Press Release March 17th
posted on Mar 25, 2008 06:51PM
Active in the Pursuit of Gold & Silver
for immediate release: Toronto, Canada, March 17, 2008 - RX Exploration Inc. (“the Company”) is pleased to announce that it has entered into two option agreements to acquire an undivided 50% working interest in the past producing Sill Lake silver-lead project in the Township of Van Koughnet, near Sault Ste. Marie, Ontario.
In 1996, prior to the closure of the mine, the workings were visited by James Bates, P.Eng. While it is not possible to present mineral resources and mineral reserves in compliance with National Instrument 43-101 (Standards of Disclosure for Mineral Projects), his preliminary review at that time, based on sampling of the floor of the 800 foot ramp driven in ore, reported a “resource of 350,000 tons with an average grade of 13-14% lead and 13 oz/ton silver over a 4 foot mining width.” The technical information contained in this release with respect to the Sill Lake silver-lead project has been provided by John A. Rae, P. Geo., who is a qualified person within the meaning of National Instrument 43-101. Mr. Rae has had recent discussions with Mr. Bates concerning his resource estimates. Based on those discussions, they are considered to be currently relevant, valid and reliable.
The Company plans to commence an IP geophysical survey in April-May 2008 followed by a diamond drilling program in May-June 2008 to confirm the validity of historic data regarding grades and tonnage of potential resources. Exploration efforts will focus on testing the remaining resources accessible by the existing mine workings and potential extensions to the resource along strike and at depth.
John F. O’Donnell, Chairman of the Board, stated that he is particularly pleased with the new acquisition because the Company will now have advanced projects in both the United States and Canada, making it a truly international company.Previous Exploration –
In 1972 a high-grade silver-lead quartz vein was discovered by Tribag Mining Company Limited during a regional exploration program. Seven diamond drill holes (427 meters in total) were drilled to outline the vein.
The project was then leased to Prace Mining which carried out ground geophysics and 1,091 meters of diamond drilling from 1973 to 1982. Trenching and bulk sampling was also completed along with 120 meters of underground development with a decline reaching 30.5 meters. A small mill was constructed and ore stockpiled from the underground workings was processed. It is reported that the concentrate graded 80% lead and 100 ounces of silver per ton.
In 1982 the property was acquired by Sill Lake Silver Mines Limited which in turn entered into an agreement with Royal Gold and Silver Corporation to process ore and tailings at the site but this agreement was terminated in 1984 due to low silver prices. Sill Lake Silver Mines Limited took over the mine and completed additional underground development and small scale mining before low silver prices shut the operation down.
Silver and lead vein mineralization at the Sill Lake Mine is along the contact of a steeply dipping gabbro-norite dike and wackes of the Gowganda Formation. The deposit consists of one major vein with a few sub-parallel veins.
“The argentiferous galena vein which varies from 1 to 3 feet in width has ore grades of 40 ounces silver per ton and 10-30% lead. The sulphide minerals present are galena, tetrahedrite, pyrite, chalcopyrite, sphalerite and pyrrhotite” ((Robinson 1977) OGS Open File Report 5602-Geology of the Havilland-Goulais Bay Area, 1987)Property Agreements –
Under one agreement, in order to earn a 50% undivided working interest, the Company must pay the sum of $25,000 and 100,000 common shares of the Company on closing and annual advance royalty payments of $12,000 thereafter. The Company must incur $1,500,000 in expenditures on mining operations within two years, of which $500,000 must be completed within six months. The Company must pay a further 60,000 common shares of the Company on each of the first anniversary of closing and the date of exercise of the option. The property is subject to a 2% net smelter return (2% NSR) royalty, one-half of which can be repurchased for $600,000. After the Company earns its interest, both parties will contribute equally to further development. There will be a standard dilution clause if either party fails to pay its proportionate share of further expenditures. If the Company is diluted to less than 10%, its interest will be converted to a 1% NSR. The common shares are subject to a four month hold period.
Under the second agreement, in order to earn a 50% undivided working interest, the Company must incur $1,000,000 in expenditures on mining operations within two years. After the Company earns its interest, both parties will contribute equally to further development. There will be a standard dilution clause if either party fails to pay its proportionate share of further expenditures. If either party is diluted to less than 10%, its interest will be converted to a 1% NSR.Montana Update –
In other news, the Company is pleased to confirm that it has commenced its 20,000 foot underground diamond drill program at the Drumlummon Mine at Marysville, Montana, as anticipated in the Company’s news release dated March 4, 2008. The Drumlummon Mine is one of the larger former producers of gold and silver in the Western United States. It is of the “bonanza”- type epithermal deposits which are very young and low temperature in origin and which can produce high grades over large widths.
Murray R. Nye, the President of the Company, stated that he expects there to be a steady release of information as the drilling progresses.
For further information please contact: John F. O’Donnell, Chairman of the Board, at (416) 862-7330 or Murray R. Nye, President, at (204) 989-2434.
RX Exploration Inc. (CUSIP # 78347W107) is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNQ (Symbol: RXEX). There are currently 32,586,508 common shares issued and outstanding.CNQ has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Forward Looking Statements: Statements made in this news release that relate to future plans, expectations, events or performances are forward looking statements. Such statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking