Great Plains Metals Corp. press release
Sienna Gold Inc. - Acquisition of Balance of Igor Property
TSXV - TSX Venture Exchange · Gold · Copper · Molybdenum · Rare Earth Elements · Uranium · Canada
CALGARY, March 9 /CNW/ - Sienna Gold Inc. (SGP.V TSX Venture Exchange) announces that it has acquired the remaining 40% interest in the Igor Property in an arms length transaction with Matrix Gold Mining Investments SA ("Matrix") of Peru. The Corporation issued 2,550,000 common shares from treasury at a deemed issue price of C$0.85, and paid US$300,000 in cash. In addition Matrix gives up its net smelter royalty (NSR) that had been originally reserved to it under the terms of the acquisition agreement. The prior agreement allowed the Company to purchase the remaining 40% interest for the payment of US$7,000,000 on or before June 30, 2007 and an additional US$2,000,000 to purchase the NSR. The Board of Directors is pleased that Matrix showed confidence in the Company by accepting a significant share position of the Company, in exchange for their remaining interest in the IGOR property. The Company wishes to up-date its shareholders with respect to the original National Instrument 43-101 report dated November 30, 2004 prepared and filed in respect to the Igor property. Since filing the NI 43-101 report the Company has identified eight mineralized areas on the concession, compared to the original three areas identified (Manto area, Tesoros 1 Zone and El Domo). These additional exploration targets were identified as a direct result of both reconnaissance and detailed geologic mapping and sampling of the numerous small workings located throughout the concession. Our understanding of the potential of the property has increased and our initial interpretation has been strengthened. The cost estimate for the first phase of exploration has increased approximately 10 percent from the original NI 43-101 exploration estimate for the following reasons;
drilling within the underground workings was more expensive than drilling from the surface saving approximately $90,000. However the length of drill holes was thereby increased from 1920 meters to 2580 meters (current drill program definition) incurring an offsetting cost of $42,000.
There were many more small underground workings than initially anticipated. Mapping and sampling these workings, while adding to the initial program cost, has allowed a much improved understanding of the geology of the project and drill holes have been more effectively located. This work which was not previously contemplated was added to the cost of the Phase 1 project.
The first part of the program has been drilled using a BQ sized core barrel at the driller's recommendation. While saving money in direct costs, this has reduced the productivity of the program and we recently decided to drill NQ sized core. This will increase the unit cost of the program.
The terrain at Mina Igor is very steep. The drill sites were selected so as to test specific targets and are often located in areas with difficult access. In order to minimize road building (and resultant environmental impact) hand carved access trails are being used during Phase 1 drilling.
The drilling program began during the rainy season and the inclement weather has slowed down the drill project.
The Chimu Formation quartzites are very hard and drill much slower than initially anticipated. This has slowed progress of the project.
It is estimated that the Igor project (not counting G&A costs) has cost $345,000 to-date. This includes geologists, workers, security, truck rentals, air photos, metallurgical testing, drilling and assaying. The estimated cost to complete Phase 1 is $185,000 which includes labour, drilling, assaying and land purchase preparations. Delays to the drilling program mentioned above, have resulted in our missing the January 1, 2006 start to the resource estimate. With the recent changes in the drill program we anticipate completing the drilling by the end of May 2006 with a preliminary resource calculation by the end of July 2006. Drilling continues on the Igor Property, and results will be announced when available. Core from holes 9A and 9B are in the process of being logged, split and sent for analysis at the accredited SGS Laboratories in Lima, Peru. A total of 700 meters (7 holes) have been drilled to-date and the results confirm the existence of a wide breccia zone with significant potential for both gold and silver. The Company has contracted an additional larger, all hydraulic machine to the site to accelerate this drilling phase. When the seasonal rains have finished, intensive mapping and sampling will be carried out on the newly discovered exploration targets with a view to starting the Phase 2 drill program in July 2006. Klohn Crippen Berger SA have been contracted to prepare the Environmental Impact Assessment required to obtain regulatory approval for this larger drill program. Detailed news releases outlining exploration program results have been previously issued by the Corporation on August 23, 2005, October 12, 2005, November 3, 2005, November 17, 2005, December 12, 2005 and February 14, 2005. These are available at www.sedar.com. This new release has been reviewed and approved by Murray Lytle, P. Eng., the Corporation's Qualified Person under NI 43-101.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
Statements in this press release regarding the Company's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
%SEDAR: 00008773E