posted on Jul 07, 2009 10:13AM
A Canadian company focused on the acquisition, exploration and development of quality mineral properties world wide.
Solomon Acquires Option on Cry Lake (Nizi Creek) Epithermal Gold Property
Exploration Program and $650,000 Financing Proposed
July 7th, 2009 Trading Symbol: TSX-V.SRB
Armstrong, B.C. - Tuesday, July 7th, 2009. Solomon Resources Limited (SRB: TSX-V) reports that it has entered into an agreement to buy Avasca Inc., a private British Columbia corporation, for $154,000. Avasca holds (and sole asset is) an option to acquire a 51% interest in the Cry Lake (formerly ‘Nizi Creek’) Property in the Liard Mining Division, British Columbia from Kaminak Gold Corporation of Vancouver, British Columbia. The property is subject to a 2% underlying net smelter return royalty in favour of a third party.
The option is exercisable by Solomon issuing 400,000 units to Kaminak in four tranches of 100,000 each over a period of three years and carrying out exploration of $2,000,000 (of which the first $50,000 is a firm commitment) by December 31, 2011. Each unit shall consist of one common share of Solomon and one share purchase warrant to purchase a further common share for one year at the market price of Solomon’s shares at the time of the Exchange approval or, for the second, third and fourth tranches, at the market price of the time of issuance if that price is higher than the market price at the time of Exchange approval. Upon exercise of the option, Solomon and Kaminak will form a joint venture with Solomon as operator. If Kaminak’s interest is reduced to 5%, it will be converted to a 1% net smelter return royalty and, if Solomon’s interest is reduced to 5%, it will be converted to a 2% net smelter return royalty.
To finance its obligations under the option, Solomon proposes to raise up to $650,000 through a private placement of up to 2,600,000 units at $0.25 per unit. Each unit will consist of one common share and one-half of one transferable share purchase warrant. Each whole warrant will be exercisable to purchase a further common share for $0.50 for one year. Finder’s fees may be paid to eligible finders on funds raised from third parties introduced by the finders. One or more of the vendors of Avasca have agreed to subscribe for at least $154,000 of the financing.
Closing of the purchase and placement are subject to completion of satisfactory due diligence investigations and receipt of all regulatory, corporate and third party approvals.
Geological Setting and Mineralization of the Cry Lake Property:
The Cry Lake Property is located 80 kilometers northeast of Dease Lake, British Columbia. The property lies within the Sylvester Allochthon, a set of thrust-bounded terranes which host gold-bearing epithermal type veins associated with felsic volcanic rocks.
Gold mineralization on the Cry Lake Property is associated with shears, faults and fractures within the poorly understood and highly metamorphosed Rapid River tectonite. The seven mineralized zones identified to date extending over a northwesterly-elongated area two kilometers long and one kilometer wide, are the Zinc Lake Zone, Discovery Vein / Surprise Vein, Grizzly Ridge Vein, H Zone, Gully A Zone and B Zone. A new mineralized zone known as the Hill Zone was identified by British Columbia Geological Survey Branch in 1997.
CRY LAKE GOLD PROPERTY
Figure 1: Location Map: Cry Lake Epithermal Gold Property (After Taylor, GAC SP No. 5)
Two distinct styles of mineralization have developed within an intermediate to felsic volcanic sequence in a structural regime of strike-slip and related faulting: sulphide-poor gold-silver-quartz veins and stockworks associated with pervasive silicification and sulphide-rich iron carbonate-sphalerite-galena veins associated with pervasive carbonate alteration.
The gold and silver-bearing quartz veins and stockworks consist of microcrystalline to very fine-grained white to grey quartz and carbon, commonly with white subhedral to euhedral barite, finely disseminated pyrite and minor iron carbonate. Gold and silver occur as electrum, which forms tiny grains intergrown with the sulphides and sulphosalts, or included within them. Significant gold mineralization is consistently associated with discrete zones of quartz-carbon-pyrite-barite-carbonate silicification rather than pervasive quartz flooding.
