Key Gold Announces the Acquisition of the Musset Lake Copper Property Containing a Near Surface Historic Mineral Resource of 110
September 01 2010 - 10:24AM
Marketwired
KEY GOLD HOLDING INC. (TSX VENTURE: KGH) ("KGH" or the "Company")
Robert Seguin, president, is pleased to announce that Key Gold has
signed a Binding Letter of Agreement (the "Agreement") to acquire a
100% interest in the Musset Lake Copper Property (the "Property")
consisting of 82 mining claims covering 3,998.1 hectares or 40 km2.
The Property is located 90 km north of Schefferville (Quebec) and
can be accessed in the summer by helicopter and/or float-plane.
There is road access from Schefferville to New Millenium's KeMag
Iron Property located 40 km to the southeast.
Geology of the Musset Lake Copper Property
The Property hosts four copper showings centered on the Franelle
Copper Prospect ("Franelle"). Franelle is hosted by a northerly
striking near vertical dipping gabbroic intrusive that is
approximately 200 m wide and strikes the length of the claims
(about 5,000 m). Copper mineralization is disseminated in all parts
of the gabbro in varying concentrations. Enriched zones and
fracture controlled, higher grade mineralized zones are also
present. Copper minerals observed are chalcopyrite, chalcocite,
malachite and bornite. Accessory minerals are magnetite, ilmenite
and epidote. Franelle was discovered during a regional
reconnaissance program by Canada Tungsten in 1975. Six holes were
drilled in 1977 with the following results:
------------------------------------------------------------
DDH # Grade % Copper Core Length (m)
------------------------------------------------------------
77-1 0.19 49.5
------------------------------------------------------------
77-2 0.21 52.7
------------------------------------------------------------
77-3 0.29 173.4
------------------------------------------------------------
incl. 0.59 33.2
------------------------------------------------------------
incl. 0.80 14.9
------------------------------------------------------------
77-4 0.51 50.3
------------------------------------------------------------
incl. 0.86 25.3
------------------------------------------------------------
77-5 0.19 19.1
------------------------------------------------------------
77-6 0.19 202.5
------------------------------------------------------------
The drilling was followed by an estimation of "reserves"
(GM33646, 1977; Ministere des ressources naturelles et de la faune
Quebec or MRNFQ) totalling 110,000,000 tonnes grading 0.23% Copper.
This Mineral Resource is strictly historical in nature and is
non-compliant to the NI 43-101 Mineral Resources and Mineral
Reserves standards, and should therefore not be relied upon. A
Qualified Person has not done sufficient work to upgrade or
classify these historical Mineral Resources as current NI 43-101
compliant, and there is no guarantee that any future exploration
will convert part or all of the historical Mineral Resources to
current Mineral Resources.
The Property was then optioned to Outland Resources which
drilled 4 holes in 1987. The drilling was not filed for assessment
work but the core was logged and sampled by Fonteneau Resources
(GM53415). Hole 87-1 intersected 3 zones of mineralization; 0.74%
Copper over 23.2 m, 0.37% Copper over 20.1 m and 1.05% Copper over
3 m. In hole 87-2, 9.8 m of core was sampled for an average grade
of 0.83% Copper. Additional drilling was done in 1995 by Black Pine
Limited (GM53794). The results confirmed previous drilling results
and are summarized below:
-------------------------------------------------------
Grade Core Length
DDH # % Copper (m)
-------------------------------------------------------
96-1 0.28 19.8
-------------------------------------------------------
incl. 0.65 3.0
-------------------------------------------------------
96-2 0.26 12.2
-------------------------------------------------------
incl. 0.68 1.5
-------------------------------------------------------
96-3 0.36 23.3
-------------------------------------------------------
incl. 0.56 8.2
-------------------------------------------------------
96-4 0.24 40.8
-------------------------------------------------------
incl. 0.52 3.0
-------------------------------------------------------
96-5 0.29 43.4
-------------------------------------------------------
incl. 0.65 14.0
-------------------------------------------------------
96-6 1.35 4.9
-------------------------------------------------------
incl. 3.19 1.8
-------------------------------------------------------
96-7 0.36 31.7
