Eagle Plains and SpectrumGold Execute Agreement to Consolidate Galore Creek District, Eagle Plains Closes Financing
Cranbrook, B.C.: Eagle Plains Resources Ltd. (EPL:TSX-V) and SpectrumGold Inc., a 59% owned subsidiary of NovaGold Resources Inc. (TSX: NRI) have reached an agreement whereby SpectrumGold may acquire up to an 80% interest in the Copper Canyon gold-silver-copper prospect adjoining their Galore Creek Project located in northwestern British Columbia, Canada. The Galore Creek Project is a multi-million ounce gold-silver-copper deposit located approximately 75 kilometers northwest of Barrick Gold’s Eskay Creek gold-silver mine that produces 350,000 ounces of gold annually. The project lies west of the Cassiar Highway and 150 kilometers northeast of the tidewater port of Stewart, British Columbia.
Under the terms of the agreement, SpectrumGold has an option to acquire a 60% interest in the project from Eagle Plains by completing C$3 million in exploration expenditures over the next 4 years, issuing 400,000 shares of SpectrumGold and making payments totaling C$250,000. SpectrumGold may earn an additional 20% interest in the project for a total of 80% by paying Eagle Plains C$1 million and completing a Feasibility Study on the project by no later than September 2011. This agreement supercedes a Letter of Intent between Eagle Plains and Viceroy Resource Corp. announced on February 12th, 2003.
The Copper Canyon property has seen intermittent exploration work from the mid 1950s to 1991. This historic exploration work at Copper Canyon indicates the presence of widespread gold, silver and copper mineralization similar to the Galore Creek deposit. To date mineralization has been identified in three separate areas on the property and remains open to expansion. Highlights from drilling on the project in 1990 are summarized in the table below.
|DHID||Length (m)||Length (ft)||Gold (g/t)||Silver (g/t)||Copper (%)||Type|
Galore Creek Drill Program Underway
SpectrumGold previously announced an agreement with subsidiaries of Rio Tinto plc and Anglo American plc to acquire a 100% interest in the 5 million ounce gold-silver-copper Galore Creek deposit. Galore Creek is one of the largest and highest grade alkalic intrusive-related gold-silver-copper deposits in North America. The Copper Canyon claims are immediately adjoining the Galore Creek claim block. SpectrumGold management believes that consolidation of the two properties can provide significant potential synergies for development of both the Galore Creek and Copper Canyon deposits. SpectrumGold plans to develop the projects jointly as a single consolidated project.
The mineral system at the Galore Creek Project remains open and the current exploration concept is to outline a resource of 80-150 million tonnes of material with bulk grades exceeding 2.0 to 3.0 g/t gold equivalent within the larger mineralized system that would be amenable to selective open pit and underground mining operations.
SpectrumGold has initiated a 6,000 foot core drilling program anticipated to be complete by the end of October. An initial due diligence review of the project has resulted in a re-interpretation of the controls to mineralization which indicates the project has excellent potential for a higher-grade more selective mining approach. The current exploration program is focused on testing this new geologic model for the project. In addition, a detailed re-logging of the existing 100,000 meters of core will be undertaken on both the Galore Creek and Copper Canyon properties. A major drill campaign is anticipated for the 2004 field season to test new targets and confirm this new geologic interpretation in preparation for a Pre-Feasibility Study.
Management of Eagle Plains feels that the agreement with SpectrumGold is consistent with the company’s strategy of advancing projects of merit which may be reassessed under evolving economic parameters. The project as a whole is poised to benefit from increasing gold prices, technological advances, and a favorable political climate currently present in British Columbia. The consolidation of the Galore Creek and Copper Canyon properties is considered to be an enormous step toward realizing the economic potential of the area.
Eagle Plains further announces that it has completed a non-brokered private placement to directors, officers and arms-length investors, as announced August 21st, 2003. A total of $330,000 CDN was raised through the issuance of 2,200,000 units at $.15 CDN per unit. Units consist of a non flow-through common share and a two-year warrant to acquire an additional common share, exercisable at $.30. No finders fees or commissions were paid. Funds generated by the financing will be used by the company for general working capital.
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.