CALGARY, AB, Nov. 2, 2011 /CNW Telbec/ - Forest Gate Energy Inc. (TSXV:
FGE) reports that its mineral group has completed its acquisition of
the Cuff Lake iron property located in the Abitibi region of Quebec,
approximately 160 kilometres southeast of Val d'Or and 145 kilometres
south of Forest Gate's Pershing iron property.
As a result of the transaction Forest Gate owns a 100% interest in a
mineralized iron-bearing land package consisting of 151 contiguous
mining claims extending in an east-west direction over a distance of 16
kilometres (10 miles). The property is accessible by road and highway
and is close to additional infrastructure and an experienced,
indigenous workforce. This represents the second iron property
acquisition that the mineral group has made in 12 months.
"Cuff Lake iron is a strategic acquisition for the mineral exploration
side of this company's business," said Michael Judson, Forest Gate's
President & CEO. "The acquisition of an iron property located in the
Abitibi region of Quebec is an obvious synergistic fit with our 100
percent-owned Pershing iron property, which is located within
Judson says the company will start its exploration program at Cuff Lake
possibly as early as December 2011 by flying an aeromagnetic survey.
"We could be drilling the property this winter," said Judson. "And we
may be able to finish 2012 with resource estimates on both Cuff Lake
As previously disclosed in a news release dated October 3, 2011, the
property known as Cuff Lake has a non-43-101-compliant historical "open
pit mineable reserve of 20,071,000 tons of magnetite ore grading 17.4%
soluble iron" (source: Expo Iron Ltd. report, December 13, 1971) and an
additional potential resource of approximately 180 million tonnes of
similar quality magnetite-rich mineralization (source: Fenton Scott
2010 internal reports) that was geologically inferred on the basis of
widely separated holes and magnetometer data.
Forest Gate Energy emphasizes that they have made no effort yet to
reclassify the historic estimates of resources as current
resources. These estimates therefore should not be treated as current
resource estimates nor should they be relied upon. Furthermore,
because no recent work has been done to evaluate the economics of the
deposit, there is no guarantee that the quoted historic "reserve"
figure is potentially economic. Economic studies done in 1970 do not
mean the mineralized iron deposit would be found to be economic today.
Historical reports on the property have estimated a wide range of total
potential tonnage of iron mineralization that varies from 110 million
tons (short) to 268 million tons depending on depth and width used to
calculate the volume for each deposit. An extensive drilling program
will be required to verify these calculations. In accordance with NI
43-10, Sec 2.3 (2), the reader is cautioned that the estimate of the
potential quantity and grade for the deposit is conceptual in nature
and that there has not been sufficient exploration in this instance to
define a mineral resource nor is there certainty that further
exploration will delineate the target as a mineral resource.
The historical reports indicated that iron rich bands form several
magnetite-rich locations each varying from 1.5 to 2 kilometres (5,000 -
6,500 feet) in length, 61metres (200 feet) to 152 metres (500 feet) in
width, with an average 91metres (300 feet), and having down dip
extensions greater than 250 metres. The magnetite-rich bands trend
approximately east-west and dip at 45o to 55 o toward the north.
Metallurgical testing by Expo Iron Ltd (internal report August 1, 1970)
indicated that the iron-bearing mineralized rock crushed to minus ten
mesh and treated on a dry magnetic drum would retain 34.7% of the
ground material, 99.1% of which was magnetite and which assayed 44.2%
soluble iron. These concentrates continued to contain high sulphur
(3.74%). (Subsequent metallurgical tests at Lakefield Research
laboratory reported that this sulphur content could be reduced to 0.50%
by milling processing. See details below)
"Beneficiation tests conducted at Aerofall Mills Limited in Clarkson,
Ontario, using 53-ton representative bulk sample, have adequately
demonstrated the ability to produce a coarse, dry, pre-concentrate by
autogenous grinding and low-intensity magnetic separation
techniques." Finer grinding to minus 150 mesh produced magnetic
concentrate having higher grades (64% soluble iron).
