Eagle Plains Completes 100% Acquisition of Yellowjacket Gold Project
Cranbrook, B.C., August 19th, 2010: Eagle Plains Resources Ltd (TSX-V:EPL) has completed the purchase of Prize Mining Corp's (TSX-V:PRZ) remaining interest in the Yellowjacket Joint- Venture (“YJV”) with an effective date of August 18th. Eagle Plains now holds a 100% interest in the project, subject to a 1.5% NSR. The YJV has now been dissolved and Eagle Plains is the sole owner and operator of the project. A 2,000m drilling program is planned for the property and is expected to commence in early September.
About the Yellowjacket Gold Project
The Yellowjacket Project is located 9 km east of Atlin, BC and is accessed by all-season road. Hydro-electric power is located within 5km of property boundaries. The project received a B.C. Mines Act permit in July, 2009 for an open pit gold mine and onsite concentrator processing up to 75,000 tons per year of ore (EPL/PRZ news release July 13th, 2009). The Permit contemplates a 7 – 9 year mine life from a series of open pits entirely within an area of disturbed placer workings. The gold is recovered using a simple gravity concentrating recovery plant without the use of chemicals or additives. In October 2009, Eagle Plains and Prize announced the formal ratification of an Impact and Benefits Agreement with the Taku River Tlingit First Nation.
The property is known to host significant gold mineralization. Gold is erratically distributed throughout the Yellowjacket structural zone such that accurate exploration and economic assesment of the property is hampered by a pronounced "nugget effect".
In 1983, local area prospectors staked the area of the Yellowjacket Property and then optioned portions of the property to Canova Resources and Tri-Pacific Resources. During 1984 and 1985 these companies conducted programs of ground geophysics, rotary, and diamond drilling. In 1986 Homestake Mineral Development Company optioned the property from Canova and initiated programs of mapping, reverse circulation drilling and diamond drilling.
In 1988, Homestake completed a ground geophysical program which consisted of 5.5 kilometres of magnetic and VLF-EM surveys. By 1988, Homestake Mining Company outlined the Yellowjacket Zone, a mineralized area containing significant gold intercepts over 2 kilometres by drilling 58 diamond drill holes to depths up to 183m of which gold was intercepted to 140m depth.
As a result of this work, Homestake estimated an historical resource estimate of 453,500 tonnes grading 10.26 grams per tonne gold (BC Dept Mines Open File 2000-2 page 41). (These are historical figures and do not currently comply with NI 43-101, though they are considered by management to be relevant and form a basis for future exploration of the Property)
Muskox Minerals Corp. (renamed Prize Mining Corporation) optioned the property in late 2003 and began exploration in December of that same year to further outline the extent, nature, grade and geometry of gold mineralization at the Yellowjacket Zone. 41 holes were drilled in 2003-2004, thirteen of which encountered coarse gold that yielded assay intercepts similar to those obtained by Homestake. Muskox reported significant gold intersections (among others) of up to:*
- 80.3 grams per tonne over 38.94 meters including 513.5 grams per tonne over 5.56 metres in drill hole YJ03-01
- 80.5 grams per tonne over 30.83 meters including 2397 grams per tonne over 0.91 meters in drill hole TW05-02, a twin hole to YJ03-10
- 40.10 grams per tonne over 6.10 metres in drill hole YJ04-07
- 142.40 grams per tonne over 1.0 metres in drill hole YJ04-20
- 156.95 grams per tonne over 0.5 metres in drill hole YJ04-22
(*press releases, November 15, 2004 and February 03, 2005)
In 2004, Canamera Geoscience Corp. under contract to Muskox conducted an airborne geophysical survey over the Property. A total of 820 line kilometres of airborne survey were flown by helicopter, using 50 metre spaced flight lines.
In 2005, Muskox/Prize performed a 50km magnetic survey which delineated three zones: Yellowjacket, Rock of Ages and Gold Run. Six holes were drilled in the Yellowjacket Zone and 1.5 kilometres to the southwest, three holes were drilled in the Rock of Ages Zone, for a total of 895 metres.
