Vancouver, British Columbia, Canada, Confederation Minerals Ltd. (TSX-V: CFM) (“Confederation” or the “Company”) has signed a Letter of Intent (“LOI”) to acquire 100% of the Tourmaline Queen and Golden Galena Project areas in Montana. The LOI calls for escalating annual payments totaling 320 oz of gold (cash equivalent to be determined based on Au price at time of payments, but would total US$ 400,000 at an average Au price of $1250/oz) over a five year period in order to acquire a 100% interest in the claims within both of the two Project areas, subject to a retained net smelter royalty. A Definitive Agreement will be prepared during the initial 90 day evaluation period for which CFM will pay US$ 12,500 (the cash equivalent of 10 ounces of gold).
The Tourmaline Queen Project area is located in the historic Elkhorn Mining District of Jefferson County, 22 miles southeast of Helena. The Elkhorn District has historic Ag-Au production from numerous mines over the past 100 years. By far the largest producer in the District was the Elkhorn Mine which had a recovered grade of 18.4 oz Ag/ton and .031 oz Au/ton (632 g/t Ag and 1.06 g/t Au). The land position here consists of 83 unpatented mineral claims and three patented claims, all of which are covered under the same LOI. These claims were initially explored by Mountain-West Resources in the 80’s and were explored in the 90’s under a Joint Venture with Santa Fe Pacific Gold. Some of the drill intercepts from Santa Fe Pacific’s drilling have been reported in a Mountain-West News Release (January 8, 1996) and in the Northern Miner (June 12, 1995 & Oct 30, 1995). These include:
|Drill Hole ID||Area||From feet||To feet||From metres||To metres||Interval feet||Gold oz/ton||Interval met||Gold g/ton|
Gold mineralization occurs in skarn and replacement pipes cutting lower Paleozoic sedimentary rocks and Elkhorn volcanic rocks. No silver values were reported.
The Golden Galena Project area is located in Madison County, 30 miles southwest of Bozeman. The area was explored in the 1980’s by Westmont (formally Nicor Minerals) and then by Newmont, under a Joint Venture with Westmont. Combined the Companies drilled 340 holes and spent over US$ 2 million on exploration, metallurgy and resource studies. Nicor drilled the first holes during the period 1983 to 1984, and their 4th hole intercepted 70 feet of 0.07 oz Au/ton (21.3 m @ 2.4 g/tonne). Gold mineralization is hosted along faults synthetic to a major northwest striking wrench fault zone that controlled emplacement and subsequent distention of the Tobacco Root Batholith. This regional fault system has been active since deposition of Proterozoic Belt sediments and several of these synthetic structures along the larger wrench fault localize structurally controlled gold mineralization. Intersecting northeast and northwest striking conjugate fracture sets control the location of the known deposits.
Carl Hering, President and CEO of CFM stated that “these two new projects are the first, but certainly not the last, of planned acquisitions for the Company. These claim blocks form corner stone land positions in two Districts with significant historic work and sizeable, pre-43-101 historic resources. It is our intention to apply state of the art technology and the company’s newly constituted technical team to define and expand the potential of the known mineralization.”
Drill results, sample and technical data are not National Instrument 43-101 compliant and historic in nature. The results have not been verified by the Company and are provided for context only and should not be relied upon for any evaluation of the properties or project or for any investment decision. Michael Collins, P.Geo. and V.P. Exploration and Development for Confederation Minerals has reviewed and approved this news release.
On behalf of the Board of Directors,
Confederation Minerals Ltd.
CEO, President, and Director
Confederation Minerals Ltd.
Suite 1980, 1075 West Georgia Street
Confederation Minerals Ltd. is a British Columbia based company engaged in the business of acquisition, exploration and development of mineral properties. Its objective is to locate and develop economic precious and base metals properties of merit. Confederation Minerals Ltd. owns 70% of the Newman Todd project in the Red Lake Mining District of Northern Ontario, as well as 100% ownership in another property in the Red Lake Mining District of Ontario.
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.