Kenai Resources Ltd.: Encouraging Results From Sao Chico Gold Project New Gold Bearing Veins Discovered
December 16 2010 - 10:50AM
Marketwired Canada
Kenai Resources Ltd. (TSX VENTURE:KAI) ("Kenai") is pleased to announce results
of an ongoing trench sampling program established to define ore feed material,
in advance of the commissioning of a 200 tonne per day capacity test mining
plant at the Sao Chico gold project in the Tapajos Mineral Field, in
central-northern Brazil. The gravity concentrate plant is currently being
installed and is expected to be commissioned in the first quarter of 2011. Sao
Chico is an early stage gold exploration concession with a significant number of
exposed high grade gold veins and areas of past small scale mining by local
miners. Kenai is currently planning a 5,000 metre drilling program.
To date a total of 21 trenches have been excavated for a total length of 644
metres covering an east-west strike length of 450 metres and a north-south
distance of 300 metres. Individual trenches vary in length from two metres to
116 metres. A total of 518 samples have been collected and assayed. The samples
consist of one and two metre channel samples from the trench walls, rock chip
samples from exposed veins and grab samples from rock piles excavated from the
trenches. A total of 22 had assay values in excess of 1.0 g/t gold and are
listed below.
Trench Sampling Results Greater than 1.0 gram per tonne:
------------------------------------------------------------------------
Original Gold Gold Re-Assay
Trench No Interval (m) Assay (g/t) (g/t)
------------------------------------------------------------------------
1 9.0-11.0 4.32 8.81
------------------------------------------------------------------------
1 9.0-10.0 112.11
------------------------------------------------------------------------
1 9.0-10.8 2.37
------------------------------------------------------------------------
1 9.3-9.4 15.92
------------------------------------------------------------------------
2 0.5-0.6 109.7
------------------------------------------------------------------------
4 29-30 1.90
------------------------------------------------------------------------
5 2.0-4.0 1.06
------------------------------------------------------------------------
5 2.0-2.6 9.12
------------------------------------------------------------------------
5 2.0-3.0 3.43
------------------------------------------------------------------------
6 22.0-24.0 1.01
------------------------------------------------------------------------
8 35.3-35.6 1.56
------------------------------------------------------------------------
8 107.7-108.1 2.57
------------------------------------------------------------------------
10 21.6-21.7 3.34
------------------------------------------------------------------------
11 2.6-2.7 1.62
------------------------------------------------------------------------
13 27.5-29.0 4.13
------------------------------------------------------------------------
13 45.5-45.55 2.48
------------------------------------------------------------------------
14 6.1-6.4 1.67
------------------------------------------------------------------------
17 1.2-1.4 1.42
------------------------------------------------------------------------
19 22.0-24.0 3.55
------------------------------------------------------------------------
21 14.0-14.2 11.34
------------------------------------------------------------------------
21 15.45-15.55 2.89
------------------------------------------------------------------------
21 16-18 1.02
------------------------------------------------------------------------
Many of the trenches intersected garimpeiro (artisanal miners) workings where
the surface high grade vein material is mined out. These zones are not
represented in the trench assay results. They do, however, outline high priority
targets for drill testing below the trenches where the garimpeiro workings have
not reached. Throughout the Tapajos gold district, including Eldorado Gold's
Tocantinzinho project and Magellan Minerals projects, the significant modern
gold resource discoveries were targeted on old garimpeiros mine workings.
Two bulk 100 kg oxide samples from trenches 1 and 21 have been collected and
sent for metallurgical test work to assist in the gravity plant set up. The
grade of these bulk samples has been estimated at 15.6 and 3.7 g/t gold. The
metallurgical test results are expected within three weeks.
The trenching work has identified new east-west striking gold bearing veins
adjacent to the previously known ones. New veins have also been identified
further to the south. All veins vary in thickness from less than one centimetre
to three metres and it is estimated that their aggregate thickness over the
currently identified one km strike length is up to around five metres.