In 2006, Muskox/Prize commenced an exploration bulk sampling program, which included diversion of Pine Creek, overburden/placer tailings excavation, construction of a 400 ton-per-day milling facility, bedrock mapping and channel sampling, bedrock excavation and processing. In 2007, Prize reported production of 6.43 kilograms (206.9 ounces) of gold produced from sluicing the placer-bedrock interface material excavated during bulk sample excavation. In 2008, Prize processed 4200 tonnes of material. Of this material, 2880 tonnes were considered to be taken from the main mineralized zone and returned gold bars totaling 18.63 kilograms (599 ounces). About 800 kilograms of low grade gold concentrates from 2008 remain and are estimated to contain approximately 1.5 kilograms (50 ounces) of gold. These gold volumes back-calculate, using a formula that allows for smelting and processing plant recoveries, to a head grade of approximately 9 g/t gold.
In 2009, Eagle Plains and Prize contracted Barry Price, P.Geo. and Linda Dandy, P.Geo. to complete a 43-101 compliant technical report which summarize development of the property to date. The report identifies that “Based on the results of the exploration and development conducted to date on the Property, the authors conclude that the Yellowjacket Gold Zone represents a legitimate development target with the potential to host an economically feasible mineral deposit. Such potential is not quantifiable and can only be verified by additional exploration and development work.”
C.C. (Chuck) Downie, P.Geo, VP Exploration, Eagle Plains Resources and Project Manager for the Yellowjacket Venture states:
"Going forward we need to focus on better definition of the Yellowjacket ore zone in terms of near surface grade and tonnage through detailed chip sampling and shallow drilling. Expansion of the east pit indicates that the mineralized zone extends into areas that have not been tested by any diamond drilling and a better understanding of the distribution of the nugget gold should result in more efficient grade control. Our goal is to mine and process the near surface ore grade material, while continuing to explore and expand the overall gold resource. We will also be looking for potential partners to provide technical expertise and financing as the project moves forward.”
Under the terms of the original JVA, Eagle Plains earned an initial 40% interest in the Project from Prize by making a $2,000,000 cash payment. Since commencing activities, Eagle Plains has advanced the JV an additional amount of approximately $2,600,000. Prize Mining subsequently agreed to accept dilution of its interest in the project in accordance with a formula established in the YJV agreement. Prior to the purchase of the remaining Prize interest and dissolution of the YJV, Eagle Plains held a 59.62% interest. The total consideration for the purchase of Prize’s remaining 40.38% interest was $400,000 plus 2,000,000 Eagle Plains common shares. These shares are subject to escrow restrictions over a two year period.
About Eagle Plains Resources
Eagle Plains continues to conduct research, acquire and explore metal projects throughout western Canada. In addition to holding mining royalties on various projects, Eagle Plains controls over 35 gold, base-metal and uranium projects, several with third parties including Excelsior Mining Corp (TSX:MIN.P), Sandstorm Resources Ltd. (TSX-V:SSL), Sandstorm Metals and Energy Ltd. (TSX-V:SND), Providence Capital Corp., Waterloo Resources Ltd. (TSX-V:WAT.P), Prize Mining Corp. (TSX-V:PRZ), Windstorm Resources Inc., Heemskirk Canada Ltd., Touchdown Capital Inc. (TSX-V: TDW) and 99 Capital Corp. (TSX-V:WDG). In recent years, Eagle Plains has completed option agreements with Teck Limited (TSX:TCK.B), Alexco Resource Corp. (TSX-V:AXR), Billiton Metals, Rio Algom Exploration, NovaGold Resources, Kennecott Exploration and numerous other junior exploration companies, resulting in over 53,600m (163,370’) of drilling and over $28.3 million in exploration spending on its projects since 1998.
Expenditures during 2008 and 2009 on Eagle Plains’ projects were approximately $7,300,000, funded by Eagle Plains and third party partners. This work resulted in approximately 6,900m of drilling and extensive ground-based exploration work and facilitated the advancement of numerous projects at various stages of development.
Technical aspects of this news release have been reviewed and approved by C.C. Downie, P.Geo., hereby designated as a qualified person under National Instrument 43-101.
On behalf of the Board of Directors
“Tim J. Termuende”
President and CEO
Cautionary Note Regarding 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. 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, receipt of property titles, 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 statements.