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CRANBROOK, British Columbia–(BUSINESS WIRE)–Management of Omineca Mining and Metals Corp. (Omineca)(TSX-V:OMM) is pleased to announce that the Company has signed an Option to Purchase Agreement with Sierra Madre Developments Inc. (Sierra Madre)(TSX-V:SMG) whereby Sierra Madre may acquire a 100% interest in the Harrison Gold Project (also referred to as the Abo project) located in south western British Columbia.
The Property is 100% owned by Omineca and consists of 2,427 ha which were staked by Eagle Plains Resources in 2000 and subsequently transferred to Copper Canyon in 2006 as part of a Plan of Arrangement. Copper Canyon in turn transferred the Property to Omineca in 2011 as part of another Plan of Arrangement related to a take-over of Copper Canyon by NovaGold Canada Inc.
To exercise the Option, SMG must, on or before the fifth anniversary of TSX Approval, (a) pay to Omineca an aggregate $1,000,000; (b) deliver an aggregate of 4,000,000 Shares; and (c) incur an aggregate of at least $3,000,000 of expenditures on the Property
The cash payments, Shares and expenditures are herein collectively referred to as the “Option Price”. The Property is subject to a 2% Net Smelter Return Royalty payable to Omineca. Sierra Madre has the right to purchase 1% of the Royalty at any time for the sum of $1,000,000 in cash.
The claims cover several intrusion-related gold occurrences that have been intermittently explored by various operators since the early 1970’s. Approximately $4 – $7 million was expended by Abo Resources, Kerr Addison Mines Ltd., Bema International Resources Ltd. and Northern Continental Resources. Exploration work since 1970 has included a total of 19,490m (64,000’) of diamond drilling in 161 drill holes and small-scale underground development work. Most of the historic work was focused on the northern part of the Property in the area of the Jenner and Portal Stocks. Drill results reported from the Portal Zone include 30 meters averaging 3.17 grams per tonne gold (EMPR ASS RPT 19584). Drill results reported from the Jenner Stock include 64m averaging 3.77 g/t (EMPR ASS RPT 20144). Other gold-bearing stocks identified on the Property include the Hill and Lake Stocks. These areas have seen limited exploration in comparison to the Jenner-Portal Stocks areas. Diamond drill intersections reported from the Hill Stock area include DDH BX88-130 which averaged 3.54 g/t Au and 6.3 g/t Ag over 27 meters, and contained 8m averaging 8.7 g/t Au and 14.2 g/t Ag (EMPR ASS RPT 20144). The Property is road-accessible year-round. Hydroelectric power, natural gas and rail-service are located within 3 kilometers of property boundaries.
In 2002, Barry Price was retained by Eagle Plains to review a historic resource estimate calculated by G. Norman on behalf of Bema Resources for the Harrison Project based on historical results. Price estimated a Probable Resource for the Jenner and Portal Stocks of 1,845,000 tonnes averaging 2.79 g/t or 165,200 oz. in situ, with a further Possible Resource of 613,600 tonnes averaging 2.79 g/t or 55,100 oz. This resource estimate is based on historical data and is not in compliance with NI 43-101 definitions of a resource. Neither Price, Omineca nor Sierra Madre have done sufficient work to validate the above resource estimate. Neither Price, Omineca or Sierra Madre intend to imply that the above noted resources comply with current NI 43-101 definitions.
Sierra Madre CEO, Carl von Einsiedel, P.Geo. comments: “The Harrison Project represents an excellent opportunity for Sierra Madre to build shareholder value. The extensive exploration work carried out on intrusion related gold occurrences in the Yukon in last few years has helped develop new geological models and innovative exploration methods for these types of deposits. Much of the Harrison Property is relatively unexplored and the wealth of historic technical data will make it possible for Sierra Madre to leverage management expertise and quickly identify target areas that can build on the success of previous programs”.
Tim J. Termuende, P.Geo., President and CEO of Omineca stated “we are excited by this important advancement in the Harrison Project. Omineca shareholders have the potential to benefit significantly from the new structural arrangement through our share position in Sierra Madre. With this and our Net Smelter Royalty, we will retain continued economic exposure to the project, while the local presence and extensive technical expertise of Sierra Madres’ group will be of enormous benefit in advancing the project.”
Update on Kiwi Project, Yukon
Omineca has now received analytical results from a single drillhole completed during the 2011 summer season on its 100% owned Kiwi project, located 25km west of the North Canol Road in central Yukon. The claims overlie high-grade gold occurrences associated with intrusive rocks and north-west trending structures. Past operators reported in-situ visible gold with analytical values of up to 115 g/t gold and 32 g/t Ag reported from a grab sample at the VG Showing. A single drill hole (350m) was collared in the area of the VG Showing and intersected skarn-type alteration and brecciation including considerable sulphide mineralization, but failed to return significant gold values. Additional work is planned for the property in 2012.
About Omineca
Omineca Mining and Metals was created by way of a Plan of Arrangement on May 20th, 2011. Shareholders of Copper Canyon Resources Ltd. approved the plan to reorganize the Company’s mineral property assets in an effort to maximize shareholder value. Under the terms of the arrangement, two of Copper Canyon’s projects, Abo (Harrison) Gold and Kiwi, were transferred into Omineca on a one-for-four share basis.
On behalf of the Board of Directors
Signed
“Tim J. Termuende”
President and CEO
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
