Kenai Resources Ltd.: Encouraging Results From Sao Chico Gold Project New Gold Bearing Veins Discovered
December 16 2010 - 11:50AM
Marketwired
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.
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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