Kings Bay Gold Signs Agreement with New Moon Minerals on Devil Lake High Grade Gold Project, Saskatchewan
King's Bay Gold Corporation (TSX.V-KBG) is pleased to announce, subject to regulatory approval, that it has entered into an agreement with New Moon Minerals Corp. to acquire a 50% interest in the high-grade gold Devil Lake project, located in the La Ronge Area, Saskatchewan.
The Devil Lake project is located approximately 90-km northeast of La Ronge Saskatchewan, 10 km north of the Village of Missinipe, and is directly accessible by highway 102. The property comprises 3 claims (919 hectares) covering gold showings discovered by Durama Enterprises Ltd. during 1995 and 1996 exploration programs. The property is adjacent to Golden Band Resources Inc.'s Bingo deposit where underground work is underway. The project is also close to the licensed Jolu Mill which is expected to commence processing gold in late 2010.
The property contains several gold showings, the two best so far being the Pit and SW-2 zones, which are part of a single trend made up of several parallel to sub-parallel mineralised units or structures that have been drill traced for over 400 metres. The initial discovery at the Thomas Pond showing was found in a northeast trending protomylonitic granodiorite plug with shear hosted quartz or quartz-calcite stringers containing pyrite and pyrrhotite.
Soil sampling, prospecting, trenching and sampling was completed on the property in 1995. Overburden removal was carried out to expose six trenches being (PIT, PIT-NE, SW-1, SW-2, Knob and B-1), which were mapped, grab sampled and channel sampled. Channel samples returned up to 12.69 g/ton Au over 0.60 m, 18.55 g/ton Au over 0.75 m, 77.81 g/ton Au over 0.25 m and 22.36 g/ton Au over 1.0 m.
Two small shallow drill programs, amounting to 1071 m in 29 holes were carried out. Better intersections included 2 m grading 15.12 g/t Au, 0.50 m of 14.57 g/t, 4.0 m of 7.65 g/t Au, 0.40 m grading 15.67 g/t Au and 0.30 m of 13.58 g/t. Visible gold was found in 9 drill holes.
The SW-2 zone has only been drill tested to a vertical depth of around 50 metres so far and is open in both strike directions and down dip. The Pit Zone has only been drill tested to about 45 metres in depth. All the sampling and analytical results above have not been confirmed or compliant within the 43-101 Guidelines and thus should be used only as a guide to further sampling and testing.
Source: P. Geo, R.H Spooner July 15, 1998 Geological Report and Saskatchewan Government assessment files. Verified by Andrew Gracie, PH.D. P.Geo.
King's Bay and New Moon are excited about the high potential of expanding or finding additional gold zones on this project where shallow drilling has not yet discovered the limits of the mineralization. The partners are planning a detailed exploration program which will include a re-examination of the property using the north trending Bingo deposit model.
Summary of the Terms of the Option/Joint Venture Earn-In Agreement
Upon and subject to the terms and conditions set out herein, New Moon Minerals hereby irrevocably grants to King's Bay the sole and exclusive right and option to earn a fifty percent (50%) interest in New Moon's Interest by funding Earn-In Expenditures of $50,000 in year one, $100,000 in year two and $300,000 in year three.
In addition to the earn-in expenditures outlined above, King's Bay shall issue shares to New Moon as follows:
On signing of this agreement 300,000 Common Shares
1st Anniversary of the agreement 500,000 Common Shares
2nd Anniversary of the agreement 500,000 Common Shares
3rd Anniversary of the agreement 500,000 Common Shares
Upon King's Bay earning the Earn-in Interest, New Moon Minerals and King's Bay shall be deemed to have entered into a Joint Venture Agreement in respect of the development, management and further exploration of the Property and, if deemed warranted, bringing all or a portion of the Property into production by establishing and operating a mine or mines thereon. The respective initial interests of New Moon Minerals and King's Bay in the Joint Venture will be fifty percent (50%) and fifty percent (50%). Property is subject to a 2% Net Smelter Return interest in favour of North-Sask Ventures Ltd.
KBG Shares Outstanding: 76,146,903
King's Bay Gold Corporation
John Archibald
President & CEO
(204) 253-4653
info@kingsbaygold.com
www.kingsbaygold.com
New Moon Minerals Corporation
Andrew Gracie,
Ph.D., P.Geo.,
APEGS, APEGM, APGO and CIM.
Chairman
204-782-5395
newmoonminerals@yahoo.ca
This news release includes certain forward-looking statements concerning the future performance of King's Bay Gold Corporation's business, its operations and its financial performance and condition, as well as management's objectives, strategies, beliefs and intentions. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. Forward-looking statements are frequently identified by such words as "may", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable. The Company makes no representation that reasonable
business people in possession of the same information would reach the same conclusions. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the speculative nature of mineral exploration and development, fluctuating commodity prices, competitive risks and the availability of financing and as described in more detail in the Company's recent securities filings available at www.sedar.com. Actual events or results may differ materially from those projected in the forward lookingstatements and readers are cautioned against placing undue reliance thereon. 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.
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