About Sao Chico
The Sao Chico gold project is located along a prominent NW-SE trend which is the
most mineralized zone within the Tapajos Mineral Field in central-northern
Brazil. The Tapajos field was the site of the biggest gold rush in Brazilian
history in the late 1970's and 1980s when approximately 500,000 garimpeiros
(artisanal miners) rushed to the area to exploit extensive areas of newly
discovered alluvial gold. Approximately 20-30 million ounces of gold (unofficial
figures) were produced from these operations before the easily won alluvial gold
deposits were largely depleted. The garimpeiros have little expertise in
underground mining and environmental considerations and were thus urged by the
government to consolidate their small claims and form joint ventures with
established mining companies. The area has had little exploration by modern
exploration methods compared to other equivalent gold fields in the world.
The Sao Chico project site is located adjacent to the Trans Garimpeiro Highway
and is also serviced by light aircraft from a nearby dirt airstrip. Previous
sampling of the sulphide zone vein material by Gold Aura Do Brasil Mineracao
Ltda (Gold Aura Brasil), Gold Anomaly's 100% owned subsidiary, has returned an
average grade of 15 g/t Au, determined from over 100 samples. Gold grades and
production from the weathered zone were reported to be erratic in the supergene
(weathered and oxidised) zones of the veins. While trial mining and processing
will be undertaken, it should be noted that the grade is conceptual in nature
and that there has been insufficient work undertaken to date to define a Mineral
Resource and it is uncertain if further exploration will result in the
determination of a Mineral Resource.
Gold Aura Brasil's investigations have revealed that the veins are weathered to
depths of up to around 10 metres below the surface alluvial cover of
approximately five to 10 metres thickness and that the weathered veins are
amenable to free digging by excavator. Preliminary test work on finely ground
samples has indicated that a high gold recovery can be achieved by gravity
concentrating techniques. Gold Aura Brasil plans to mine the weathered vein
material by open cut methods under a recently granted GUIA license to generate
an early cash flow and to provide a better understanding of the mineralization
as part of a feasibility study in preparation for applying for a Mining Lease to
mine the underlying unweathered sulphide zone mineralization.
The GUIA provides for mining and processing of up to 50,000 tonnes of gold
mineralized rock per year for up to two years. It is anticipated that there is
sufficient tonnage available to sustain an initial startup operation commencing
at a rate of 50 tonnes per day and increasing to 100 tonnes per day after two
months from veins that vary in thickness from less than one centimetre to three
metres. It is estimated that their aggregate thickness over the currently
identified one km strike length is up to around five metres.
Gold recovery will be undertaken via gravity concentration and a processing
plant has been purchased from Gekko Systems in Australia. This plant has now
arrived in Brazil. The new plant components have been delivered to Site and the
used components are awaiting final customs clearance before being trucked to
site.
Details of Kenai's investment in the Sao Chico project can be found in its
release dated 21 September, 2010.
About Kenai Resources:
Kenai is a Canadian company focused on precious mineral project exploration and
development, towards early significant gold production. In addition to the Sao
Chico gold project in Brazil, Kenai is also involved in exploration of the
wholly-owned Quartz Mountain and Hope Butte gold epithermal gold projects in
South-Eastern Oregon, both located in Malheur County, close to the Oregon border
with Idaho. Kenai's current indicated and historical gold resources from the two
Oregon projects are summarized as follows:
Project Tonnes Grade Ounces Au Status/Classification
Quartz Mountain 15,050,200 0.80 g/t Au 352,667 Indicated Resources
NI43-101 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 Directors of Kenai Resources Ltd.
Greg Starr, President and CEO
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.
Kenai's Vice President Technical Service Neil Cole, as the company's Qualified
Person has declared in writing that scientific or technical information in this
release has been prepared under the supervision of Mr. Ken Chapple, Executive
Director of Gold Anomaly Limited. Mr. Chapple has sufficient experience which is
relevant to the style of mineralization under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the JORC
Code and to qualify as a "Qualified Person" under NI 43-101. Mr. Chapple has
verified the data disclosed in this release, including sampling, analytical and
test data underlying the information or opinions contained in this release. Mr.
Chapple consents to the inclusion in this release of the matters based on his
information in the form and context in which it appears.
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