Strategic Merchant Bancorp acquires third Nevada Project From Redstar Gold
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Press Release - Strategic Merchant Bancorp Ltd (TSX-V : SMB)
Strategic Merchant Bancorp acquires third Nevada Project From Redstar Gold
February 14, 2006 1:11:00 PM
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SMB has optioned a 65% interest from Redstar in a Large Gold-Mineralized Area in the Bullfrog District of Nevada!
"The quality of the project is apparent in the simple fact that of the 90 rock-chip samples we've collected across the area so far, only thirteen contain gold below detection, and most of those thirteen still contain strongly-elevated, gold associated, favorable trace elements." - Jacob Margolis US Exploration Manager for Redstar
Strategic Merchant Bancorp,(TSX.V: SMB) is pleased to announce our third Option agreement with Redstar Gold Corp. (TSX VENTURE:RGC). Strategic has acquired a sixty five percent interest in nearly five square miles of claims in the northern portion of the Bullfrog district in southwestern Nevada. The 65% optioned project, termed North Bullfrog, covers extensively altered volcanic rocks with widespread low-grade gold mineralization and high-grade veins. The area shares similarities to the productive gold mineralization at the Bullfrog mine six miles to the south, where Barrick Gold Corporation recovered approximately 2.3 million ounces of gold from several open pits between 1989 and 1999.
This is the third project acquired from Redstar as part of our "Strategic Alliance" with Redstar. Since Redstar announced its strategic alliance with AngloGold Ashanti and the AngloGold-Ashanti Database, last year, all the projects that have come out of that Database have been optioned by SMB. Jacob Margolis, Redstar's U.S. Exploration Manager, notes: "North Bullfrog is an exciting acquisition for us in terms of known areas of widespread gold mineralization and its proximity to a recently productive 2-million-plus, ounce gold deposit. In fact, a major district-scale normal fault zone appears to link our project with the Bullfrog mine area to the south, and veins in both areas share important characteristics, such as the presence of manganese-rich calcite. The area seems to have received little attention since the mid 1990's, when the gold price was declining rapidly. The quality of the project is apparent in the simple fact that of the 90 rock-chip samples we've collected ac! ross the area so far, only thirteen contain gold below detection, and most of those thirteen still contain strongly-elevated, gold associated, favorable trace elements."
The acquisition of The North Bullfrog was prompted by data contained in the Nevada databases obtained from AngloGold Ashanti. Follow-up sampling and field work by Redstar has confirmed the presence of widespread low-grade gold mineralization (0.01 - 0.03 ounces per ton (opt) gold) in pervasively-altered volcanic rocks as well as high-grade veins reaching 0.85 opt gold. Silicified wallrocks along veins also contain significant gold, with one such sample returning 0.27 opt gold. Further, the area contains gold mineralization within basement Paleozoic sedimentary rocks. Rock-chip assays of up to 0.033 opt gold have been obtained from fractured and altered shale, limestone and quartzite. The project represents a large low-sulfidation, volcanic-hosted epithermal gold system. Gold mineralization at the Bullfrog mine was associated with a fault system that occurs in a valley bottom and did not out crop. Wide spread low grade gold mineralization above the valley floors is a strong i! ndicator of the potential for the under explored recessive valley corridors within the project area to host high grade vein systems. There has apparently been no exploration since 1996, and previous drilling programs encountered significant low-grade mineralization in the project (Table 1).
Table 1
Examples of historic drill holes with low-grade gold mineralization(i)
From - To (ft)
Down-hole Length (ft)
Au (opt)
0-115
115
0.014
0-130
130
0.015
And 185-200
15
0.022
50-95
45
0.064
175-260
85
0.014
And 270-325
55
0.009
And 340-390
50
0.012
285-410
125
0.010
And 540-575
35
0.011
130-225
95
0.020
80-245
165
0.012
(i) Each gridline row represents one drill hole
The low-grade intersections reported here are only a sampling of what was encountered in previous programs, and SMB looks forward to releasing more results once data compilation is completed. The gold values are within the range of productive open-pit gold deposits in Nevada, and expansion of the known low-grade mineralization will be an immediate focus of the exploration program. Further, higher-grade veins and breccia zones appear to be under explored and would augment the lower grades.
Preliminary analysis indicates that there is opportunity to both expand the low-grade mineralization and identify and expand high-grade veins through additional exploration. Redstar is compiling substantially more previous exploration data and expecting to undertake, through its option with SMB surface evaluations and a drilling program during the coming year. Additional data regarding the project and the option agreement with SMB is expected to be released in the very near future
SMB is very pleased to be able to advance another quality Redstar Gold Corp. project. We are also encouraged by the fact that their exploration program and AngloGold-Ashanti database has led to this large area of gold mineralization that Redstar has acquired on a 100% basis. This follows the recently-announced Dry Gulch and Pine Nut projects and is a continuation of the commitment to the "Strategic Alliance" with Redstar.
ON BEHALF OF THE BOARD
"Neil Linder"
Mr. Neil Linder, President & CEO
Strategic Merchant Bancorp Ltd.'s exploration philosophy is to develop high priority gold targets on established gold properties that have been overlooked during gold¹s recent climb to between $500-$600. Our "Strategic Alliance" with Redstar Gold and their AngloGold Ashanti Database in Nevada gives Strategic Merchant Bancorp Ltd. first priority access to properties that Redstar acquires through knowledge gleaned from this $30 million database, The database is truly a goldmine of information. The database is an enormous, extensive geological database that really holds the secrets of an amazing amount of properties in Nevada. Good Projects are the most highly prized targets in Nevada and Strategic Merchant Bancorp has a direct pipeline to an almost inexhaustible supply of vetted Nevada Opportunities through this "Strategic Alliance" with Redstar Gold.
For further information please contact:
David Greenway
Investor Relations
1-800-663-4567 or 604-689-0896
Fax: 604-688-4933 |
