Foundation Resources Inc. Options 100% Interest in Massive Sulphide Mitchell Property, Ontario
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/26/11 -- Foundation Resources Inc. (TSX VENTURE: FDN) ('Foundation') is pleased to announce that it has entered into a purchase option agreement (the 'Agreement') with Perry English, on behalf of Rubicon Minerals Corporation (the 'Optionor') whereby the Optionor has granted Foundation the right to acquire a 100% interest in five mineral claims (736 hectares) called the Mitchell Property (the 'Property') located in the Red Lake Mining District, Ontario.
Under the terms of the Agreement, Foundation can acquire a 100% interest in the Property by making aggregate cash payments of $89,000 and issuing an aggregate of 150,000 common shares over a four year period to the Optionor. The Optionor retains a 2% net smelter return royalty on the Property subject to Foundation's right to purchase 1% for $1,000,000 at any time.
The Agreement is subject to Foundation obtaining approval from the TSX Venture Exchange.
About the Mitchell Property
The 736-hectare Mitchell Property is located approximately 10 kilometres southwest of the former South Bay Mine (1.6 mt mined @2.5% copper, 14% zinc and 3.5 ounce per ton silver), which is approximately 80 kilometres east of the town of Red Lake in northwestern Ontario. Access to the property is via the South Bay Road extending east off the Highway 105. An electrical grid lies just south of the Property.
The Property occurs within the southern Birch-Uchi Greenstone Belt (BUGB) in the Uchi Subprovince of the Superior Province of the Canadian Shield and contains felsic volcanic units similar to those found at the South Bay Mine. BP Selco ('Selco') drilled eleven short holes, totaling 1270 metres, testing airborne geophysical targets (magnetic and electromagnetic) in the western part of the Property during the late 1960s to early 1970s. As a result of this drilling, Selco delineated volcanogenic massive sulphide or VMS-type exhalite horizons. Drill holes intersected up to 5.5 m wide semi-massive to massive and 23.0 m wide stringer sulphide mineralization consisting of pyrite-pyrrhotite-chalcopyrite-sphalerite mineral assemblage.
In the mid-1990s, Noranda Mining and Exploration Company carried out geophysical and litho-geochemical surveys and geological mapping on the property and reported two areas of VMS-style mineralization. The Jigg Occurrence, which is coincident with a prominent 'bulls-eye' airborne electromagnetic anomaly and which was also drilled by previous operator Selco, occurs on 'Grid A' near the western property boundary. The drilling by Selco was shallow and mineralization remains untested along strike, down plunge and at depth below 100-metre vertical. A surface pulse electromagnetic (PEM) survey was conducted along two conductive trends identified by litho-geochemistry to test for deeper strike extensions as potential drill targets.
The second area of mineralization occurs 3.0 kilometres to the east on 'Grid B' and has been intersected in only one drill hole, where 5.0 m of stringer and massive pyrite-pyrrhotite-chalcopyrite-sphalerite mineralization occurs at the felsic-mafic metavolcanic contact. The Grid B area, which is characterized by three north-striking, 250 to 2000 metre long electromagnetic anomalies (PEM) were only partially drill-tested and warrant thorough drill-testing. In addition to potential geophysical and litho-geochemical targets within the A and B grid areas, there are numerous other base metal sulphide occurrences on the Property that will also be re-evaluated by appropriate geological and geophysical methods. The litho-geochemical sampling carried out by Noranda indicates silica, iron, magnesium enrichment and sodium and calcium depletion, characteristic of a typical VMS-style alteration environment that bodes well for the Property to host potentially economic base and precious metal mineralization.
Several gold-bearing quartz veins hosted within northeast-trending, pyritic shear zones have also been reported to occur within south-central part of the Property. Of these, the two most significant veins (No. 1 and No. 2) located somewhere along the north and south shores of the Southwest Bay were discovered in 1927 by Scranton-Ontario Consolidated Mines Ltd. The company reported 0.725 ounce (or 20.55 grams) per ton gold from No. 1 vein and 3.53 ounce (or 100.07 grams) per ton gold from No. 2 vein (Parker and Atkinson 1992, Open File Report 5835). The exact locations of these two veins are currently uncertain and will be investigated in the upcoming field season.
An exploration work program consisting of geologic mapping/prospecting, litho-geochemical sampling in selected areas, and drilling of some untested historic geophysical targets for massive sulphide mineralization are being considered in 2011. Locating high-grade gold veins would also be a top priority for Foundation in the upcoming field season.
The geology and assay results quoted above are from various historical reports, both published and unpublished, and have not been verified by Foundation.
Ike Osmani, M.Sc., P.Geo., the President and Director of Foundation Resources, is the Qualified Person (QP) as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects and is responsible for the preparation of all technical information contained in this news release.
About Foundation Resources Inc.
Foundation is a mineral exploration company focused on exploration and development of gold and base metal properties in Canada and Mexico. Its flagship Coldstream gold project in the Shebandowan greenstone belt and Mitchell base metal property in the Birch-Uchi greenstone belt east of Red Lake, occur within the Western Superior geological province of the Canadian Shield, noted for hosting prolific gold and base metal deposits in Ontario, Canada. The San Rafael gold-silver property is located approximately 150 km northwest of Durango in the Durango State, Mexico.
On behalf of the board,
Ike Osmani, President & Director
News release contains certain 'Forward-Looking Statements' within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Foundation Resources Inc.
Paul Chung, MBA
CEO & Director
604-681-0405
604-687-4670 (FAX)
info@foundationres.com
Foundation Resources Inc.
Ike Osmani, M. Sc, P. Geo
President & Director
604-681-0405
604-687-4670 (FAX)
info@foundationres.com
www.foundationres.com
Rain Communications
Nelson Da Silva
604-648-0523 (direct)
Rain Communications
Ralph Biggar
604-306-2525 (direct)