Shares Outstanding: 44,373,100
VANCOUVER, Feb. 28 /CNW/ - Kootenay Gold Inc. (TSXV: KTN) ("Kootenay") is pleased to announce that it has entered into an Option
Agreement with Pinecrest Resources Ltd. (TSXV: PCR.P) ("Pinecrest") whereby Kootenay grants Pinecrest the right to earn an
undivided 50% interest in the Espiritu property located in Sahuaripa,
Sonora State, Mexico.
The Option Agreement allows Pinecrest to acquire a 50% undivided
interest by issuing an aggregate 750,000 common shares of Pinecrest,
over 3 years, with 200,000 issuable within 5 business days after
receipt of approval by the TSX Venture Exchange ("TSXV") and spending
US$1 million on the property over 4 years. At completion of the
earn-in a JV Agreement will be formalized.
States Kootenay President and CEO James McDonald, "We are pleased to have Pinecrest as a partner to begin exploration of
the Espiritu Concessions. The numerous showings identified on the
property to date, combined with overall size and strength of the
mineral system bode well for the discovery polymetallic deposits at
The J/V agreement with Pinecrest represents another milestone
development for Kootenay and its generative team as the Company
continues to assertively form J/V agreements on its stable of
prospective properties that have been under development in Canada and
Mexico over the past four years.
Adds Kootenay Chairman Ken Berry, "In keeping with Kootenay's generative model to develop near term
discoveries and long-term sustainable growth, the Espiritu is a
large-scale target that warrants immediate further investigation and
drill testing. The J/V with Pinecrest will allow Kootenay to fast-track
exploration on Esiritu as we continue to prioritize the aggressive
ongoing development of our core asset the Promontorio Silver Project in
With the completion of the Pinecrest Joint Venture, Kootenay has now
successfully joint ventured 19 of their 100% owned precious metals
properties in Canada and Mexico. Collectively, these strategic
partnerships afford Kootenay minimal financial exposure and up to $21
million in exploration and drilling expenditures over the next 5
The Espiritu polymetallic vein/breccia porphyry Property is made up of
two mineral concessions called Tarachi 2 and Tarachi 3 which total
approximately 10,000 hectares, located in Sahuaripa, Sonora Mexico.
Minera J.M., S.A. de C.V., a wholly owned subsidiary of Kootenay
incorporated under the laws of Mexico, is the sole legal and beneficial
owner of the Espiritu Property.
On the Espiritu Property two zones of precious and base metal
mineralization have been recognized; the Northeast zone dominated by a
copper-gold-molybdenum porphyry setting is separated by a major fault
from the Southwest zone dominated by veins and stockworks of precious
and base metal mineralization.
The northeast Espiritu porphyry prospect is a 2.2 x 1.4 km sub-circular
area defined by a concentric pattern of zonation diagnostic of copper
gold porphyry deposits.
Ten wide-spaced diamond drill holes totalling 2,135 meters of HQ core
were completed by Kootenay Gold in the Northeast Zone in 2009-2010.
Highlights include: 220.5 meters grading 0.15% copper and 0.14 gpt gold
in diamond drill hole ESP 06-10, including 12 meters grading 0.25%
copper and 0.42 g/t gold.In addition, significant molybdenum grades
were encountered by Kootenay Gold in drill hole ESP 04-09 which
intersected 18 meters of 0.113% Mo and 9 meters of 0.133% Mo and in ESP
06-10 returning 18 meters of 0.114% Mo and 9 meters of 0.133% Mo.
Additional drilling will be required to follow-up on the significant
molybdenum intercepts discovered in the initial drill program as well
as to test for higher grades of porphyry related copper and gold
The southwestern part of the system is represented by veins, breccias
and stockworks anomalous in silver, gold, copper, lead and zinc. The
main mineralization in the southwest is defined by several zones spread
out along a 2 km length. Fifty-eight grab samples were collected by
Kootenay Gold in 2009-2010 within the west, central and eastern parts
of the southwest polymetallic vein/breccia zone. The polymetallic
veins averaged 226 gpt silver, 1.58% lead and 1.57% zinc associated
with 0.18 gpt gold and 0.15% copper. From the 35 samples collected by Kootenay Gold in 2009-2010
from the polymetallic vein system, 29/35 assayed greater than 30 gpt
silver and 18/35 were greater than 0.100 gpt gold. The PS-1 area
returned assays of 277 and 217 gpt silver associated with anomalous
lead (to 6%) and zinc(to 1.5%). The PS-2 zone gave values of 686, 644
and 487 gpt silver and anomalous copper, lead and zinc from thirteen
The foregoing geological disclosure has also been reviewed and verified
by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the
purpose of National Instrument 43-101, Standards of Disclosure for
Mineral Projects). Mr. McDonald is a director of Kootenay.
About Kootenay Gold
Kootenay Gold is actively developing mineral projects in the Sierra
Madre Region of Mexico and in British Columbia, Canada. The Company's
flagship property is the former producing Promontorio Silver mine in
Sonora State, Mexico. The Company's objective is to develop near term
discoveries and long term sustainable growth. Kootenay's management and
technical team are proven professionals with extensive international
experience in all aspects of mineral exploration, operations and
venture capital markets. Multiple, ongoing J/V partnerships in Mexico
and Canada maximize potential for additional, new discoveries while
maintaining minimal share dilution.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this release. Cautionary Note to US Investors: This news release may contain information about adjacent properties on
which we have no right to explore or mine. We advise U.S. investors
that the SEC's mining guidelines strictly prohibit information of this
type in documents filed with the SEC. U.S. investors are cautioned that
mineral deposits on adjacent properties are not indicative of mineral
deposits on our properties. This news release may contain
forward-looking statements including but not limited to comments
regarding the timing and content of upcoming work programs, geological
interpretations, receipt of property titles, potential mineral recovery
processes, etc. Forward-looking statements address future events and
conditions and therefore involve inherent risks and uncertainties.
Actual results may differ materially from those currently anticipated
in such statements.
SOURCE Kootenay Gold Inc.
For further information:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
To view an interview with James McDonald visit:www.kootenaygold.ca