MacDonald Mines Enters Option/Joint Venture Agreement with Virginia Mines on Gold Property in Northern Quebec
MacDonald Mines Exploration Ltd. (TSX Venture:BMK) ("MacDonald” or the "Company") announces the signing of an option/Joint Venture agreement with Virginia Mines Inc. (TSX:VGQ) (“Virginia”) on the Assinica Property located in the Frotet –Evans (James Bay) region of Quebec, about 100 km northwest of Chibougamau.
As per the agreement and subject to Exchange approval, MacDonald Mines has the option to acquire a 50% interest in the Assinica property, in consideration of CA$2.5 million in exploration work to be carried out during the next four (4) years, and cash payments totalling $130,000. MacDonald and Virginia will manage the project by committee with Virginia being the operator.
Property Located in an Extensive Volcano-Sedimentary Belt
The property covers a land position of 79 claims covering almost 41 km² and is hosted by an extensive volcano-sedimentary belt that also hosts Inmet Mining’s Troilus gold-copper mine which has been in production since 1997. It overlaps a major lithological contact between the volcanic rocks of the Assinica Group and the sediments of the Broadback Group.
Property Covers Many Gold and Arsenic Anomalies
Virginia initially staked the property based on lake sediment and till sampling carried out by the Quebec Government. The area displays anomalies in gold, arsenic and tungsten. Virginia subsequently completed additional till sampling that was subjected to a heavy media separation which was scanned for gold grains. In one area as many as 67 gold grains were detected in one sample with 50 of these being pristine, indicating that they had undergone very limited distances of glacial transportation. Several IP anomalies remain unexplained within this favourable auriferous context.
Kirk McKinnon, President and Chief Executive Officer of MacDonald states, “Because of MacDonald management’s strong working relationship with Virginia Mines, we were presented with this opportunity. After carefully assessing the project and with the strong recommendation from our Senior Consultant, Bill Nielsen P.Geo., we decided to move forward. This opportunity, while extremely compelling, will not require significant expenditures to advance exploration.”
An exploration program is planned for the summer of 2009 to test these anomalies. Work will include additional geochemical sampling, geophysics, prospecting and mechanical stripping. It is anticipated that a drill program will be initiated before the end of the year in order to test targets generated by the exploration work completed to date.
MacDonald will have the option of providing supplementary personnel to Virginia’s exploration team. Virginia’s exploration group has extensive gold exploration experience and was responsible for the discovery of the Éléonore gold deposit located to the north of the Assinica Property.
MacDonald Mines has reached an agreement to issue common shares in lieu of cash consideration to two consultants aggregating $53,950 priced at $0.25 per share for a total of 215,800 common shares. The completion of the shares for debt settlement is subject to the approval of the TSX Venture Exchange. Shares issued will be subject to a 4 month plus one day hold period.
Virginia is among the most active mining exploration companies in Quebec with a working capital of $38.6 million as at November 30, 2008, and 29,201,776 shares issued and outstanding as at April 30, 2009. Virginia trades on the Toronto Stock Exchange (TSX) under the ticker symbol VGQ. Virginia concentrates its activities on its numerous properties that are spread over the vast, underexplored regions of northern Quebec.
About MacDonald Mines
MacDonald Mines is a mineral exploration company with an established history in the exploration of gold and base metals. MacDonald has set upon a strategic direction of exploration in the Canadian Northlands, with particular focus in Ontario, Saskatchewan and Quebec.
In 2008, MacDonald Mines was ranked second in the TSX Venture 50’s Annual Ranking of Top Canadian Mining Companies and trades under the symbol BMK.
For more information, please contact
(416) 364-2753 (FAX)
Vice President, Business Development
J. A. Kirk McKinnon
President & CEO
Chief Operating Officer & CFO
WARNING: The statements made in this news release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from expectations and projections set out herein.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.