Redstar Gold Corp. (TSX VENTURE:RGC) and Confederation Minerals Ltd. (TSX VENTURE:CFM) has announced that Redstar and Confederation have signed an agreement, whereby Confederation can earn an interest in Redstar's Newman Todd gold project in Red Lake, Ontario.
Under the terms of the agreement Confederation has an option to earn an initial 50% interest in the project by funding $5.0 million in exploration expenditures, issuing to Redstar 500,000 shares of Confederation, and making $250,000 in cash payments over a three year period. After Confederation earns their initial interest, they have a second option to earn an additional 20% interest in the property, by issuing 500,000 shares to Redstar and funding a Preliminary Economic Assessment (PEA) on or before the sixth anniversary of this agreement. Work commitment in the first year of the agreement includes $2.0 million in exploration expenditures with drilling planned to begin in early 2011.
Scott Weekes, President, Redstar, stated, "We are extremely pleased to have signed this agreement with Confederation, which will guarantee an aggressive drill program on the Newman Todd project early in 2011. Our past work has defined a gold bearing structure exceeding 2 km (the Newman Todd Structural Zone), with narrow steeply dipping high-grade veins. Recent drilling by Hy Lake Resources - near the boundary of the Newman Todd property - confirms the continuation of the structure 800 metres north of Redstar's most northerly drilling. Red Lake is one of the best known, high-grade gold camps in the world, with deposits extending to depths of over 2000 metres. Only about 40% of the 2.0 kilometre long strike extent of the Newman Todd Structural Zone has been tested with three gold zones currently identified and only tested to around 200 metres below surface. We are excited to have a partner that is eager to aggressively drill to extend the strike of the Newman Todd Structural Zone and also drill to test the depth potential that remains wide open."
Mr. Lawrence Dick, Ph.D., P.Geo and President of Confederation, stated: "We are delighted to have joined with Redstar, to continue the successful exploration to advance the high-potential Newman Todd gold project in the Red Lake District. Our objective is to expand the Red Lake-style gold mineralization discovered on Redstar's Newman Todd project, located in a geological setting similar to that of the famous Red Lake gold deposits. The tenor of the gold results from recent drilling, which reach very high grades locally, bode well for the future of the project. We plan a drill- intensive program to add to the highly-favourable results obtained to date, beginning this winter."
Previous work by Redstar on the Newman Todd property has outlined gold mineralization within a silicified breccia zone that can be traced for at least two kilometres. High-grade gold mineralization, within the Newman Todd Structural Zone, is associated with quartz veining, silicification, sulphide and magnetite replacement of intensely iron carbonate altered breccias zones. Drilling done by Redstar has intersected values up to 61.20 g/t gold over 1.0 metre within a wider zone of 67.0 metres of 1.76 g/t gold in previous drill programs. The property has a very similar geologic setting to many of the major mines in the Red Lake camp, such as Goldcorp's Campbell and Red Lake mines. Similarities include; large Fe-carbonate and silica alteration zones, proximity to a major structure, secondary northwest-southeast trending structures, and proximity to a folded ultramafic body.
Bob Singh, P. Geo., a qualified person as defined by National Instrument 43-101, has reviewed this news release. Bob Singh is the Canadian Exploration Manager for Redstar Gold Corp.
Source: Redstar Gold Corp.