Radius Signs Option to Acquire the Rubi Gold-Silver Property, Peru
Tuesday, August 28 2007 - 9:15
VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 08/28/07 -- Simon Ridgway, President of Radius Gold Inc. (TSX VENTURE: RDU)(OTCBB: RDUFF), is pleased to announce that the Company's Peruvian subsidiary, Radius Peru S.A.C., has signed an option agreement to acquire 100% of the Rubi gold-silver property located some 400 km south-east of Lima, and 16 km east of the town of Puquio, Department of Ayacucho in south-central Peru.
The claims lie within a northwest trending belt of Neogene-age volcanic rocks that hosts several producing precious metal mines.
The property, which comprises seven mineral concessions totaling 3,000 hectares, covers a 9 km long north-south corridor where gold and silver-bearing veins outcrop within three broad areas called the San Andres, Virgen de Chapi and Minas Rubi areas. Historically the Spanish mined high-grade veins in all three areas, and more recently local informal miners have mined small tonnages of gold and silver ore. No drilling or modern exploration is known to have been carried out on the claims. A location map and description of the project will be available shortly on the Radius website - www.radiusgold.com.
On the Minas Rubi property, located in the southern part of the claims, a series of oxidized epithermal quartz-carbonate Au-Ag veins and breccias are hosted within porphyritic andesites. The veins outcrop on a low hill approximately 1 km x 0.5 km in area, with mineralization traceable at least 1 km to the north. Surface pits and shallow underground workings are extensive, with numerous veins and at least three vein trends evident with individual veins at surface reaching widths of over 4m. Surface channel sampling of veins by Radius returned assays ranging from trace to 20.8 g/t Au and 356 g/t Ag over 2m, and 3 g/t Au and 373 g/t Ag over 3.9m.
At Virgen de Chapi, some 6 km north of Minas Rubi, a bonanza-grade Au-Ag vein system is evidenced from surface and underground workings. Channel sampling of veins in surface outcrops gave assays from trace up to 52.5 g/t Au and 843 g/t Ag over 0.8m. A grab sample of high grade stockpiled quartz-sulphide ore from underground workings assayed 556 g/t Au (18 oz/t Au) and 1,205 g/t Ag (39 oz/t Ag).
In the San Andres area, 1.5 km to the north of Virgen de Chapi, surface and underground workings along the Esperanza-Espanola vein have exposed bonanza precious metal grades over narrow widths. Two channel samples taken by Radius in underground workings assayed 25.6 g/t Au, 932 g/t Ag over 1.0m, and 9.1 g/t Au, 450 g/t Ag over 0.9m. A 1.6m channel sample across the same vein at surface assayed 15.8 g/t and 299 g/t Ag, with a grab sample taken from an ore stockpile from the same vein assaying 119 g/t Au and 939 g/t Ag. The Esperanza-Espanola vein can be traced on surface for +1 kilometer. At Chirulin, some 400m north of the Esperanza-Espanola vein, mineralization as veins and vein breccias up to several metres wide is exposed in surface and underground workings. Two underground channel samples assayed 6.2 g/t Au and 433 g/t Ag over 1.25m, and 5.4 g/t Au, and 649 g/t Ag taken over 0.9m. The veins at San Andres and Virgen de Chapi do not generally outcrop as prominent features on surface and therefore the exploration for blind veins under cover will be an important target for exploration. The 5 km corridor between the Rubi and Virgen de Chapi areas contains known mineralized outcrops and is an additional target for exploration.
Prior to the commencement of exploration activities, Radius will be consulting and working with the local communities in the area to ensure support for the exploration activities.
Terms of the Agreement
Under an agreement with Exploraciones Andinas S.A.C. ("Andinas"), a private Peruvian company, Radius can purchase 100% of the property by incurring exploration expenditures of US$1.75 million and making staged cash payments to Andinas of US$1.65 million and 450,000 shares in Radius over three years, with US$100,000 and 50,000 shares paid on signing. Radius will then have the option to purchase the claims outright by paying $4 million by the fourth anniversary, with the vendor retaining a 1.5% NSR. Additional reserves defined after this payment will be subject to a $5/oz gold equivalent payment to the vendor. Finder's fees of $10,000 and 25,000 shares each are payable to two individuals in connection with the project.
The acquisition marks Radius's first project in Peru, a country where numerous mines have been discovered and developed since dramatic improvements were made in the mining law in early 1990's. Peru is the world's biggest silver producer, third largest copper and fifth largest gold producer, and continues to provide an attractive investment climate for foreign mining and exploration companies. Radius recently established an exploration office in Lima, and is actively reviewing opportunities within the country, in line with Radius's strategy of developing a portfolio of quality precious metal projects in Central and South America.
Assay Protocol & Qualified Person
All sample preparation and analyses were conducted by ALS Chemex Labs in Lima. Samples were analyzed for Au, using a 30 gram pulp with Fire Assay and AAS with gravimetric finish for samples over 10 g/t Au. Silver was analyzed by ICP, with AAS for samples over 100 g/t Ag.
The information in this release was prepared under the supervision of Mr. Gregory Smith, a member of the Association of Professional Engineers and Geoscientists of British Columbia, and the Company's "Qualified Person" in accordance with National Instrument 43-101.
ON BEHALF OF THE BOARD
Simon Ridgway, President
Shares Issued: 53.3-million
The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release.
Contacts:
Radius Gold Inc.
Ralph Rushton
Investor Relations
Toll Free: 1-888-627-9378 or (604) 801-5432
Radius Gold Inc.
Erin Ostrom
Investor Relations
Toll Free: 1-888-627-9378 or (604) 801-5432
(604) 662-8829 (FAX)
Email: info@radiusgold.com
Website: www.radiusgold.com
