Kenai Resources Ltd. ("Kenai") (TSX VENTURE: KAI) -
-- Engagement of key Geological Consultants Exploration Alliance Ltd.
-- Engagement of key Engineering Personnel and Project Managers D.E.N.M.
Ltd.
-- Commencement of infrastructure improvements on site
-- Commencement of plant foundations construction
-- Plant progressing through Customs
-- TSX-V reviewing independent NI 43-101 Technical Report
Further to the Company's News Release of September 21, 2010, the
Company wishes to provide an update of its activities toward
consummating the Sao Chico Gold Project option, TSX Venture
Exchange approval and progress towards early gold production.
About the Sao Chico Project:
The Sao Chico gold project is the subject of the recently
announced Option Agreement dated September 21, 2010 between Kenai
and Gold Anomaly Ltd. ("Gold Anomaly"). The Option Agreement, along
with the recent NI 43-101 report commissioned by Kenai and
supporting papers have been lodged with TSX-V for which conditional
approval has been received.
The Option Agreement provides Kenai with the right to acquire
initially 50% and thereafter in stages 75% and 100% of the Sao
Chico gold project. The project is subject to an existing 40% net
profit sharing agreement ("NPI") and a royalty equivalent to
US$8.80 per ounce of gold production, payable to the owner of the
mining rights.
The Sao Chico project is centred at 6.41 degrees S 55.94 degrees
W, 240 kilometres south of the city of Itaituba, capital of Para
state, and 580 kilometres south-east of the major inland port city
of Manaus. It is located in the emerging Tapajos Gold District, 54
kilometres south-east of the Tocantinzinho project recently
acquired by Eldorado Gold Corp. and 23 kilometres south-west of the
established Palito underground gold mine owned by Serabi Mining
plc, in which Eldorado Gold Corp. acquired a 26.8% equity interest
in June 2010. Mineralisation at Sao Chico is located within the
same geological sequences that host the Tocantinzinho and Palito
gold project defined mineral resources.
The Sao Chico project is within a single Authority to Prospect
exploration permit, AP12836, of 1416 hectares, within which there
is a small trial-mining Use Permit (locally, "GUIA") covering 56.5
hectares. The GUIA covers the area of historical garimpeiro or
artisanal mining and permits 50,000 tons to be mined and processed
up until June 6, 2011, with the possibility of a 12 month extension
for a further 50,000 tons. An application for renewal has been
lodged covering a further three year term for AP12836 from November
30, 2010, when the current permit expires.
The following Sao Chico project information is taken from
information and earlier releases provided by Gold Anomaly.
Apart from garimpeiro activity over around 30 years, for which
there are no production records, there has been no prior modern
exploration. Gold Anomaly's local subsidiary has conducted
exploration work including 16 trenches totalling 377 metres. The
local owner of the mining rights constructed a vertical shaft to a
depth of some 18 metres on one of the quartz-sulphide veins and
established a drive in the primary vein material, shown in the Gold
Anomaly photo below, along a strike length of approximately 68
metres. Gold Anomaly channel sampled the drive with several high
grade intercepts, including a maximum assay of 348 g/t gold over 1
metre. Gold Anomaly's limited historical metallurgical testwork has
indicated satisfactory gravity processing recoveries and very good
cyanide process leach recoveries.
To view the first photo accompanying this press release, please
click on the following link:
http://media3.marketwire.com/docs/KAI4.jpg
Engagement of key Geological Consultants Exploration Alliance
Ltd.
Kenai has now engaged Exploration Alliance Ltd. ("EAL") to
coordinate and direct the technical work towards the demonstration
of defined mineral resources and mineral reserves at Sao Chico. EAL
has prior experience both in the region and with world class
deposits. They are the authors of the recent NI 43-101 technical
report on Sao Chico commissioned by Kenai, currently awaiting TSX
approval.
A core early objective of Kenai is to demonstrate over the next
year an initial defined mineral resource for Sao Chico in NI 43-101
compliant terms. Based on Gold Anomaly's prior work and
interpretation, the target is towards an initial high grade open
pit and underground resource containing a minimum of 250,000 gold
ounces with substantial blue-sky potential.
