VANCOUVER, British Columbia, April 30, 2012 /PRNewswire/ -- Lori McClenahan, President, Intigold Mines Ltd. and St. Elias Mines Ltd. (TSX VENTURE: SLI) (PINKSHEETS: SELSF) (US Clearing Symbol: SELSF) (FRANKFURT: EKL) (collectively the "Companies"), announces today the following update and overview with respect to the Cueva Blanca Gold Property (the "Property") located in northwest Peru. The Property is owned 100% by St. Elias Mines Ltd. Intigold Mines Ltd. has an option to acquire a 60% interest in the Property.
The Companies have initiated field studies in the Cueva Blanca area in preparation for diamond drilling. At this time, it is anticipated that very little field work will be required prior to mobilizing drilling equipment and crews to the site. The initial drilling targets include the Cruz vein, the Cruz breccia bodies as well as the Bi-Hg quartz manto zone. The economic targets at the property are gold and silver.
The Companies have recently been approached by Compania de Minas Buenaventura to conduct a review of the property. The Companies are taking this into consideration.
Cueva Blanca Property Agreement
Intigold acquired an option to earn a 60% carried interest in the Property, subject to a 1.5% net smelter return royalty ("NSR"), from St. Elias in consideration of Intigold making cash payments of $200,000 to St. Elias over a two-year period, issuing 1,000,000 common shares in the capital of Intigold to St. Elias and incurring $1.5-million in exploration expenditures on the Property over a three-year period.
In addition, Intigold has the right to purchase one-half of the 1.5% NSR from St. Elias for the sum of $1,500,000, thereby reducing the NSR payable from 1.5% to 0.75%.
Cueva Blanca Property
The Property covers approximately 5,000 hectares (50km2), and is located in the Lambayeque department in northwestern Peru, within the Northern Peru Miocene metallogenic belt. This belt is defined by a large number of world-class gold and copper-gold deposits of similar age (5-25 million years). Giant gold deposits within this belt include Yanacocha, Lagunas Norte, and Pierina. Also of great importance are world-class Cu+/-Au porphyry deposits such as Rio Blanco, Canariaco, La Granja, Cerro Corona, Minas Conga-Galeno-Michiqillay, Magistral, and Antamina. The giant gold deposits and the Cu-Au porphyries often occur in clusters (e.g. Yanacocha-Conga-Galeno-Michiqillay). Discrete vein and breccia-hosted deposits of gold and polymetallic mineralization occur adjacent to some Cu porphyry deposits.
The Cueva Blanca property is bordered to the south and southeast by mineral concessions of Vale S.A. Barrick Gold holds extensive mineral concessions four kilometres to the north.
The Property lies within the northern member of a pair of profound east-west tectonic warps that cross northern Peru. These flexures are marked by an abrupt change in the direction of the regional geological trend from northwest to east-west. Within the southernmost of these tectonic features is the multi-million ounce Yanacocha gold mine and numerous Cu-Au porphyry deposits. Both the northern and southern structures are on the order of 60-80 km wide; they extend right across the Andes from the Pacific Ocean to the Amazon River Basin.
The locations of the giant Yanacocha gold mine and other gold deposits and Cu-Au porphyries of the Cajamarca district may be controlled or at least influenced by east to north-east structures within the large-scale southern tectonic flexure. The Cueva Blanca property, as well as the Canariaco and Rio Blanco Cu-Au porphyries and gold prospects such as Las Huaquillas (Inca One) and Rio Tabaconas (Golden Alliance, GLL), appear to be with the northern tectonic flexure.
An important feature of the Cueva Blanca property is the Cruz gold/silver epithermal vein system. Some examples of exceptional classic epithermal deposits with geologic characteristics similar to the Cruz vein system are Kupol (Russia), El Penon (Chile), and Tayoltita, Guanajuato, and Pachuca (Mexico).
Cueva Blanca exploration history has followed the classic pattern: acquisition based on geologic reasoning; property-wide prospecting and subsequent discovery of precious metal showings; detailed surface exploration of mineralized zones; and initial diamond drilling. The historical results provide an indication of the potential of the Property and are relevant to continuing exploration.
The previously announced confirmation exploration work, conducted in 2011, consisting of sampling of outcrops and trenches at the Cruz Vein portion of the Property. Assay results indicate a weighted average grade of 2.84 g/t gold across an average width of 4.3 meters and along a strike length of 850 meters in the Cruz Vein system.
Historical exploration work on the Cruz vein system, which included 91 trenches and 18 drill holes totalling 1,860 metres, proved that the quartz veins consistently contain gold and silver and that the Cruz vein system is a classic epithermal gold-silver deposit. Historical results of gold assays from the Cruz vein drill program include 6.0 metres of 2.31 grams per tonne, 6.0 metres of 2.96 grams per tonne (including 1.75 metres of 7.45 grams per tonne), 1.5 metres of 22.68 grams per tonne, 9.5 metres of 8.09 grams per tonne (including 1.5 metres of 35.84 grams per tonne), 10.8 metres of 2.4 grams per tonne and 1.2 metres of 6.95 grams per tonne. The vein intersections contain virtually no sulphides. The vein system is open along strike to the southeast and northwest, and to depth. (Summary report, Sivertz, 1999.)
While the Companies have no reason to doubt the accuracy of the historical results, the existing data should not be relied upon until the Companies' own exploration work confirms that the data meet National Instrument 43-101 standards for disclosure. Historical results and the work that generated them predate the enactment of National Instrument 43-101 and accordingly may not meet the requirements of that policy.
The technical contents of this news release have been verified by George Sivertz, P.Geo., a Canadian geologist residing in Peru, who is a "qualified person" as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.
For additional information on St. Elias and its projects, please visit us at www.steliasmines.com for further information on IntiGold, please visit www.intigold.com or call 1-888-895-5522 (toll free US and Canada) or contact:
ST. ELIAS MINES LTD.
(signed "Lori McClenahan")
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this document.
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, potential mineral recovery processes, etc. 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 statement.
SOURCE St. Elias Mines Ltd.