FIRESTEEL OPTIONS THE REYNA DE ORO PROPERTY IN THE EL SAUZAL AREA, MEXICO
Firesteel Resources Inc. is pleased to announce that it has signed an agreement to option the Reyna de Oro property from Compaņia Minera La Metalica de Chihuahua (a private Mexican company) and Consolidated Magna Ventures Ltd. (a Canadian exploration company listed on the VSE). Firesteel can initially earn a 70% interest in the property by incurring total staged exploration expenditures of US$ 3 million and cash or share-equivalent payments of US$ $203,500 over four years. This option agreement is contingent upon Firesteel's satisfactory completion of a three month due diligence review.
Upon fulfilling the required commitments, a joint venture will be formed with Firesteel holding a 70% interest and Magna holding a 30% interest. Metalica retains a 2% NSR which can be purchased for US$2.5 million. Any J.V. partner that does not contribute to ongoing work programs will have its interest diluted on a straight-line basis. If this interest falls to 10%, an automatic conversion to a 1% Net Smelter Return will be triggered. The contributing company has the right to purchase this 1% NSR for US$ 1.25 million. Thus, the total NSR purchase amount is US$3.75 million.
The 1467 hectare, road accessible property is located in the southwest portion of Chihuahua State in the heart of the Sierra Madre gold-silver-copper belt. This district has experienced continuous mining activity since its discovery in 1632. Numerous mines and significant undeveloped epithermal gold/silver/copper deposits occur in this area.
The Reyna de Oro property adjoins Francisco Gold's El Sauzal holdings. El Sauzal hosts one of the largest gold resources in Mexico and has reported a "mineable resource" of 23.5 million tonnes at a grade of 2.98 grams per tonne of gold. An independent review states that numerous geological similarities exist between the Reyna de Oro prospect and El Sauzal.
The Reyna de Oro property hosts a significant epithermal gold-copper prospect that was formerly part of the Mexican Mineral Reserve. Previous work has delineated the main mineralized zone over a strike length of four hundred meters. Recent prospecting has identified gold mineralization up to one kilometre west and 400 meters east of the main zone. Five previous surface and underground sampling programs confirm the potential of the mineralized system. These are highlighted by:
The Alberta Stock Exchange has neither approved nor disapproved the information contain herein.
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