-------------------------------------------------------
incl. 0.54 8.2
-------------------------------------------------------
96-8 0.56 39.0
-------------------------------------------------------
incl. 0.67 10.1
-------------------------------------------------------
96-9 0.22 43.0
-------------------------------------------------------
incl. 0.52 4.9
-------------------------------------------------------
96-10 0.22 66.8
-------------------------------------------------------
incl. 0.48 6.1
-------------------------------------------------------
96-11 0.24 81.1
-------------------------------------------------------
incl. 0.38 27.4
-------------------------------------------------------
96-12 0.17 50.0
-------------------------------------------------------
incl. 0.73 1.8
-------------------------------------------------------
96-13 0.20 77.1
-------------------------------------------------------
incl. 0.52 7.3
-------------------------------------------------------
96-14 0.32 80.8
-------------------------------------------------------
incl. 1.49 1.5
-------------------------------------------------------
96-16 0.15 56.7
-------------------------------------------------------
incl. 0.47 1.5
-------------------------------------------------------
96-17 0.19 51.8
-------------------------------------------------------
incl. 0.73 3.0
-------------------------------------------------------
96-26 0.23 62.4
-------------------------------------------------------
incl. 0.53 9.0
-------------------------------------------------------
96-27 0.42 79.2
-------------------------------------------------------
incl. 0.80 9.1
-------------------------------------------------------
96-29 1.12 32.0
-------------------------------------------------------
incl. 2.42 13.7
-------------------------------------------------------
Brassard (MB84-03, 1984) discovered two additional copper zones;
the Bennelle and Beluet showings. The Bennelle Showing is 1.1 km
long by 50 m, and is characterized by chalcopyrite and bornite in
gabbro. Grab samples and pack-sac drilling samples indicated copper
grades similar to the Franelle Showing with locally high
concentration of copper in bornite and covellite. The southeast
portion of the dyke is Uranium enriched. The Beluet Showing is
characterized by chalcopyrite and azurite in sandstone, the
surrounding host rock.
The Agreement
Under the terms of the Agreement, KGH in order to acquire a 100%
interest in the Property shall pay C$30,000 and issue 2,250,000
common shares to the vendors upon receipt of the approval of the
TSX Venture Exchange (the "Exchange"). The shares are subject to a
four month hold period from their date of issuance. The vendors
retain a 2% Net Smelter Returns Royalty (the "NSR") on the claims.
The NSR is subject to a buy-back clause, whereby KGH can purchase
1% for C$1,000,000 at any time. Moreover a finder fee of 300,000
common shares is payable for services rendered.
Concurrently with the acquisition and subject to regulatory
approval, Key Gold intends to complete a financing by way of
private placement through the issuance of common shares at a
subscription price of C$0.125 per share for aggregate gross
proceeds of up to C$600,000.
In addition, Key Gold has entered into agreements to convert
into equity certain debts amounting to up to $150,000 owing to
arm's length creditors at a price of $0.125 per share, subject to
regulatory approval.
The technical information in this news release was prepared,
revised and approved by Jean Lafleur, P. Geo., Technical Advisor to
the Company, a Qualified Person under NI 43-101 standards and
independent of the issuer.
About Key Gold Holding Inc.
Key Gold Holding Inc. is a junior mining exploration company
listed on the TSX Venture Exchange whose mission, among others, is
to invest in small-scale gold production projects and to provide
expertise in financial and mining engineering with the objective of
maximizing return on investments and shareholders' value.
Shares outstanding: 11 740 434
Neither the 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 news release. Statements made in this news release
that are not historical facts are "forward-looking statements" and
readers are cautioned that any such statements are not guarantees
of future performance, and that actual developments or results, may
vary materially from those in these "forward-looking"
statements.
Contacts: Robert Seguin President 418-781-0272
Robert.seguin@c2cgoldcorporation.com Louis Lessard Chairman
418-781-0272
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