VANCOUVER, BC (TSX-V: GXX) is pleased to announce the
acquisition, subject to TSX Venture Exchange ("Exchange") approval,
of the Trutch Sulphur project, located in northeastern British
Columbia. The Trutch Sulphur project consists of approximately 329
square kilometers (81,373 acres) of Mineral Tenures filed with the
British Columbia Ministry of Energy, Mines and Petroleum
Resources.
The Company's area of interest straddles the Alaskan Highway
(#97) at a point approximately 250 kilometers northwest of Fort St.
John, British Columbia, or 115 kilometers south of the railhead in
Fort Nelson, British Columbia. Three petroleum exploration wells
within this area were drilled during the late 80's and are first
referenced in the Province of British Columbia's Geological
Fieldwork 1988, page 531, and further sourced both in the Province
of BC's Capsule Geology Reports as well as the Society for Mining,
Metallurgy, & Exploration (SME) 1992 Annual Meeting as
follows:
Hole Coordinates: 57 46' 07" N, 122 55' 45" W. "A drillstem test
run for the depth interval of 10,465 to 10,710 feet intersected a
20ft showing of solid sulphur."
Hole Coordinates: 57 49' 52" N, 122 57' 30" W. "A major sulphur
showing occurred in this well hole in the Elk Point evaporates of
the Middle Devonian age... from 10,500 to 10,701 feet drill stem
testing recovered 90 feet of native sulphur."
Hole Coordinates: 57 44' 05" N, 123 09' 15" W. "The Middle
Devonian Pine Point beds consist of dolomite with strong secondary
mineralization showing pyrite, galena, sulphur and dolomite...
Sulphur crystals are common in dolomite from 10,490 feet. It has
been estimated there is 20 percent sulphur in the Pine Point
showing."
A paper titled "Frasch Sulphur Opportunities in British Columbia
and Alberta," presented by Z.D. Hora of the BCGS, for the S.M.E. in
1992 covered the earlier postulations proposed by V.F. Holister in
1977 and 1984 that the Western Canada Sedimentary Basin's potential
for native sulphur or Frasch sulpher deposits exists, having
anhydrite as a major component. Interpretations of the Company's
Coronation Sulphur deposit by Hollister in 1984, expanding on it's
discovery in 1966, can be used as a geologic model for other native
sulphur deposits that may be found in the British Columbian parts
of the Western Canada Sedimentary Basin. The above summarized drill
hole data, generated subsequent to Hollister's predictions, portray
his belief that anticlinal and fault traps have furnished sites for
the accumulation of petroleum, natural gas and sulphur.
Readers should note that the above information on historic work
performed on the property was done prior to implementation of
NI43-101, therefore the results spoken of do not comply with modern
reporting standards and should not be relied upon until such time
as additional work is completed on the property, including
preparation of an NI43-101 report.
Sulphur, primarily used to produce sulphuric acid, is an
essential element used in the production of many basic global
products including the production of Diammonium Phosphate or DAP, a
common fertilizer. With the demand for food production increasing
to meet the needs of expanding economies in heavily populated
portions of the world, in particular Asia, the use of fertilizers
to strengthen plant growth and increase crop production is also
growing. To meet the increased demand for fertilizer, Sulphur, long
relegated to by-product status, is now gaining attention to meet
today's increased demand. Keeping pace with other agricultural
products worldwide, Sulphur has seen dramatic increases in both
demand and pricing, having risen from $50 per tonne to $650 per
tonne in the past 15 months.
"What's the real reason food prices are skyrocketing. Is it the
corn ethanol and the weak dollar? Yes, but it's also the cost of
sulfuric acid, a key ingredient in fertilizer. Sulfur is fetching
$500 a ton, up from $50 just a year ago, meaning fertilizer demand
has pushed prices for the plant nutrient up 65 percent in the past
year -- faster than the 43 percent increase in farmers fuel prices
and a 30 percent increase in prices for seeds," says the Wall
Street Journal.
Currently, the major source of Sulphur in Canada has come as a
byproduct extracted from oil and gas production. In limited
circumstances, elemental Sulphur is found as a native mineral in
deposit form where modern mining methods such as Frasch in-situ
recovery ("ISR") can be utilized to extract the Sulphur, while
minimizing the footprint associated with this type of well head
mining. Historic Frasch Sulpher operations existed mainly in Texas
dating back as long as 80 years with present day operations by
Freeport McMoran being conducted off shore in the Gulf of Mexico
with 2 dedicated molten sulphur bulk carrier ships dedicated to
product delivery.
The Agreement: Cost of the acquisition of the Trutch Sulphur
project, acquired from arms-length vendors, includes payment of a
total of $210,000 and issuance of 800,000 shares of the Company as
follows:
$30,000 payable upon signing;
200,000 shares upon the earlier of Exchange approval, or 90 days
after execution of this agreement;
$40,000 and 200,000 shares due six months after Exchange
approval;
$60,000 and 200,000 shares due 18 months after Exchange
approval; and
$80,000 and 200,000 shares due 24 months after Exchange
approval.
The Vendors will retain a 2% Net Smelter Royalty, 50% of which
can be purchased from the Vendor for the sum of $2,000,000 at any
time after commencement of commercial production as defined in the
agreement. A finder's fee may be payable on the acquisition as per
TSX Venture Exchange regulations.
On Behalf of the Board,
"Patrick Morris"
Patrick Morris, President and CEO
Cautionary note: This report contains forward-looking
statements, particularly those regarding cash flow, capital
expenditures and investment plans. Resource estimates, unless
specifically noted, are considered speculative. The company has not
filed a National Instrument 43-101 report on any property, but will
do so as soon as the information is available. Any and all other
resource or reserve estimates are historical in nature, and should
not be relied upon. By their nature, forward-looking statements
involve risk and uncertainties because they relate to events and
depend on factors that will or may occur in the future. Actual
results may vary depending upon exploration activities, industry
production, commodity demand and pricing, currency exchange rates,
and, but not limited to, general economic factors. Cautionary Note
to US investors: The U.S. Securities and Exchange Commission
specifically prohibits the use of certain terms, such as "reserves"
unless such figures are based upon actual production or formation
tests and can be shown to be economically and legally producible
under existing economic and operating conditions.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information, contact Patrick Morris President and
CEO Telephone: (604) 641-4450 Facsimile: (604) 669-9335
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