a conventional, participating joint-venture under which should either party dilute their interest below 15%, that party's interest will be reduced to a 1.5% NSR, one-half of which can be purchased for $2,000,000.
Subject to TSX Venture Exchange ("Exchange") approval, Colorado has agreed to contribute $150,000 in a SnipGold equity financing on a non-brokered private placement basis in accordance with Policies of the Exchange.
Adam Travis, President and CEO of Colorado Resources, said "Snipgold's founders are to be commended for assembling one of the most significant mineral landholdings in northwestern British Columbia. Exploring the KSP Property fits well with our team's technical strength. Our planned exploration program will be aided both by new geological models developed in the Kerr Sulphurets Camp by both Seabridge Gold Inc. and Pretium Resources Inc. as well as by recent infrastructure development which has brought roads and power lines to the area's doorstep. We look forward to an exciting 2014 field season, one in which we plan to continue to advance exploration on the North ROK Property as well as undertake initial exploration on the KSP Property with a view to prioritizing numerous targets for future drilling. Colorado is currently funded to meet both of these exploration objectives for the 2014 field season."
SnipGold's CEO John Zbeetnoff reports, "I am very pleased to enter this Agreement with Colorado. Colorado is well funded and their technical team has demonstrated exploration expertise that, I believe, will benefit shareholders of both companies. This Option Agreement marks the first transaction that gives SnipGold the opportunity to advance a portion of our Iskut Property with meaningful expenditures while, maintaining minimal share dilution. SnipGold will continue to seek additional strategic alliances through other earn-in arrangements or undertake exploration through self-funded work programs on the remaining portions of its extensive land package."
Qualified Person
Dr. Jim Oliver, Ph.D, P.Geo. is the Qualified Person as defined by National Instrument 43-101 who supervised the preparation of the technical data in this news release.