Eagle Plains Resources Ltd. (TSX-V: EPL) and Prize Mining Corp.
(TSX-V: PRZ) jointly announce that the companies have executed a
Letter of Intent containing the principle terms by which, subject
to the satisfaction of certain conditions, the two parties will
form a joint-venture to facilitate the production of gold and
conduct further exploration and development of the Yellowjacket
Zone on the Atlin Gold Property, located 9 kilometres east of
Atlin, in north-western British Columbia.
Under terms of the Letter of Intent, Eagle Plains will purchase
a 40% interest in the project by providing $2,000,000 CDN in
working capital. These funds will be used to clear existing liens
and obligations on the property, in addition to completing upgrades
of the existing mill facility and covering costs related to
engineering, permitting and environmental compliance. Eagle Plains
will in turn receive 60% of all net proceeds of production up to
$2,000,000, at which time it will revert to a 40/60 working
interest. Eagle Plains will have the option of increasing its
working interest to 60% by making payments to Prize totaling
$2,000,000 by the sixth anniversary. It is expected that commercial
production activity will commence by the third quarter of 2009. The
joint venture remains subject to regulatory approvals and other
customary conditions, including the execution of the definitive
purchase and joint venture agreement.
Yellowjacket Zone History
The Yellowjacket Zone of the Atlin Gold Property is accessible
year-round by all-weather road. The claims lie along the Pine Creek
valley which is an historic and continuing placer gold producing
area. Basic supplies and material to support mining activity can be
readily sourced out of Atlin, and specialty services may be secured
in Whitehorse, Yukon, located 180 kilometres north via Highway 7
and the Alaska Highway. Hydro-electric power has been recently
established to within three kilometres of the property
boundary.
The Atlin placer camp ranks as the second largest producer of
placer gold in the province. Mining has been the economic mainstay
for the town of Atlin since the discovery of gold on Pine Creek in
1897. The mineralized zone at Yellowjacket underlies significant
historical surface disturbance. Downstream topographical features
have rendered Pine Creek a "low-value" fish habitat.
Gold mineralization at Yellowjacket consists of coarse gold
hosted in quartz stockworks and silicified zones in brittle
volcanic and altered ultramafic rocks. Gold mineralization occurs
along a prominent fault structure which is interpreted to control
the distribution of placer gold reported in the area.
In 1983, local area prospectors staked the Yellowjacket
Property, and subsequently optioned the property to Canova and
Tri-Pacific Resources. During 1984 and 1985 these companies
conducted programs of ground geophysics, rotary and diamond
drilling. In 1986 Homestake Mineral Development Company optioned
the property from Canova and from 1986 to 1988 initiated programs
of mapping, reverse circulation drilling and diamond drilling (52
holes totaling 8,057 metres).
At the completion of this program, Homestake reported a resource
estimate of 453,500 tonnes grading 10.26 g/t (Schroeter, T.G. and
Pinsent, R.H; BC Ministry of Energy and Mines Open File 2000-2:
Gold Production and Resources in BC (1858 - 1998). (Though these
estimates are considered by Eagle Plains and Prize management to be
relevant, they were prepared prior to the institution of National
Instrument 43-101 standards. Their reliability has not been
confirmed, but will constitute a target basis for future
exploration work).
Prize Mining (formerly Muskox Minerals) optioned the property in
2003 and from 2003 to 2006 drilled 57 holes for a total of 6,873
metres. A number of impressive intercepts were encountered during
drilling, with values ranging from "no significant results" to
grades as summarized below:
-***-
Drillhole Interval Width Grade
YJ03-01 13.95m to19.51m 5.56m 513.5 g/t Au
YJ04-07 48.85m to 54.45m 6.10m 40.1 g/t Au
including: 53.95m to 54.45m 0.31m 588.9 g/t Au
TW05-02 10.67m to 12.79m 2.62m 853.0 g/t Au
including: 10.67m to 11.58m 0.91m 2,397.0 g/t Au
TW05-02 20.05m to 41.50m 21.45m 11.5 g/t Au
-****-
The general area encompassed by drilling covers approximately
300 metres x 100 metres, with the deepest mineralized intersection
encountered at 140 metres. The deposit appears to be open along
strike in both directions and to depth.
The Yellowjacket Zone coarse gold mineralization has a
pronounced "nugget effect" where adjacent samples within the same
mineralized zone can have widely varying gold values. This prompted
Prize in 2006 to proceed with a bulk-sampling program in order to
evaluate the deposit in an economic framework. Prize engaged a
number of prominent engineering, metallurgical and environmental
consultants to carry out permitting, pit design, mill design and
fabrication work. Regular consultation was made with the Taku River
Tlingit First Nation ("TRTFN").
