Kenai Resources Ltd.: Sao Chico Gold Project, Brazil, NI 43-101 Technical Report
January 20 2011 - 12:35PM
Marketwired Canada
Kenai Resources Ltd. (TSX VENTURE:KAI) ("Kenai") is pleased to announce the
release of its National Instrument (NI) 43-101 Technical Report titled "Field
Review and Observations of the Sao Chico Property, Brazil". The report has been
filed under Kenai's corporate profile on SEDAR and on Kenai's website at
www.kenairesources.com. The report was prepared by Exploration Alliance Ltd.
("EAL"), an independent geological consultancy.
Mr. Andrew Tunningley, Principal Exploration Geologist of EAL, is a Qualified
Person within the meaning of NI 43-101 and is the primary author of the Sao
Chico Technical Report.
Highlights extracted from the EAL NI 43-101 Technical Report include:
-- A total of 30 channel samples were collected (by GOAB, not independently
by EAL) and returned maximum assay results of 348 g/t gold, 41 g/t
silver, 0.23% copper, 5.7% lead and 3.2% zinc. Eighteen of the 30
samples assayed over 1 g/t gold and averaged approximately 15 g/t gold.
Observations (by EAL) of stockpiled material from the shaft indicates
that these samples were taken from sulphide bearing quartz vein material
and pyrite altered host rock. The encouraging results of GOABs sampling
demonstrates the bonanza grades and excellent exploration potential of
the Sao Chico project.
-- EAL channel sampled seven of the recently excavated trenches as part of
a verification sampling program with encouraging results including 112
g/t gold over 1 metre (TR01), 3.42 g/t gold over 1 metre (TR02) and 3.43
g/t gold over 1 metre (TR05). Gold assay results of pulp duplicates
showed considerable variation suggesting a nugget effect.
-- EAL considers Sao Chico to hold excellent exploration potential and only
a small proportion of AP12826 has been explored. Further work should
include diamond drilling, geological mapping, geochemical and
geophysical surveys, bench scale metallurgical testwork and microscope
gold studies for a total cost of CAD 1.3 million.
-- Sao Chico is hosted in an intrusive complex composed of granodiorite to
diorite belonging to the Pararauri Suite.
-- Mineralisation comprises a number of east south-east striking, sub-
vertical, mesothermal quartz-sulphide veins which have been observed
outcropping in three different areas within the 1416 hectare exploration
licence AP12836.
-- The main area of exploration activity and artisanal workings is on a
vein zone in the southwest of AP12836 which comprises up to ten
individual veins observed over a total width of 130 metres at surface.
Individual veins vary between 20 centimetres and 3 meters wide.
Structures which are host to the veins are consistent along strike for
greater than 900 metres. Vein width and gold grade is variable over
short distances.
In its report, EAL described Sao Chico as a polymetallic mesothermal vein
system, and that such mesothermal vein deposits can display relatively large
vertical extents, with highest metal grades commonly observed at the vein-wall
rock contacts. The EAL report referred to the proximity of the Palito Gold Mine
at 20 kilometres north-east and the TZ (Tocantinzinho) gold deposit 54
kilometres north-west of Sao Chico, both hosted in the same Pararuiri Suite of
rocks as Sao Chico.
Kenai President and CEO, Greg Starr, comments, "Kenai is very pleased with the
quality of EAL's work and report, and is in the process of implementing the EAL
recommendations. An EAL geologist is now on site preparing for sampling of
primary quartz/sulphide veins underground in the next few days and for the
commencement of core drilling in the next few weeks. EAL's recent work has
exposed new high prospectivity areas of old workings outside the area where 21
trenches have been excavated and sampled since last August, which will be tested
by the planned 2500 metre core drilling program."
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 to 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.
Within the 1416 hectare exploration licence (AP12836), a smaller 56.5 hectare
GUIA or trial mining use permit license area provides for mining and processing
of up to 50,000 tons of gold mineralized rock per year for up to two years as
part of feasibility studies. 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 Gold Aura Brasil's trenching
and sampling 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. A gravity processing
plant has been purchased and delivered to site and is currently being installed,
for commissioning in the next several weeks. 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
Indicated Resources
Quartz Mountain 15,050,200 0.80 g/t Au 352,667 NI43-101 compliant
Historical, not NI 43-
Hope Butte 5,000,000 0.91 g/t Au 146,300 101 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.
The technical content of this news release has been reviewed by Kenai's Vice
President Technical Services, Neil Cole, who 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, who is the technical person responsible for this news release,
has verified the technical data disclosed in this release, including references
to Kenai's other projects and planned exploration and operational activities,
and the sampling of the gold-bearing reef structures. This news release has been
reviewed and approved by Mr Tunningley of EAL who has consented to the inclusion
in this release of such technical information from the EAL NI 43-101 report in
the form and context in which it appears.
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