SEC 12g 3-2(b) Exemption No. 82-4931
FORT FRANCES, ON, Oct. 1 /CNW/ - Q-Gold Resources Ltd. (TSX VENTURE:QAU) (FRANKFURT:QX9) (http://www.qgoldresources.com) announced that it has executed a CDN$ 1.2 million Option/Joint Venture Agreement with Upper Canyon Minerals Corp. ("UCM" - TSX Venture Exchange) ("Upper Canyon"). Under terms of the Agreement, Upper Canyon may earn a 49% participating interest in two large, prospective gold exploration tracts now owned by Q-Gold totaling 2,467.7 acres near Mine Centre, Ontario by meeting a total of $1.2 million of obligations as detailed below.
The northern-most tract is comprised of 1,324.5 contiguous acres of Crown Mining Leases and Patents and includes the historic "Golden Star" and "Isabella" gold mines (the "Golden Star Area").
The southern tract consists of 1,143.2 acres of contiguous Crown Mining Leases and mining claims, including the gold-bearing McKenzie Gray and Jolly Roger quartz veins (the "Nipigon Area").
GOLDEN STAR MINE
In the late 1890's, according to historical reports, the Golden Star Mine produced 10,758 ounces of gold from the No. 1 shaft of the "Star" vein, at an average gold grade of 0.56 ounces per ton ("opt") over a 1.1 metre vein width. Surface facilities were destroyed by a forest fire at the end of the 19th Century and production ceased. Historical estimates, circa 1939, show 10,000 tons of gold ore grading 0.45 opt remaining in the Golden Star Mine.
At the Golden Star Mine property, the gold mineralization is associated with three sub-parallel northwesterly trending vein systems which occur within metavolcanic rocks. This area will be the subject of an intensive geologic investigation by the Joint Venture during its upcoming Fall/Winter exploration program at Mine Centre.
The Isabella Mine consists of two quartz vein systems into which a 65 foot shaft has been sunk. Limited production of high-grade gold pockets was reported during the period 1899-1934. However, the area in and around the Isabella Mine is virtually unexplored by modern methods and remains highly prospective for gold. This area will also be targeted in the exploration program described above.
The Nipigon Area consists of six Crown Leases and ten mining claims. In addition to the gold-bearing McKenzie Gray and Jolly Roger veins, the area contains large portions of the Finger Lake Fault, an intensively sheared zone over a 20 kilometre strike length where a gold occurrence has been encountered. A small, inactive mill and two large tailings ponds with a currently inactive permit, which can be reinstated, are also included on the Nipigon Area.
The McKenzie Gray vein was the target of a recently completed 12-hole, 1,141 metre diamond drilling program conducted by Q-Gold. The objective was gold-sulfide mineralization in a lense plunging to the 100 m level and remaining open at depth as revealed by exploratory drilling by the previous owners of the Crown Leases in 1992 (see Q-Gold press release dated August 18, 2009).
Reserve estimates made by Ovalbay Geological Services Inc., in a report dated December 31, 1992 (p. 32) showed 98,702 tons grading 0.30 gold-equivalent opt in all categories (totaling 29,611 gold-equivalent ounces) attributable to previous drilling in the McKenzie Gray vein.
As a result of Q-Gold's recent drilling activity, 100 core samples from the McKenzie Gray vein are being prepared for assay, with results anticipated within 4 weeks.
JOINT VENTURE TERMS
Under the terms of the Joint Venture, in order to earn a 49% participating
interest in the prospective gold properties described above, Upper Canyon will
provide CDN$ 1.2 million in total benefits to Q-Gold over a 3-year period as
Upper Canyon Cumulative
Shares Issuable to Participating
Work Cash Q-Gold ($ value) Interest Earned
Year 1 $ 200,000 $ 50,000 $ 50,000 12.5%
Year 2 $ 275,000 $ 50,000 $ 50,000 29.0%
Year 3 $ 425,000 $ 50,000 $ 50,000 49.0%
Total $ 900,000 $ 150,000 $ 150,000
The Joint Venture will be directed by a Management Committee with Q-Gold, which retains 51% interest, as Operator for the first year.
All the properties in the Joint Venture are subject to net smelter return production royalties ranging from 2 to 3%.
Issuance of Upper Canyon shares to Q-Gold is conditional on their receiving all requisite regulatory approvals, including those of the TSX Venture Exchange.
Q-Gold President and CEO Bruce Carruthers remarked "We are pleased to welcome Upper Canyon's participation in our gold exploration efforts at Mine Centre, and look forward to a long and prosperous relationship with them.
A Qualified Person, as defined by NI 43-101, has not done sufficient work to classify the above historical estimates as current mineral resource. Consequently, Q-Gold is not treating any of these historical estimates as current mineral resources and the historical estimates should not be relied upon for any purpose.
Richard C. Beard, P.Eng, Consulting Geologist, a Qualified Person as defined by NI 43-101, has reviewed and approved the technical disclosure contained in this press release.
About Q-Gold Resources Ltd.
Q-Gold is a Canadian-based mineral exploration company currently exploring for precious and base metals and platinum group elements on its net 29,000 acres of Ontario holdings in the historic Gold Camp at Mine Centre, including 5 historic gold mines. It also has options on 4,796 exploratory acres in Ontario's Rainy River Greenstone Belt. In addition, the Corporation holds options on seven historic gold and silver mines in the historic Arizona gold camp of Crown King, and two prospective copper porphyries and one copper/zinc prospect in Arizona.
For all future Q-Gold investor relations needs, investors are asked to visit the Q-Gold IR Hub at http://www.agoracom.com/IR/Q-Gold where they can post questions and receive answers within the same day, or simply review questions and answers posted by other investors. Alternatively, investors are able to email all questions and correspondence to QAU@agoracom.com where they can also request addition to the investor email list to receive all future press releases and updates in real time.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially form the Company's expectations and projections. 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.
SOURCE Q-Gold Resources Ltd.
For further information: For further information: Corporate Inquiries, Q-Gold Resources Ltd., J. Bruce Carruthers II, President, 1-888-779-0166, http://www.qgoldresources.com; Investor Relations, AGORACOM Investor Relations, http://www.agoracom.com/IR/Q-Gold, QAU@Agoracom.com