"Grade of these pre-concentrates was 63-64% soluble iron. Tests to
produce superconcentrates were followed at Lakefield Research
Laboratory in Lakefield, Ontario. Re-grinding to 70-75% minus 325 mesh
and wet magnetic separation resulted in the production of
superconcentrates grading 70.76% soluble iron, 0.96% silica, 0.50%
sulphur, 0.008% phosphorus, 0.008% titanium and 0.20% manganese."
Forest Gate Energy Inc. has not undertaken any recent metallurgical
tests to verify the quoted metallurgical results. All metallurgical
results quoted above are historic in nature and taken from an Expo Iron
Ltd report dated August 1, 1970
The historic 1971 Assessment Report for Expo Iron Ltd states that 17,
048 feet of diamond drilling had been completed on the property. The
iron mineralization is covered by approximately 10 metres of overburden
making it amenable to open pit mining methods.
Historically quoted resources at Cuff Lake were based on a review of
historical work reports that used data drawn from surface sampling,
diamond drilling, ground and airborne magnetometer surveys. Forest Gate
has not completed any work on the property.
"The Cuff Lake project which is approximately 160 kilometres
south-southwest of the Pershing iron showing is a highly complimentary
acquisition for Forest Gate," said Michael Judson, President of Forest
Gate. "The successful development of the Cuff Lake iron project will
enhance the overall economics of developing Pershing iron in the
heartland of Quebec."
"Iron ore projects in Abitibi Region of Quebec will benefit greatly from
the existence of well-established infrastructure and proximity to
existing railroads. As an example, a rail line operated by CN runs
through Senneterre (40 kilometres north-northwest from Pershing) and
connects directly to the deep-water port at Quebec City. This greatly
differentiates the capital costs of our prospects from those located in
more remote locations," said Judson.
In consideration of the acquisition, Forest Gate paid the vendor $50,000
in cash. Forest Gate will pay the vendor an additional $50,000 on
October 31, 2012. The vendor holds a 2% Net Smelter Royalty; one
percent of this royalty can be purchased by Forest Gate for $3 million.
Forest Gate will also have a Right of First Refusal in the event the
royalty holder elects to sell the remaining one percent royalty.
A finder's fee in the amount of $10,000 ($4,000 in cash and $6,000 in
Forest Gate common shares at $0.06) was paid to a consultant.
New video on website:
Please visit the company website (www.forestgate.ca) to view management's recent visit to the Cuff Lake Property.
Technical information in this news release was prepared in accordance
with Canadian regulatory requirements as set out in National Instrument
43-101 and has been reviewed by Edward Procyshyn, Geo, who is the
qualified person as defined by NI 43-101.
About Forest Gate
Forest Gate Energy Inc. is a publicly listed oil and gas exploration and
production, and non-energy resource company trading on the TSX Venture
Exchange under the symbol FGE. The Company is seeking to increase
shareholder value through participation and development of energy and
other resources in Canada and internationally.
Certain statements regarding Forest Gate, including management's
assessments of future plans and operations and Forest Gate's
anticipated financial performance, may constitute forward-looking
statements under applicable securities laws and necessarily involve
known and unknown risks and uncertainties, most of which are beyond
Forest Gate's control. These risks may cause actual financial and
operating results, performance, levels of activity and achievements to
differ materially from those expressed in, or implied by, such
Such factors include, but are not limited to: the impact of general
economic conditions in Canada and the United States; industry
conditions including changes in laws and regulations including adoption
of new environmental laws and regulations, and changes in how they are
interpreted and enforced; competition; the lack of availability of
qualified personnel; fluctuations in commodity prices; the results of
exploration and development drilling and related activities;
imprecision in reserve estimates; the production and growth potential
of Forest Gate's various assets; fluctuations in foreign exchange or
interest rates; the ability to access sufficient capital from internal
and external sources; and obtaining required approvals of regulatory
Neither TSX Venture Exchange nor its Regulation Service Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or the accuracy of this
SOURCE FOREST GATE ENERGY INC.
For further information:
ROBERT KRAMBERGER, V-P, INVESTOR RELATIONS OR MICHAEL JUDSON, PRESIDENT & CEO