North American Gold to initiate exploration at Norra and Barsele Properties
North American Gold Inc. (NAU) is pleased to announce its due diligence review of the Norra and Barsele properties in northern Sweden has concluded. The review underscored the excellent exploration potential of the properties and North American is initiating a detailed exploration program, to include both drilling and geophysics.
Norra and Barsele are located at the intersection of two producing gold belts; the well-known Skellefteå gold-rich volcanogenic massive sulfide (VMS) belt - which hosts the Boliden deposit (3.9 million ounces of gold produced at an average grade of 15 g/t Au) - and the emerging Gold Line trend which hosts intrusion-related gold-only mineralization (including Dragon Mining's new Svartliden mine with a resource of 2.62 Mt grading 4.80 g/t Au for 403,000 ounces and Lappland Gold's Faboliden deposit of 15 Mt grading 1.43 g/t Au for 687,000 ounces).
The Norra concessions contain two Skellefteå-style VMS occurrences. In 2003, drilling at the Norra zone returned 11 g/t Au, 91 g/t Ag, 3.5% Cu, and 3.7% Zn over 8 meters (see news release January 26, 2004). The zone is open to the northwest, and a recent geophysical survey has identified magnetic and conductive anomalies coincident with the projected strike of known mineralization. This untested anomaly is a high priority target for North American's 2004 drill program.
The Barsele concessions contain five known gold occurrences closely related to a northwest-southeast trending intrusive belt. The most advanced occurrences are the orogenic-style Avan, Central and Skirasen zones. Recent drilling at the Central zone intersected 71 meters grading 1.7 g/t Au and another hole of 69 meters grading 1.6 g/t Au (see news release January 26, 2004). A resource for the Central and Skirasen zones of 9.5 Mt grading 1.8 g/t gold for 540,000 ounces was calculated by Williams Resources in 1999. This resource calculation is not NI 43-101 compliant, has not been verified by North American Gold, should not be relied on, and is presented for disclosure purposes only. Both zones are open at depth, along strike to the northwest and to the southeast, and the geometry of the mineralized zones appears suitable for bulk mining.
Metallurgical studies on intrusive-hosted gold mineralization at the Central Zone, completed by Anamet Services in England, report that 92% of the gold is non-refractory, and direct cyanidation of samples yielded gold dissolutions of 85 to 92%. NAU will be reviewing the existing resource calculation in compliance with NI 43-101, carrying out additional metallurgical studies, and drilling to expand the known resource and test new targets.
The seven known mineralized zones at the Norra and Barsele concessions form a distinctive northwest-trending belt closely coinciding with a 1.8 Ga island arc environment. NAU's interpretation of the geological setting and origin of the two styles of mineralization suggests they are a continuum of gold rich deposits that range from intrusive hosted and mesothermal mineralization to exhalative VMS and epithermal mineralization. This is consistent with other deposits in both the Skellefteå district and GoldLine trend.
NAU is impressed with the potential of these properties and is pleased to have access, via the joint venture, to the strong Swedish technical and commercial experience of Minmet's senior management. Accordingly, David J. Hall has been appointed a director of NAU. Mr. Hall holds a Master of Science degree in Mineral Exploration from Queen's University, and has carried out exploration programs in more than 40 countries with AngloAmerican, Minorco, AngloGold, and Minmet. Mr. Hall's experience and contacts in Swedish exploration and mining activities will be of great benefit to NAU's operations.
NAU also welcomes K. Brent Cook as a technical adviser to the Board. Based in San Diego, Mr. Cook has worked as a geologist and exploration analyst for the past 25 years in 50 countries worldwide. Most recently, he was the principal Mining and Exploration Analyst with Global Resource Investments, the foremost retail brokerage firm in the USA focused on junior natural resource related investments.
NAU has the right to acquire a 60% interest in both the Barsele and Norra properties from Minmet (Dublin: MNT.L). To earn its 60% interest, NAU will spend US$1.5 million on the Norra concessions by November 3, 2006 and issue 200,000 shares, and spend US$2.0 million on the Barsele concessions by November 3, 2006 and issue 200,000 shares to Minmet.
NAU is seeking joint venture partners to advance its 100% owned Empy porphyry-style copper-gold and Brik epithermal gold properties in Nevada, and Sixtymile epithermal gold property in Yukon to allow it to focus its efforts at Norra and Barsele. The option on the Gold Springs property has been dropped following poor results obtained in six drill holes totaling 971 meters.
On behalf of the Board of Directors,
NORTH AMERICAN GOLD INC.