CALGARY, July 21 /CNW/ - CMQ Resources Inc. (TSXV:NV) ("CMQ") is pleased to announce it has commenced reverse-circulation drilling at Red Canyon, a sediment-hosted gold project in Eureka County, Nevada. A 7,200 ft (2,195 m) drilling program is anticipated in up to eight drill holes.
CMQ's drilling will attempt to expand upon results in MR09-05C, a 2009 core hole designed to follow-up known gold mineralization at Red Canyon's Ice prospect, that intersected 119 ft of 0.152 oz Au/t (36.28 m of 5.25 g Au/t). This result verified the results in KR-001, a reverse circulation hole, which intersected 95 ft of 0.117 oz Au/t from 20 to 115 ft (29.0 m of 4.012 g Au/t from 6.1 to 35.1 m), but with 30% higher grade and 25% greater thickness. The program will test geologic, geochemical and geophysical targets southeast of MR09-05C in an area of complex faulting and folding.
To date, CMQ's drilling has been permitted through a Notice of Intent (NOI) with the Bureau of Land Management. The NOI limits surface disturbance to a maximum of 5 acres (2 hectares). A Plan of Operations/Permit for Reclamation (POO) was filed in March 2010 with the Bureau of Land Management and is expected to be approved later this year. The POO will allow for the drilling of 31 holes in the first phase. When complete, the POO will allow for up to 24.6 acres (9.96 hectares) of surface disturbance and increased flexibility in drill testing a variety of targets across the project.
The Red Canyon project includes 254 unpatented lode mining claims (7.9 square miles/ 20.6 square kilometers) on the Battle Mountain-Eureka Trend and adjoins U.S. Gold's Tonkin Springs property to the west. The project covers an erosional "window" that exposes hydrothermally altered and brecciated lower-plate carbonate rocks that are age equivalent to the rocks hosting the Cortez Hills gold deposit.
Risk of Continued Operations
At CMQ's Annual and Special Meeting of Shareholders held January 19th, 2010, shareholders failed to approve the proposed Amended Funding Agreement, as further described in CMQ's Information Circular dated December 21, 2009 on a "majority of the minority" basis, as required by the TSX Venture Exchange and applicable securities regulations. As a result of the failure of this proposal, CMQ is in default under its existing funding agreement with Matco Capital Ltd. ("Matco") and does not have any source of capital to continue its operations. CMQ is currently indebted to Matco for approximately $2,020,000, including unpaid interest. Matco has the contractual right, as at the date hereof, to enforce its security over all of CMQ's assets, including all of CMQ's exploration properties. Presently, CMQ is attempting to negotiate a forbearance agreement with Matco and is exploring other financing alternatives. There can be no assurances that any such forbearance agreement will be concluded. If a forbearance agreement is reached, the terms may be punitive to CMQ and its shareholders.
CMQ's directors have not made a filing under the Companies' Creditors Arrangement Act ("CCAA") because obtaining financing to fund a CCAA process is remote given the exploratory nature of CMQ business and the uncertain value of its assets.
CMQ currently has 6,534,670 Common Shares issued and outstanding. CMQ's website is located at www.cmqresources.com
John Hogg, CEO, CMQ Resources Inc., is the Qualified Person, as defined by National Instrument 43-101, who has reviewed and verified the data disclosed in the press release.
SOURCE CMQ Resources Inc.
For further information: For further information: John Hogg, Chief Executive Officer, CMQ Resources Inc., Tel: (775) 778-3693, E-mail email@example.com