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Message: Mahdia Gold to explore Tiger River this summer

Mahdia Gold to explore Tiger River this summer

2010-05-18 17:21 ET - News Release

Mr. Alan Zaakir reports

Mahdia Gold Corp. has released details on its plans for exploration on 10 claims of the Tiger River property. Mahdia is is clarifying that it owns the mineral rights to only the following 10 claims on the Tiger River property, and these claims are numbered by their permit numbers with the Guyana government as ppms H92/001, ppms H92/004, ppms H92/005, ppms H92/006, ppms H92/007, ppms H92/008, ppms H92/009, ppms H92/010, ppms H92/011 and ppms T-66/000.

On these 10 claims the company will undertake an exploration program on the Tiger River property in the upcoming summer season after the rainy season ends in July. Aztek, the previous company that held Tiger River, had invited Newmont Mining to visit the Tiger River property a few years ago. Two of Newmont's exploration geologists came and did a site visit where a scope of work was recommended on the property. Mahdia's planned exploration program will include the valuable ideas suggested by Newmont Mining's exploration geologists in the upcoming exploration of Tiger River.

Highly mineralized gold area

The Tiger River property lies next to the Iamgold property, the Eagle Mountain gold property. Eagle Mountain has been explored by Iamgold and it has the potential to yield around one million ounces of gold. Mahdia Gold will now conduct a comprehensive exploration program on the Tiger River property.

Mahdia Gold has the rights to the following 10 claims only on the Tiger River property: ppms H92/001, ppms H92/004, ppms H92/005, ppms H92/006, ppms H92/007, ppms H92/008, ppms H92/009, ppms H92/010, ppms H92/011 and ppms T-66/000.

Private placement

The company undertook and closed a private placement to raise $160,000 at 15 cents per share. The funds will be used for working capital. The company will now budget for the upcoming exploration of Tiger River and raise sufficient funds in a planned June private placement for this exploration program of Tiger River. In a press release in June, shareholders of Mahdia Gold will have an opportunity to read the Newmont memo that resulted from the site visit to Tiger River under the invitation in previous years by Aztek Resource.

Tiger River potential

The following was extracted from a mineral report on the Tiger River property of work done by the Guyana government historically on the property and results of the government work. In 1971, a detailed, grassroots evaluation of the rich gold occurrences of the tributaries of Tiger River was undertaken by Guyana Geological Surveys and Mines Department. This survey examined the area containing the Johannes, Williams, Fate and Dazier creeks (all within the company's holdings). Inasi and Gibson of the Guyana Geological Survey prospected a 2.5-square-mile area enclosed in the southwest corner of the property. This report cited two areas with open pit possibilities in the Dazier creek and Goodhope creek headwaters, respectively. Between these two areas and along strike, laterite-covered hills have hampered prospecting in the past and excellent potential remains in the general area. The report from this survey describes many of the old underground and surface workings found in this area. In Williams creek head, at least seven adits and one shaft were driven. While most of these adits had collapsed, it seemed that some adits went deep into the hill. It is estimated that about 500 feet of adits remained open for further sampling and prospecting. One tunnel heading into the Williams creek section returned the following gold values as reported by The Financial Post on Aug. 9, 1947: 0.65 ounce of gold over 1.3 feet; 1.02 ounces of gold over two feet; 1.64 ounces of gold over 1.7 feet; 17.70 ounces of gold over one foot; 9.30 ounces of gold over 1.2 feet; and 9.25 ounces of gold over 1.4 feet.

At Williams Hill, located in the southwest part of the Tiger River property, a shaft was sunk on a three-foot-wide to four-foot-wide quartz vein. At Dazier creek, Williams (1935) reported quartz and ferruginous laterite or eluvial detritus which carried gold of local origin. Some selected material from this quartz vein yielded three ounces per ton gold. A tertiary paleochannel at Klondyke Hill, centrally located on the property, was tested by 1,000 feet of adits during 1905 and 1906. This activity produced 70 ounces to 80 ounces of gold per month by crushing the cemented gravels by hand and recovering the gold in a sluice. In 1947, a 10,000-foot drilling program intersected widely sheared volcanic rocks containing quartz veining and sulphide mineralization. The drilling campaign followed gold discoveries in quartz veins at Dazier creek, Williams creek and Fate creek. Another creek located only 1,000 feet northwest of Williams creek was the site of a former manual operation of auriferous quartz veins. The drill log reports (ddh319) a section of interesting mineralization associated with sulphides over a substantial width (no assays reported).

Based on these reports, the Goodhope creek in the vicinity of its intersection with the road and the Dazier creek area show promise of economic gold mineralization. Phyllites outcropping in the Goodhope creek area average 0.1 ounce per ton gold per cubic yard over 40-foot widths. Mineralization extends into quartz-veined epidiorite with an average grade of 0.075 ounce per ton of gold per cubic yard. The auriferous phyllites are known to occur at Fate creek and Williams creek. An east-west-trending zone of generally low grade but consistent mineralization was defined in the Dazier creek area where the gold occurs mainly in the weathered kaolinized material bordering quartz-bearing auriferous phyllites. Coarse gold was found in the weathered zone, and the Guyana Geology Mines Commission (GGMC) estimated a volume of 2.7 million cubic yards of mineralized material (grades implied were high but not documented). Good potential exists for lateral continuation of the gold mineralization to the workings on Williams Hill (end of extract from the mineral report on the Tiger River property of work done by the Guyana government historically on the property).

Additional opportunities

Mahdia is actively engaged with mineral rightholders for additional gold-bearing properties of merit in Guyana, for the purposes of acquiring more gold-bearing concessions. Mahdia Gold, with the assistance of its Guyanese counsel, Robert Corbin (Guyana leader of the parliamentary opposition and former Deputy Prime Minister), is talking to the Guyana government about other assets of significance for Mahdia. The company will make further announcements on any further acquisition of more gold-bearing concessions as they develop.

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