VANCOUVER, British Columbia, Oct. 9, 2012 /PRNewswire/ -- Lori McClenahan, President of St. Elias Mines Ltd. (SLI - TSX.V) (Frankfurt Exchange: EKL) (U.S. Clearing Symbol: SELSF) and Intigold Mines Ltd. (IGD - TSX.V) provides the following update with respect to the Cueva Blanca gold property located in northwest Peru. The property is owned 100% by St. Elias Mines Ltd ("St. Elias"). Intigold Mines Ltd. ("Intigold") has an option to acquire a 60% interest in the property.
As previously reported, St. Elias and Intigold have initiated field studies in the Cueva Blanca area in preparation for diamond drilling. This work has primarily consisted of community relations activities to re-establish the strong community connection (participation and support) that St. Elias enjoyed during its previous exploration programs at Cueva Blanca. Other activities include data compilation and re-interpretation as well as other required preparatory studies. At this time, it is anticipated that very little fieldwork will be required prior to mobilizing drilling equipment and crews to the site. The initial drilling targets include the Cruz Vein, the Cruz breccia bodies and a stratiform silicified zone that has anomalous bismuth-mercury geochemistry. The economic targets at the Cueva Blanca Property are gold and silver.
The first phase drilling program is budgeted at $2.5-million. This program will consist of approximately 10,000 metres of drilling. The primary target of the drill program will be the gold-silver-bearing Cruz Vein System. The target areas are along strike and downdip from the previously drilled area of the vein. Infill and confirmation holes will also be completed in certain sections of the previously drilled areas of the vein system. In these areas, detailed information is lacking because rough terrain prevented the construction of drill platforms at the desired 50-metre spacing along strike. The planned program will utilize man-portable drills that can be sited almost anywhere, whereas all previous drilling was done with a Longyear LF-70 skid-mounted drill that required road access.
Cueva Blanca Property Agreement
The Company and Intigold have entered into an agreement whereby St. Elias and Intigold have agreed to amend certain terms of the option agreement whereby St. Elias granted to Intigold an option to earn a 60% interest in the Cueva Blanca Property (refer to news release dated May 9, 2011 for details regarding the option agreement). The agreement has been amended to remove the retention of a 1.5 % net smelter return royalty and to provide for Intigold to earn an option to acquire a 60% working interest with St. Elias retaining a 40% working interest. All other terms remain the same. Intigold can acquire a 60% working interest from St. Elias in consideration of Intigold making cash payments of $200,000 to St. Elias over a two-year period, issuing one million common shares in the capital of Intigold to St. Elias and incurring $1.5-million in exploration expenditures on the property over a three-year period.
Cueva Blanca Property
The Property covers approximately 5,800 hectares (58 square kilometres) and is located in the Lambayeque department in northwestern Peru, within the northern Peru Miocene metallogenic belt. This belt is defined by a large number of world-class gold and copper-gold deposits of similar age (five million to 25 million years) including Yanacocha, Lagunas Norte and Pierina. Also of great importance are world-class copper-gold porphyry deposits, such as Rio Blanco, Canariaco, La Granja, Cerro Corona, Minas Conga-Galeno-Michiqillay, Magistral and Antamina. The giant gold deposits and the Cu-Au porphyries often occur in clusters (for example, Yanacocha-Conga-Galeno-Michiqillay). Discrete vein- and breccia-hosted deposits of gold and polymetallic mineralization occur adjacent to some copper porphyry deposits.
The Cueva Blanca property is bordered to the south and southeast by mineral concessions of Vale SA, and Barrick Gold holds extensive mineral concessions four kilometres to the north.
The Property lies within the northern member of a pair of profound east-west tectonic warps that cross northern Peru. These flexures are marked by an abrupt change in the direction of the regional geological trend from northwest to east-west. Within the southernmost of these tectonic features are the multimillion-ounce Yanacocha gold mine and numerous Cu-Au porphyry deposits. Both the northern and southern structures are on the order of 60 to 80 kilometres wide; they extend right across the Andes from the Pacific Ocean to the Amazon River basin.
The locations of the giant Yanacocha gold mine and other gold deposits and Cu-Au porphyries of the Cajamarca district may be controlled or at least influenced by east to northeast structures within the large-scale southern tectonic flexure. The Cueva Blanca Property, as well as the Canariaco and Rio Blanco Cu-Au porphyries and gold prospects such as Las Huaquillas (Inca One) and Rio Tabaconas (Golden Alliance) appear to be within the northern tectonic flexure.
An important feature of the Cueva Blanca Property is the Cruz gold/silver epithermal vein system. Some examples of exceptional classic epithermal deposits with geologic characteristics broadly similar to the Cruz vein system are Kupol (Russia), El Penon (Chile), and Tayoltita, Guanajuato and Pachuca (Mexico).
