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VANCOUVER, Nov. 19 /CNW/ - Fire River Gold Corp. (TSX Venture: FAU) (the "Company") has entered into an agreement with Loewen, Ondaatje, McCutcheon Limited (the "Agent") to raise on a best efforts private placement basis up to $10 million through the issuance of units of the Company (the "Unit") at a price of $0.50 per Unit. Each Unit of the Company shall consist of one common share and one half common share purchase warrant (a "Warrant"), each whole Warrant exercisable to acquire one additional common share at a price of $0.75 per common share, for a period of 18 months after the closing date of the private placement (the "Closing"). Subject to regulatory approval, the Company has granted the Agent the right to over-allot the private placement by up to 20%.
The Company will pay the Agent a cash commission equal to 6% of the gross proceeds from the sale of the Units. In addition, the agents will receive broker warrants equal to 7% of the number of Units sold under the private placement, with each broker warrant being exercisable at any time for one Unit of the Company at the issue price of the private placement for a period of 18 months following the closing. Closing of the private placement is scheduled to take place on or about December 7, 2009 and is subject to the approval of the TSX Venture Exchange.
All securities issued in connection with the private placement will be subject to a regulatory hold period of four months plus one day.
The funds from the private placement will be used for the exploration and development of the Nixon Fork Gold Mine in Alaska, and for general corporate purposes.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Fire River Gold Corp.
Fire River Gold Corp. completed its IPO at the end of May 2009 and is the newest member of the International Metals Group ("IMG"), (www.internationalmetalsgroup.com) giving it access to a well established team with over 100 years of experience working in Alaska. The primary focus of FAU is the exploration and development of gold projects in Alaska. The recently acquired Nixon Fork Gold Mine in Alaska has the potential to be a near term gold producer. Management's objective is to make FAU a North American gold producer in the next 18 months.
Nixon Fork Gold Mine:
- Near Term Gold-Copper-Silver Producer
- Fully Constructed 200+ tpd Mill
- Turn-key Mining-Milling Operation
- Mine Fully Permitted and Bonded
- Significant Exploration Upside
On August 13, 2009, FAU exercised its option to purchase a 100% interest in Mystery Creek Resources, Inc. (MCR), a wholly owned Alaskan subsidiary of Pacific North West Capital Corp. ("PFN") (PFN:TSX), (http:///www.pfncapital.com). Pacific North West Capital is the largest shareholder on record of Fire River Gold Corp.
MCR controls the Nixon Fork Gold mine in Alaska, a former high-grade producing gold mine, which has produced between 1994 - 1999 approximately 145,000 ounces of gold at a grade of 42 grams per ton (1.48 ounce per ton) with copper and silver credits.
Nixon Fork Gold Mine Production History
Nevada Goldfields Inc. (NGI) operated the high-grade underground gold mine from 1995-1999, recovering 137,749 ounces of gold and 2.1 million pounds of copper, with additional silver credits. The average production grade was 42 grams per tonne (gpt) of gold, with an average production cost of US$266 per ounce. The mine was closed in 1999 due to declining gold prices. NGI's profitable operation at Nixon funded the parent company Real del Monte's development projects in Mexico. The Mexico projects were not successful and as a consequence the Nixon Fork Mine was closed in 1999 due to the bankruptcy of Real del Monte.
St Andrew Goldfields Ltd (SAS) leased the mineral rights in 2003. From 2004 through 2008 approximately US$54 million was expended on upgrades to the processing facilities and mine infrastructure and new equipment. During 2007 - 2008, 9,381 meters of reserve-resource definition drilling was conducted, but an updated reserve-resource estimate was not completed. Limited production in 2007 resulted in recovery of 6,775 ounces of gold and 78,644 pounds of copper. The mine facility and camp was placed on care and maintenance from the fall of 2008 until March, 2009.
SAS commissioned Roscoe-Postle Associates of Toronto to complete NI 43-101 technical reports in 2003, 2005 and 2006, which reviewed the mineral reserve-resource of the property and completed a financial analysis of proposed mining operations. These reports are available from SAS reports filed on Sedar, technical report dated Oct. 4, 2006, (6.1 MB-98 pages).
Facilities at the Nixon Fork Gold Mine include a 200 tpd floatation plant with a gravity gold separation circuit, a sulphide floatation circuit. In 2008, a CIL gold leaching circuit was purchased and approximately 60% installed. The mine also includes a fleet of mining vehicles, a self-contained power plant, maintenance facilities, drilling equipment, an 85 person camp, office facilities and a 1.5km long landing strip.
Mining and processing operations at Nixon Fork are fully permitted and bonded.
Mill Tailings Evaluation
The mill tailings from previous operations are being evaluated in consideration of reprocessing for recovery of the contained gold. SAS completed a study in 2004 which considered gold recovery in a CIL circuit, which they purchased and partially installed in 2007. Nevada Goldfields, the first operator of the Nixon Fork Mine produced an average head grade of approximately 43 grams per tonne and averaged 83% gold recovery. FAU has completed 21 drill-holes in the tailings area and has submitted 142 samples for assay and metallurgical work in an effort to confirm the results obtained by SAS. FAU expects to have results during the first quarter of 2010 and at that point will be able to make a production decision.
