Linear Metals Signs Option Agreement to Acquire Large Gold and Base Metal Property Package in Western Kenya
HALIFAX, NOVA SCOTIA -- (Marketwire) -- 02/09/11 -- Linear Metals Corporation (TSX: LRM) is pleased to announce the completion of an agreement with East African Pure Gold Limited ('EAPG') and B&M Mining Company Limited ('B&M'), both privately-held companies, to earn an initial 80% interest in three mineral exploration concessions located in the country of Kenya. The exploration concessions, SPL 214, SPL 231 and SPL 258, cover numerous gold and base metal targets hosted in the Migori greenstone belt of south-western Kenya (Nyanza Region).
During 2003-2004, B&M completed seven shallow drill holes over an area of approximately 900 metres ('m') x 400 m on the Kamwango artisanal workings located on Concession SPL 214. Highlights from the limited drill program included:
-- DDH-1: 2.96 metres @ 34.5 grams per tonne of gold
(hole lost in mineralized quartz vein)
-- DDH-4: 2.55 metres @ 81.4 grams per tonne of gold
(hole collared in mineralized quartz vein)
The Migori greenstone belt is part of, and forms a northward continuation of, the Archean Nyanzian Greenstone Belt that extends from neighbouring Tanzania where it is host to several gold mines, notably Barrick Gold's North Mara deposit, which contains over 3.5 million ounces of gold, and AngloGold's Geita deposit which contains over 5 million ounces of gold. Other than the drill program noted above, little modern exploration has been conducted on the concessions beyond initial reconnaissance rock and soil sampling.
Brian MacEachen, President and CEO of Linear Metals, commented, 'We look forward to commencing our exploration program on these prospective properties. We appreciate the support demonstrated by the Kenyan government as well as local residents and leaders who will share in the success of these properties going forward. The late Joe Krygoski, founder of EAPG and B&M, demonstrated great foresight in assembling this property portfolio and we are fortunate to have this opportunity to work with his surviving family members and business partners to realize Mr. Krygoski's vision for potential mine development in this region of Kenya.'
Under the terms of the Agreements with EAPG and B&M, Linear can earn an 80% interest in the concessions by incurring exploration expenditures of US$4.0 million and making cash payments to EAPG and B&M totalling US$300,000. Several applications submitted by EAPG and B&M for additional concessions are also subject to the agreed area of interest and Linear's earn-in agreement.
SPL 214
The SPL 214 concesion covers an area of approximately 15 square kilometres ('km2'). The seven drill holes completed by B&M in 2003-2004 extended to shallow depths ranging from 28 to 73 m. Five of the seven drill holes returned significant gold mineralization, highlighted by holes DDH-1 and DDH-4 as listed above.
Holes DDH-1 and DDH-4 are located approximately 400 m apart along the same NW-trending structure. As the holes were collared on small, poorly-exposed artisanal workings, neither hole successfully intersected the full width of the system, although well-developed silica-chlorite-sericite alteration of the metabasalts extends for over 5 m from the contact with the high-grade quartz veins (locally called 'quartz reefs'). Gold in the quartz veins occurs as free grains and associated with sulphides.
DDH-3 (located 100 m N of DDH-4) appears to have tested a NE-trending splay from the main NW structure, intersecting moderate gold values of 1.4 grams per tonne ('g/t') Au over 20 m (including 2.13 g/t Au over 5.5 m), while DDH-7 (located 200 m SW of DDH-1) appears to have tested a parallel structure to the main NW-structure, intersecting 2.8 g/t Au over 7.6 m (including 3.95 g/t Au over 5.3 m).
DDH-6, located approximately 600 m N of DDH-4 but slightly off the main NW-structure, intersected 0.4 g/t Au over 11.7 m. DDH-2 and DDH-5 are located off the main structures and did not return any significant assay results.
