Kenai Resources Ltd.: Sao Chico Gold Project, Brazil, NI 43-101 Technical Report
January 20 2011 - 1:35PM
Marketwired
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.
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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