Exploration Upside Nixon Fork
As the last two operators of the project focused most of their financial efforts on underground development, the mine infrastructure, equipment, permitting and bonding, only a limited amount of their budget was spent on the exploration upside on the Nixon Fork project. However, several exploration targets have been identified and FAU's Management plans to focus on these and other areas throughout the claim block with the objective of outlining new resources during the 2010 exploration program.
Upon completion of the aforementioned $10 million financing, management plans to complete approximately 20,000 metres of underground and surface drilling slated to begin in April and May of 2010.
2009 Work Program
In May 2009 a CDN$1.25 million budget was allocated by PFN and is currently being completed by FAU with the objective of conducting a re-evaluation of mine reserves/resources, metallurgy, tailings production scenarios, financial analysis and updating the exploration plan going forward. Announcements of those objectives and the further use of proceeds for the above mentioned financing will be forthcoming.
Furthermore, the program focused on re-evaluating the previous geologic interpretation. The old drill-core is currently being re-logged in order to better define the relationship of mineralization to the associated igneous rocks, alteration patterns, and faulting.
Through this evaluation new drilling targets are being defined for the 2010 drilling program. Evaluation of the tailings reprocessing project is underway as well. The purpose of this program is to confirm previous sampling results and metallurgy. Two rounds of drilling have been completed by FAU in the tailings impound area and the results are currently being confirmed and reviewed.
For further information, please refer to FAU's news releases dated and June 29, 2009; August 13, 2009; North of 60 Mining News (Sept. 27, 2009) and the recent article written by The Northern Miner (Oct 26, 2009).
Golden Zone Project:
- NI 43-101 compliant mineral resource
- 14 targets are identified
- 2009 program in progress
- Excellent infrastructure, road access to property, 12 miles from
major highway and railroad, power nearby
In an effort to continue to add to the Company's overall gold ounce bank and development schedule, on October 8, 2009, FAU has completed a formal option agreement ("FOA") to acquire up to 100% of the Golden Zone Project with Hidefield Gold PLC and Mines Trust Company.
History Golden Zone
The Golden Zone Project is located 240 km north of Anchorage, Alaska on the south flank of the Alaska Range. The project is accessible by road, and is just 19 km from the Parks Highway, which connects Fairbanks and Anchorage. A fully self contained camp and work facility is on site.
The project is an advanced stage gold-copper-silver system with approximately 20,100 meters of drilling, extensive trenching, soil sampling grids, multiple geophysical surveys, and metallurgical samples collected from core and the underground workings in the main Breccia zone.
The project hosts several mineralization styles including an igneous rock hosted breccia pipe, several replacement zones of mineralization in calcareous rocks, and mineralization hosted in volcanoclastic rocks. The Breccia target is the most advanced and hosts the mineral resource and the 2009 exploration program will evaluate the possible extension on this mineralization. The Breccia is being evaluated as a possible open pit target. At least fourteen targets are identified within the 8000 hectare property and all have limited exploration work completed to date.
A technical report prepared by William Ellis for Fire River reports the mineral resource contained on the property and is available on Sedar's website.
In October 2009, a US$250,000 2009 program was completed and consisted of a trenching and mapping program that assayed for gold, silver and copper. The trenching was south of the Breccia Pipe Resource area toward the GAS Prospect and was designed to further investigate mineralization encountered in drillhole 6004, which was completed in 2006. Trenching in the GAS area uncovered extensive hornfels alteration and a strongly altered fault zone. Trench 4 in the Copper King area discovered hornfels at the contact with a quartz porphyry intrusive body. The hornfels contained copper staining and this target has not been previously drilled. Trenching in Long Creek area also uncovered previously unknown quartz porphyry intrusive bodies. Previous drill core was re-logged and samples were collected for assay from intervals not previously sampled. Geochemical samples have been submitted to ALS Chemex for gold and multi-element analyses and results are currently being confirmed and reviewed. For further information on the Golden Zone Project, please refer to FAU's news release dated October 8, 2009.
FAU has completed an initial Phase I work program consisting of surface exploration program, detailed rock sampling, mapping, rock chip sampling and metallic sieve analysis on selected samples and is continuing to move forward with the Phase I exploration on its 100% owned Draken Project. FAU expects to received and report the results of the 2009 exploration program in the first quarter of 2010.
Please refer to www.firerivergold.com for further information on the Draken Property.
Kansas Creek Property
Management is currently re-evaluating the data on the Kansas Creek Property with the objective of outlining a Phase I exploration program for the Spring 2010. For further information on the Kansas Creek Property, please refer to FAU's news release dated June 19, 2009.
Greg Myers, PhD., P.Geo., is the Qualified Person for this press release.
On behalf of the Board of Directors, I look forward to keeping you updated with our corporate developments.
President & C.E.O.
Neither 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 accuracy of this release. We seek safe harbour.
Disclaimer: This news release may contain certain "forward-looking statements". All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the British Columbia Securities Commission and available at www.sedar.com or filed with the Canadian National Stock Exchange. Any forward-looking statements are not guarantees of the Company's future performance and are subject to risks and uncertainties that could cause actual results, developments, and business decisions to differ materially from those contemplated by any forward-looking statements. Except as required by law, the Company undertakes no obligation to update any forward-looking statements.
SOURCE Fire River Gold Corp.
For further information: For further information: Tel: (604) 685-1870, Fax: (604) 685-8045, Email: email@example.com or visit www.firerivrgold.com; 2303 West 41st Avenue, Vancouver, B.C., Canada, V6M 2A3