Red Mile Minerals Announces Dorset Gold Property Option Agreement, Newfoundland
October 25 2010 - 12:40PM
Marketwired
Red Mile Minerals Corp. (TSX VENTURE: RDM) "Red Mile" (the
"Company") has acquired an option (the "Agreement") to earn a 100%
interest in the Dorset gold property located in northern
Newfoundland, Canada from Tenacity Holdings Ltd. ("Tenacity") of
St. John's, Newfoundland.
The Dorset property lies approximately 7km west southwest of
Rambler Metals & Mining PLC Ming Mine Project and 10 km
southwest of Anaconda Mining Incorporated's Pine Cove Gold Mine.
The Dorset Property is comprised of eight mineral licences
encompassing 69 claims totalling 1725 hectares in area.
History
The Dorset property covers 12 kilometers of strike length along
the 'Baie Verte Line' crustal suture prospective for gold
mineralization in Newfoundland. The property includes the original
Dorset showing discovered in 1988 which assayed up to 408 g/t gold
in a grab sample followed by representative channel samples from
surface trenching of 177 g/t gold over 0.35 meters; 56 g/t gold
over 2.5 meters, and 42 g/t gold over 1.5 meters over a strike
length of 150 meters. Gold discoveries in the mid-1990's along
strike over the 12 km property length include grab samples from
outcrop of 10.9 g/t gold, 18.7 g/t gold, and panned concentrates up
to 6.2 g/t gold in locally-derived till. None of these have been
followed up by diamond drilling or trenching.
John Hickey, President & CEO of Red Mile commented: "We are
excited about acquiring a quality property in a structurally
favourable setting, that has been under-explored and has had
several multi ounce gold showings."
Transaction Terms
To acquire a 100% interest in Tenacity's Dorset Property, Red
Mile will, subject to Regulatory Approval, issue 100,000 shares in
tranches of 25,000 upon signing, and 25,000 shares every 6 months
for 18 months and in addition issue 1,000,000 non-transferable
share purchase warrants in tranches of 250,000 upon Regulatory
Approval, 250,000 after 6 months, 250,000 after twelve months, and
250,000 after eighteen months respectively, after signing of the
Agreement. The share purchase warrants entitle Tenacity to purchase
one common share per warrant for a period of eighteen months from
the date of issue at a price equal to the closing market price on
the day prior to the respective dates of issuance of the
warrants.
Red Mile must also incur exploration expenses of not less than
$750,000 before the fifth anniversary of the signing date of the
Agreement. A 2.5% net smelter return royalty ("NSR" or "Royalty")
has been reserved in favour of Tenacity; Red Mile may purchase and
terminate 40% of the Royalty at any time upon paying to Tenacity
Gold an aggregate cash payment of $1,000,000 whereupon the Royalty
will be reduced to a 1.5% NSR.
Work Plan
A detailed compilation of Dorset property geological,
geophysical, and drilling information is underway. A program of
field mapping and prospecting is planned in 2010 to define drill
targets.
Qualified Person
Kerry Sparkes M.Sc., P.Geo and Director of Red Mile is the
Qualified Person responsible for the technical information
contained within this release.
About Red Mile Minerals
Red Mile Minerals is a tightly held mineral exploration company
with a gold property along the prolific Destor-Porcupine
gold-producing region in Ontario and the Dorset Property in Baie
Verte, Newfoundland. Red Mile continues to seek additional mineral
exploration opportunities where the company's exploration expertise
and corporate share structure could substantially enhance
shareholder value. Currently the are 9,915,000 shares are issued
and outstanding.
On behalf of the Board of Red Mile Minerals Corporation
John Hickey, President and CEO
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: Red Mile Minerals Corp. John V. Hickey President &
CEO (416) 637-2139 office@redmileminerals.com
www.redmileminerals.com