Wolf Wiese, CEO of Golden Dawn Minerals Inc., (OTC: GDMRF) (TSX-V: GOM) (the "Company" or "Golden Dawn") announces that the Company has signed a non-binding LOI with Advanced Mineral Technology Inc. (the "Vendor"), who owns 100% of the issued and outstanding common shares of BGP Resources Inc. ("BGP" and the "BGP Shares").
Golden Dawn is acquiring the Lone Star Property through the acquisition of BGP Resources Ltd., a private Washington State corporation which holds 100% interest in the Lone Star Property subject to a 2.5% NSR. In consideration and subject to Regulatory Approval, the Company will pay the Vendor $200,000 in cash and $200,000 in common shares at a price to be determined by the average trading price of the Company's common shares on the TSX Venture Exchange prior to the announcement of the Letter of Intent.
The Lone Star Property is contiguous to the Company's Greenwood Precious Metals Project located in the Greenwood Mining District, 500 km east of Vancouver, B.C. on Highway #3. The Company's 100% owned processing facility is 17 km to the north of Lone Star. The 234 hectare Lone Star copper-gold property, composed of a series of patented lode claims and private mineral claims in northern Washington State, lies adjacent to the southern boundary of Golden Dawn's advanced stage Lexington Property.
The geology, both in rock types and structure, as well as the accompanying gold-copper mineralization on the Lexington Property continues south onto the Lone Star Property, forming a 3 kilometre long prospective exploration trend of past producing gold-copper mines and prospects, including Lexington-Grenoble, Lexington, No. 7 and Lone Star Mines. The past producing Lone Star Mine operated over two time periods; from 1897-1918 producing 146,540 tonnes, and from 1977-1978 by Granby Mining Co. where they trucked over 400,000 tonnes from the Lone Star open pit to its Phoenix mill.
Numerous exploration companies saw additional copper-gold potential on the property, post-Granby. Exploration across the Lone Star Property to date includes 252 diamond and percussion drill holes for a total of 23,702 metres of drilling. Most recently, in 2006, Merit Mining Corp. (Merit) conducted a diamond drilling program adjacent to the Lone Star open pit and interpreted a series of eight shallow to moderately dipping en echelon and overlapping copper-gold zones hosted within a dacitic and minor serpentinite unit, very similar to the Lexington-Grenoble Mine. Zones are composed of sheeted and stockwork pyrite-chalcopyrite veins, veinlets and disseminations carrying gold. Many zones in the Lone Star deposit remain open and untested to fully define their extent.
An historic resource estimate exists for the Lone Star deposit. In 2007, Merit commissioned P&E Mining Consultants Inc. ("P&E") to prepare an NI 43-101 mineral resource. Three dimensional (3-D) modeling methods and parameters were employed in accordance with principles accepted in Canada. A wireframed geological model was created from drillhole logs and interpretations supplied by Merit and audited and accepted by P&E. Statistical and grade continuity analyses were completed by P&E to characterize the mineralization and subsequently used to develop grade interpolation parameters. Gemcom modeling software was used for establishing the 3-D block model and subsequent grade estimates. Grade capping was used to restrict the influence of statistical outliers during Inverse Distance Squared (1/d2) application of block grades. An interpolated density model was generated by P&E from data measurements collected by Merit. On September 23, 2007, Merit reported a resource estimate as follows:
2007 Lone Star Resource Estimate
(cut-off grade: 1.5% Cu (CuEq) or 5.0 g Au/t equivalent AuEq)
|Classification||Tonnes||Au (g/t)||Cu (%)||Au Eq (g/t)||Cu Eq (%)||Au (oz)||Cu (million lbs.)|
( P&E Mining Consultants Inc.; effective date 23 September, 2007 )
- Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
- The quantity and grade of reported inferred resources in this estimation are conceptual in nature.
- The mineral resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
- Gold equivalent grade (Au Eq) was calculated using a gold price of US$593/oz and copper price of US$2.84/lb., based on the 24 month (at July 31, 2007) trailing average of gold and copper prices, to obtain a conversion factor of % copper x 3.284 + gold g/t = Au Eq g/t. Metallurgical recoveries and smelting/refining costs were not factored into the gold equivalent calculation.
- The Cu equivalent cut-off value of 1.5% was calculated and rounded utilizing the following: Cu price US$2.84/lb, $US exchange rate $0.88, process recovery $95%, smelter payable 95%, smelting and refining charges C$7/tonne mined, mining cost C$62/tonne mined, process cost $C28/tonne processed, G&A cost $7.50/tonne processed.
A qualified person has not done sufficient work to classify the historic estimate as current mineral resources or mineral reserves. As such the issuer, Golden Dawn, is not treating this historical estimate as current mineral resources or mineral reserves.
Technical disclosure in this news release has been approved by Dr. Mathew Ball, P.Geo., a Qualified Person as defined by National Instrument 43-101, and Chief Operating Officer of the Company.
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