These drill holes represent a preliminary test of a 15 km2 area that hosts over 12 known artisanal gold workings, scattered over NW and NE trending structural corridors, over an approximate four km NW strike length, and approximate two km NE strike length. The Company plans to initiate IP and magnetic surveys later this month in order to better delineate the mineralized trends within this large gold-bearing system. This will be followed by a drill program to test the extensions of the known high-grade gold intercepts from the B&M drilling and surface sampling, which has returned grab and chip samples from other artisanal workings (i.e. remote from any drill holes) of up to 96.6 g/t Au, of similar tenor to the drill results.
SPL 231 & SPL 258
SPL 231 and SPL 258 cover areas of approximately 84 km2 and 358 km2 respectively. Compilation of data from SPL 231 and SPL 258 is ongoing, but initially, on SPL 258, EAPG have outlined a 6 km x 1 km long corridor (open) of gold-in-soil anomalies (up to 1,150 ppb Au), culminating in a 1.4 km x 0.7 km area of anomalous gold-in-soils (up to 2,530 ppb Au, open) and artisanal workings that have returned chips and grabs of up to 37.8 g/t Au.
On SPL 231, several artisanal gold and sulphide occurrences have been documented. The sulphide occurrences may be similar to proven volcanogenic massive sulphide deposits in the belt, such as the historic Macalder Cu-Au Mine, located approximately 20 km to the south.
Further details of the gold and base metal targets on these two licenses will be released as the compilations are finalized and targets are further field-checked.
About Kenya
Kenya is the commercial and logistical hub of East Africa. It has the largest economy in the East Africa region and the fourth largest economy in Sub-Saharan Africa. The country is home to a broad range of international firms who use Kenya and its well-established infrastructure as a regional base.
The Kenyan Government is focussed on achieving a stable environment to attract economic investment, underpinned by Vision 2030, Kenya's development blueprint to the year 2030. The adoption of this new policy by Kenya comes after the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation, which has seen the country's economy back on the path to rapid growth since 2002.
Kenya's mineral exploration history and activity has lagged significantly behind its neighbours, such as Tanzania and Uganda, with whom it shares a number of known mineral belts. As a result, Kenya is considered to have significant growth potential for mineral exploration and mining. In step with this, the Kenyan government has recently updated its mining laws, which they hope will attract further investment in this sector.
The country is also known in the East Africa region for its large pool of trained and well-educated professionals, fluent in English. The combination of a stable political environment, growing economy, established infrastructure, exploration potential, a skilled labour force, and updated mining laws all combine to make Kenya an attractive destination for mining investment.
In the Nyanza Region, besides B&M and EAPG (and now Linear Metals), several exploration and mining companies are currently active, including Red Rock Resources, Aviva Mining, and Goldplat.
This press release was prepared under the supervision of Matthew Ian Rees, P.Geo., VP Exploration for Linear Metals, who is a Qualified Person as defined under National Instrument 43-101. Mr. Rees has reviewed the scientific and technical information in this press release. The drill holes referred to in this release were drilled under the supervision of B&M. The drill core was logged by B&M and samples were sent to ALS Chemex where samples were prepared in Tanzania and analyzed in Australia.
Forward-Looking Information:
This release includes certain statements that may be deemed 'forward-looking statements'. All statements in this release, other than statements of historical facts, that address future production, reserve potential, continuity of mineralization, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes that the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. The likelihood of future mining in Kenya is subject to a large number of risks and will require achievement of a number of technical, economic and legal objectives, including obtaining necessary mining and construction permits, completion of pre-feasibility and final feasibility studies, preparation of all necessary engineering for pits and processing facilities as well as receipt of significant additional financing to fund these objectives, as well as funding mine construction. Such funding may not be available to the Company on acceptable terms or on any terms at all. There is no known ore on the Company's concessions in Kenya and there is no assurance that the mineralization on the Company's Kenyan concessions will ever be classified as ore. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at www.sedar.com.
The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Contacts:
Linear Metals Corporation
Brian MacEachen
President and Chief Executive Officer
(902) 482-1240
www.linearmetals.com