Kenai Resources Announces Private Placement
January 17 2011 - 8:00AM
Marketwired Canada
Kenai Resources Ltd. (TSX VENTURE:KAI) ("Kenai") announces that it has
negotiated, subject to the acceptance of the TSX Venture Exchange, a
non-brokered private placement totalling up to $5,000,000. These funds will be
raised by Kenai issuing up to 20,000,000 units at a price of $0.25 per unit,
each unit consisting of one common share and one-half of one share purchase
warrant. Each whole warrant will entitle the holder, on exercise, to purchase
one common share at a price of $0.35 for a period of two years from the date of
issue.
Finder's fees may be payable on a portion of the private placement, in
accordance with the policies of the TSX Venture Exchange.
A substantial portion of the net proceeds of the private placement will be used
to fund Kenai's acquisition costs and initial exploration and development
commitments under its option to purchase up to a 100% interest in the Sao Chico
gold project located in Northern Brazil. The balance of the funds will be used
for working capital purposes.
About the Sao Chico project:
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 to 30 million ounces of gold
(unofficial government 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 GUIA license provides for mining and processing of up to 50,000 tons of gold
mineralized rock per year for up to two years. It is anticipated that there is
currently 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
within one month of plant start-up, from veins that vary in thickness from less
than one centimetre to three metres. It is estimated from trenching and sampling
undertaken since August 2010 that the vein aggregate thickness over the
currently identified one kilometre 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. The new and used plant
components have been delivered to site and plant construction is expected to be
completed in the next two months. Details of Kenai's investment in the Sao Chico
project can be found in its news release dated September 21, 2010.
Recent exploration results to date indicate that structures hosting vertical to
sub-vertical veins are consistent over up to 1 kilometre along strike with a
large variation in vein width over short distances. Similarly gold grades are
variable but can locally reach bonanza grades. Up to ten individual, sub
parallel veins between 20 centimetres and 1 metre wide are observed at Sao Chico
over a total width of approximately 130 metres.
The next phase of exploration work at Sao Chico is to cover underground sampling
of approximately 70 metres of horizontal drives developed along one of the
unoxidised quartz/sulphide reef structures, which will be completed later in
January and the commencement of an initial 2,500 metre program of core drilling
with up to five fence lines of drilling, to help define the non-oxidized
mineralization potential below the highly oxidized outcropping material that has
been exploited by local artisanal miners and to test the assumed down-dip
continuity of the reef structures to a vertical depth of 200 metres. Kenai
anticipates this drilling will commence by March 2011.
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
Indicated Resources
Quartz Mountain 15,050,200 0.80 g/t Au 352,667 NI43-101 compliant
Historical, not NI
Hope Butte 5,000,000 0.91 g/t Au 146,300 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 Services, Neil Cole, is responsible for
technical information in this release. Mr Cole has sufficient experience which
is relevant to the style of mineralization under consideration and to the
activity which is being undertaken and planned to qualify as a Qualified Person
under NI 43-101. Mr Cole has verified the technical data disclosed in this
release, including references to planned exploration and operational activities,
and the sampling of the gold-bearing reef structures. Mr Cole has consented to
the inclusion in this release of such technical information in the form and
context in which it appears.
Shares Outstanding: 35,906,734
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