Channel samples of the Discovery Vein by earlier operators returned the following selected high-grade values: 27.09 grams per tonne (g/t) gold and 1220.6 g/t silver over 2.0 meters; 15.09 g/t gold and 1073.2 g/t silver over 3.5 meters and 8.91 g/t gold and 596.6 g/t silver over 1.0 meter (British Columbia Geological Branch Assessment Report 22840). Limited shallow drilling by earlier operators, including Madrona Mining Limited in the mid 1990’s, confirmed the surface assays but to date no deeper drilling has been conducted. A program of geological and structural mapping and petrographic studies conducted in 2007 by Romios Gold Resources Inc. suggested that the known stockwork mineralization may represent the upper portion of a larger vein system at depth, and a series of diamond drill targets was proposed but never tested.
The Discovery Vein represents the best exploration target to date identified on the Cry Lake Property, with assay values up to 41.0 g/t gold although more typical channel samples returned 1.5 to 30.0 g/t gold and 190 to 1200 g/t silver over widths of 1.0 to 2.0 meters.
The geological setting in which the Cry Lake Property is located is highly correlative with that of the Yukon-Tanana Terrane and recent work by the British Columbia Geological Survey suggests that potential exists for further epithermal and intrusion related gold discoveries in adjacent portions of the Cry Lake Map Sheet.
Solomon’s initial field program on the Cry Lake Property will be to complete the geological and structural mapping initiated in 2007 and undertake preliminary diamond drilling to test the Discovery Vein at depth.
Further surface exploration will be conducted along strike extensions of the known mineralization of the Cry Lake Property to identify prospective targets for epithermal and intrusion-related gold-silver polymetallic veins and to investigate the potential for syngenetic massive sulphide occurrences associated with pyrite-garnet-bearing exhalative metachert horizons.
Solomon’s President Randy Rogers observed: “The Cry Lake Property is an excellent addition to our exploration portfolio. We are focussing our efforts in the near term on gold projects in Western Canada and recent advances in the understanding of the geological and tectonic setting of this area combined with the gold mineralization discovered to date on the Cry Lake Property make this a very attractive project.”
CRY LAKE PROJECT AREA
Figure 2: Cry Lake Project Area (After Nelson, BCGS Paper 2002-1)
Randy Rogers, M.Sc., P.Geol. a “Qualified Person” for the purposes of National Instrument 43-101, Standards for Disclosure for Mineral Projects of the Canadian Securities Administrators, and the President and Chief Operating Officer of Solomon, has reviewed the data disclosed herein from historical records of previous owners and operators of the Property. While the historical data is believed to be accurate, Solomon’s exploration program will be designed to test the accuracy of the historical information.
Forward Looking Statements:
Some of the statements in this news release may contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Solomon. Actual results may differ materially from those currently anticipated in such statements.
About Solomon Resources Ltd.:
Solomon Resources Ltd. is a Canadian public company focused on the acquisition, exploration and development of quality mineral properties worldwide. Solomon is managed by a proven team of exploration geologists involved with the discovery and/or development of a number of significant deposits in the world, including the Snip, Eskay Creek, and Brewery Creek deposits in Canada; the Segala gold deposit in Mali; the Chimney Creek, Mule Canyon, Ruby Hill, Mesquite, and Ortiz gold deposits in the United States, the Gosowong deposit in Indonesia and the Cadia East deposit in Australia.
Solomon is currently focused on the exploration of gold projects in British Columbia, a tin project in Alaska and uranium projects in Mongolia. Solomon’s shares trade under the banner SRB on the TSX Venture Exchange (TSX-V).
For additional information visit Solomon’s website at www.solomonresources.ca or contact:
Randall S. Rogers, President and Chief Executive Officer
Email: [email protected]
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accept responsibility for the adequacy or accuracy of this release.