Eagle Plains Announces Offer to Purchase Yellowjacket Project
Cranbrook, B.C., June 10th 2010: Eagle Plains Resources Ltd (TSX-V:EPL) announces the execution of a formal agreement whereby Eagle Plains has offered to purchase from Prize Mining Ltd. (TSX-V:PRZ) the remaining beneficial right, title and interest in the Yellowjacket Project, including mineral and placer rights, and all equipment and infrastructure currently in place on the Yellowjacket mine site by making a cash payment of four hundred thousand ($400,000) dollars Canadian and issuing two million (2,000,000) common shares of Eagle Plains Resources. The deal is subject to regulatory approval from the TSX Venture Exchange and must also be approved by Prize Mining shareholders at their Annual General Meeting on July 13, 2010. The project is currently operated through the Yellowjacket Joint-Venture (“YJV”), jointly owned by Eagle Plains and Prize Mining and operated by Eagle Plains.
As announced in the EPL/PRZ News Release dated February 01, 2010, the project has a current NI43-101 Technical report prepared by Barry Price, P,Geo. Based on the results of the exploration and development conducted to date on the Property, the report concludes that the Yellowjacket Gold Zone represents a legitimate development target with the potential to host an economically feasible mineral deposit. The report also states that additional zones on the Property are legitimate early stage exploration targets and recommends a tentative budget of $520,000 for the next stage of exploration. Currently the Yellowjacket Zone is open along strike in both directions and to depth. Upon formal approval of the purchase agreement by Prize Shareholders and the TSX-V, Eagle Plains intends to carry out an exploration program on the property in 2010, which will include drilling.
About the Yellowjacket Gold Project
The Yellowjacket Project is located 9 km east of Atlin, BC and is accessed by all-season road.
In 2007 - 2008, Prize reported production of over 800 ounces of gold from a bulk sample extracted from the Yellowjacket zone. 2007 production was reported to be 6.43 kilograms (206.9 ounces) of gold from sluicing the placer-bedrock interface material excavated during bulk sample extraction. In 2008, Prize processed 4200 tonnes of bedrock material in their onsite bulk sample mill. 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 remained and were 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.
Eagle Plains (as project operator) applied for and received a Small Mines Act Permit from the British Columbia Ministry of Energy, Mines and Petroleum Resources in July, 2009 for the development and production of gold at the Yellowjacket Zone (see EPL/PRZ news release July 13th, 2009). The Permit allows for the development and operation of an open pit gold mine and onsite concentrator processing up to 75,000 tons per year of ore. The local Taku River Tlingit First Nation (“TRTFN”) were active participants in the review and approval of the Permit. 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 Agreement recognizes that the Yellowjacket Project is located within the TRTFN Territory; and the YJV holds certain interests and rights granted by British Columbia to extract gold resources. Furthermore, the parties recognize that they have a mutual and beneficial interest in cooperating with each other to advance and complete the Yellowjacket Project in a timely, environmentally responsible and orderly manner.
Commissioning and test work on the mill facility was completed in June 2009 and stockpiled material from 2008 bulk sample work was processed for approximately two weeks. Excavation activity and expansion of the existing pit took place from mid-August to mid-September. Approximately 40,000 tonnes of material was mined, with approximately 9,000 tonnes of material stockpiled for processing. Overall production was severely constrained by numerous breakdowns, equipment failures and permitting delays. Although some doré was produced onsite, the smelting furnace was not efficient which led to a decision to process the bulk of the concentrate offsite. Unfortunately, the processing of the gold concentrate into gold matte for delivery to the refinery has progressed much slower than anticipated and gold concentrate is still being processed. Based on the amount of gold delivered to the refinery to date and the results of fire assays on the gold concentrate it is believed that the total 2009 production will be between 200 and 225 ounces of gold. A definitive quantity of gold recovered will be reported when final processing activity has been completed.
Under the terms of the Joint Venture Agreement, Eagle Plains earned an initial 40% interest in the Project from Prize by making a $2,000,000 cash payment. Through subsequent cash calls and the resultant dilution in accordance with the Joint Venture Agreement, Eagle Plains increased its interest in the project to approximately 60%.
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), Parkside Resources Inc., 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.