Kenai views the project to be significantly larger. It is 54
kilometres south-east of the 2 million ounce resource Tocantinzinho
project recently acquired by Eldorado Gold Corp. and 23 kilometres
south-west of the established Palito underground gold mine owned by
Serabi Mining plc, in which Eldorado Gold Corp. acquired a 26.8%
equity interest in June 2010.
Engagement of key Engineering Personnel and Project Managers
D.E.N.M. Ltd.
Kenai, in conjunction with Gold Anomaly, has engaged D.E.N.M.
Ltd. ("DENM") as Project Managers for the early commencement of
gold production at Sao Chico, targeted before the end of 2010.
DENM has extensive experience with the establishment of small
scale gold projects in South America, Central America and Mexico,
and have, over the past two years, been actively involved with the
Sao Chico project.
Commencement of infrastructure improvements and pre-production
works at Sao Chico site
Extensive preparatory work is now being undertaken at Sao Chico,
mainly covering several infrastructure improvements and also
preparations for the installation of the gravity processing plant
currently being imported to Brazil.
The infrastructure works include building of additional camp
accommodation units, pictured below, with an expanded mess, camp
rewiring, water supply and sanitation, enhanced communications,
local roads and airstrip upgrade.
To view the second photo accompanying this press release, please
click on the following link:
http://media3.marketwire.com/docs/KAI2.jpg
Work on the preparation of plant foundations has recently
commenced, with preparing the footings for the foundations for the
slab on which the gravity plant and ancillary equipment are to be
mounted, as seen in the photo below.
To view the third photo accompanying this press release, please
click on the following link:
http://media3.marketwire.com/docs/KAI3.jpg
Plant progressing through Customs
The gold gravity plant concentration units along with ancillary
plant items sourced by Gold Anomaly from Gekko Systems have
recently arrived in Brazil. They are going through Customs
clearance and related procedures ahead of being trucked to Sao
Chico within the next fortnight.
It is expected by Kenai that it will be possible for gravity
plant commissioning and initial gold production to occur within the
next 60 days.
About Kenai Resources:
Kenai is a Canadian company focussed on precious mineral project
exploration and development, towards early significant gold
production.
Apart from the Sao Chico gold project in Brazil, Kenai is also
involved in exploration projects - Albisu, Nevada, an advanced gold
exploration project, and the wholly-owned Quartz Mountain and Hope
Butte gold projects in South-Eastern Oregon, both located in
Malheur County, close to the Oregon border with Idaho. All three of
these projects are epithermal gold projects.
Kenai's current gold resources from the two Oregon projects,
aggregating approximately 500,000 contained gold ounces, are
summarized as follows:
Ounces
Project Tonnes Grade Au Status/Classification
Quartz Mountain 15,050,200 0.80 g/t Au 352,667 Indicated Resources, NI
43-101 compliant
Hope Butte 5,000,000 0.91 g/t Au 146,300 Historical, not NI 43-101
compliant
Footnotes:
1. For Quartz Mountain, resources above a 0.34 g/t cutoff with silver
converted to gold equivalent using a ratio of 49.5:1 silver to gold.
Metallurgical recoveries were not considered. Indicated resources are
as reported in an independent November 2006 NI 43-101 report, posted on
SEDAR at that time.
2. The Hope Butte resources are considered historic in nature, do not
comply with current NI 43-101 standards, have not been verified by the
Company and therefore should not be relied upon. It is uncertain if
further exploration will result in the discovery of an economic mineral
resource.
On behalf of the Board of Kenai Resources Ltd.
Greg Starr, President and CEO
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Forward-Looking Statements: Statements in this release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed and
elsewhere in the Company's periodic filings with Canadian
securities regulators. The economic viabilities of the resources
estimates discussed in the release have not been established and
may not be. Such information contained herein represents
management's best judgment as of the date hereof based on
information currently available. The Company does not assume the
obligation to update any forward-looking statement.
Shares Outstanding: 35,906,734
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.
Contacts: Kenai Resources Ltd. Greg Starr President and CEO
604-669-5753 604-688-9895 (FAX) info@kenairesources.com
www.kenairesources.com
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