Excavation activity commenced in 2007 under a 10,000 tonne bulk
sample permit. A modern milling facility was constructed, and
includes a 1000 kW generator, ball mill, SAG mill, feeders, pumps,
conveyors, three Knelson concentrators, magnetic separator, Diester
and Gemini tables and an on-site assay laboratory. Test work
indicated preliminary recoveries of 81%, with ore head-grades of
approximately 9.0 g/t gold. Test work done on the rock units
excavated from the pit have found them to be non-acid
generating.
Consultants retained by Prize have recommended modifications to
the mill circuit that are expected to increase recoveries to 90%
and capacity to 350 tonnes per day. Work from 2003 until present
has been carried out under the supervision of Linda Dandy, P.Geo.,
who will continue with the project as Mine Manager.
A photo gallery of the property and mill equipment may be found
here
http://picasaweb.google.ca/eagleplains4/SitePhotos?authkey=Gv1sRgCLuex4THmK72ZA#
Eagle Plains and Prize Mining presently intend to meet the
following objectives during 2009 pursuant to the joint venture
agreement:
* compile all existing geological, geophysical, environmental and
engineering data into a GIS database
* remove liens and encumbrances on the property
* complete application for BC Small Mines Permit (up to 75,000 tonnes per
year)
* complete modifications to existing mill facility
* resume milling of stockpiled ore
* dewater existing pit
* commence expansion of existing pit
* commence commercial production with target of 35,000 tonnes throughput
during Q3
* explore possibilities for year-round custom milling
* study feasibility of connecting to newly established hydro-electric
facility
* design and execute exploration program for future expansion
Tim Termuende, President and CEO of Eagle Plains, states, "We
are excited about participating with Prize Mining on this project.
We recognize the quality and incredible amount of work required to
bring the project to this stage, and are pleased to be able to
provide financial and technical assistance to advance it,
ultimately to the benefit of the local community, the Taku River
Tlingit First Nation, Prize Mining and shareholders of Eagle
Plains." Harry McGucken, President of Prize Mining, added, "We are
extremely pleased with this new association and what Eagle Plains
and its team bring to this project. The addition of their technical
expertise will now enable the project to get to the next level of
development for the benefit of all concerned."
The proposed Yellowjacket Joint Venture will be committed to
working on the Yellowjacket project in a sustainable and
responsible manner. The project is situated within the traditional
territory of the TRTFN, and as such, will only move forward with
the trust and support of the TRTFN leadership and membership, and
the people of the Atlin community. The project proponents look
forward to establishing a strong relationship with all
stakeholders, based on responsible economic and environmental
stewardship and mutual respect.
About Eagle Plains Resources
Eagle Plains Resources continues to conduct research, acquire
and explore metal projects in western Canada. The Company controls
over 35 gold, base-metal and uranium projects, many with third
parties including Teck Limited (TSX-V: TCK), Alexco Resource Corp.
(TSX-V: AXR), Sandstorm Resources Ltd. (TSX-V: SSL), Waterloo
Resources Ltd (TSX-V: WAT), Mountain Capital Inc. (TSX-V: MCI) and
XO Gold Resources Ltd. (a private B.C. company). These agreements
expose Eagle Plains to over $15.0 million in exploration
expenditures over a five year period. In recent years, Eagle Plains
has completed option agreements with Billiton Metals, Rio Algom
Exploration, NovaGold Resources, Kennecott Exploration and numerous
other junior exploration companies, resulting in over 52,000m
(158,500') of drilling and over $27.0 million in exploration
spending on its projects since 1998. 2008 expenditures on Eagle
Plains' projects were approximately $6,000,000, funded equally
between Eagle Plains and third party partners. In 2009, management
anticipates approximately $1.2 million in exploration expenditures
funded by partners.
This news release has been reviewed and approved by Tim J.
Termuende, P.Geo., hereby designated as a "Qualified Person" under
National Instrument 43-101.
On behalf of the Board of Directors
Signed
"Tim J. Termuende"
President and CEO
Cautionary Note Regarding Forward-Looking Statements
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. There
is no certainty that the parties will enter into the definitive
purchase and joint venture agreement. 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.
Distributed by Filing Services Canada and retransmitted by
Marketwire
For further information, please contact Mike Labach at: 1 866
HUNT ORE (486 8673) Email: Email Contact or visit our website at
http://www.eagleplains.com
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