Exploration History
Exploration at Cueva Blanca followed a classic pattern: acquisition based on geologic reasoning, property-wide prospecting and subsequent discovery of precious metal showings, detailed surface exploration of these showings and other mineralized zones followed by an initial exploratory diamond drilling program. The historic drill assays and the analytical results from the surface geochemical samples provide an indication of the gold-silver potential of the property and warrant continuing exploration.
The previously announced exploration and confirmation work program that was conducted in 2011 consisted of sampling of outcrops and trenches at the Cruz Vein System. Fire assays of irregularly spaced samples along a strike length of 850 metres returned a length-weighted average grade of 2.84 grams per tonne (g/t) gold across an average width of 4.3 metres. These results are not representative of the true grade, width or length of the vein system, because the sample locations were restricted to natural outcrops and trenches excavated in areas of shallow overburden, at arbitrary points along an 850-metre strike interval of the vein system. However, the results are consistent with sample results from earlier programs in the same area, and at the least they provide an incomplete and preliminary indication of the dimensions and grades of the exposed sections of the vein system.
Historic exploration work on the Cruz Vein System included 91 trenches and 18 drill holes totalling 1,860 metres. The drilling tested a 300-metre segment of the vein system, named "Zone 1". This work established that the Cruz quartz veins have consistently anomalous gold and silver grades, and that the vein system appears to be a classic epithermal gold-silver deposit. The highlights of the 1997 Cruz Vein drill program include core intervals (not true widths) of six metres of 2.31 grams per tonne ("g/t Au") in DDH CB-01, six metres of 2.96 g/t Au in DDH CB-03 (including 1.75 metres of 7.45 g/t Au), 1.5 metres of 22.68 g/t Au in DDH CB-5, 9.5 metres of 8.09 g/t Au in CB-17 (including 1.5 metres of 35.84 g/t Au), and 10.8 metres of 2.41 g/t Au and 1.2 metres of 6.95 g/t Au in DDH CB-22. Every one of the twenty-two historic diamond drill holes intersected the Cruz vein system, but three of the 22 holes, which were adjacent step-out holes (DDH CB-8, CB-10 and CB-12) within a 100-metre long segment of the vein system, intersected sheeted veins with higher than normal calcite content. These calcite-dominant veins reported lower-than average gold grades. Gold assays from the other nineteen higher-grade drill holes ranged from 0.9 g/t Au to 35.84 g/t over core lengths of 0.95 metres to 10.8 metres.
The quartz-carbonate Cruz veins contain virtually no sulphides; the veins outcrop strongly along strike in three main multi-vein sheeted zones (Zones 1, 2 and 3). All of these sheeted vein zones are exposed on low ridges along the trace of the vein system, and each exposure is approximately 300 metres long. The sheeted veins can be traced from outcrop to outcrop through the intervening stream gullies but they are poorly exposed in the low ground. The vein system as a whole outcrops sporadically along strike to the southeast and northwest of the drilled area for a distance of approximately three kilometres. The historic exploratory drilling only tested a 300-m segment of the vein system (Zone 1) to true depths of 40 metres to 100 metres, and only five of the 22 holes were drilled as deep as 100 metres (true depth, not hole length). All five of these deeper holes intersected the Cruz vein system.
While the companies have no reason to doubt the accuracy of the historic results, the existing data should not be relied upon until the Companies' own exploration work confirms that the data meet National Instrument 43-101 standards for disclosure. Historic results and the work that generated them predate the enactment of National Instrument 43-101, and may not meet the requirements of that policy.
Qualified Person
The technical content of this news release has been verified by George Sivertz, P.Geo, a Canadian geologist with extensive experience in Peru who is a qualified person as defined in National Instrument 43-101, standards of disclosure for mineral projects.
"Intigold and St. Elias are extremely pleased with the continuing advancement of the Cueva Blanca Property, which is known to host gold-silver mineralization in epithermal vein systems," states Lori McClenahan, President and Chief Executive Officer.
For additional information about Intigold Mines Ltd. and its projects, please visit us at www.intigold.com or call 1-888-895-5522 (toll free US and Canada). For information about St. Elias Mines Ltd. visit www.steliasmines.com or call 1-888-895-5522 (toll free US and Canada).
ST. ELIAS MINES LTD. & INTIGOLD MINES LTD.
(Signed "Lori McClenahan")
Lori McClenahan,
President
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts 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, 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.
St. Elias Mines Ltd.
Intigold Mines Ltd.
Suite 304 – 700 West Pender Street,
Suite 304 – 700 West Pender Street,
Vancouver, British Columbia
Vancouver, British Columbia
Canada V6C 1G8
Canada V6C 1G8
Telephone: (604) 669-4677
Telephone: (604) 669-4677
Facsimile: (604) 669-9626
Facsimile: (604) 669-9626
Toll Free: (888) 895-5522
Toll Free: (888) 895-5522
Website: www.steliasmines.com
Website: www.intigold.com
Trading Symbol: TSX-SLI
Trading Symbol: TSX-IGD
SOURCE St. Elias Mines Ltd.; Intigold Mines Ltd.