Re: News Release - Thursday, May 31, 2012
Diamonds North and Uranium North Acquire Gold Projects in
Washington State
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Vancouver, BC, May 31, 2012 - Diamonds North Resource Corp. (TSX-V:
DDN) and Uranium North Resources Corp (TSX-V: UNR) ("the Companies")
announce the formation of a 50:50 strategic partnership, Minerals North
LLC, a Nevada incorporated company. The partnership allows both
companies to explore new opportunities in Washington State at reduced
cost and risk while maintaining our northern Canadian assets. The 100%
owned private company was created to acquire projects with the
potential for high grade ore deposits that allow for underground mining
and direct access to existing processing facilities.
Minerals North LLC is targeting north eastern Washington, an area where
numerous historical mines exist and due to previously depressed
commodity prices may have been overlooked. These areas have never been
explored using modern exploration techniques or geographical models.
The projects include two gold/silver leases on private land, Golden
Reward and Poland China (See terms below). The southern geographical
location, infrastructure and climate allow for year round, low cost
exploration activities and consistent news flow.
"We believe that Washington is equally as prospective as northern
Canada, however, exploration costs in Washington are estimated to be 75
to 80% less than northern Canada. Numerous high grade deposits have
been mined in Washington State and it is currently host to one of the
highest grade gold deposits being mined in the USA today. The
development of the Kinross Buckhorn Gold Mine in 2008 indicates that
Washington State is serious about mining and the door is open to this
type of investment," Says Mark Kolebaba, President and CEO of Diamonds
North Resources.
The Poland China Gold Historic Mine is located approximately 10
kilometres from the Kinross Buckhorn gold mine and less than 75
kilometres, by existing road, to the Kinross Kettle River gold
processing mill. Poland China is considered to be a sedimentary hosted
vein gold deposit. The main Kismet Vein had a mining grade of 8.2 g/T
to 12.7g/T gold. The vein averages 2.1 metres in width increasing up to
4.5 metres wide and is hosted within graphitic argillite.
Historic reports state that the Kismet vein is traceable on the surface
for a length of 750 metres and there are at least three other veins in
the area that have been partly developed, one of which was 2.6 metres
wide and traceable for 1500 metres. The mine workings cover only about
100 metres of strike length along the Kismet vein with two levels,
leaving much of the vein un-mined. Since mining at Poland China ceased
around 1940 there has been no recorded systematic and comprehensive
exploration program on the property.
Samples collected during a recent site visit yielded a sample with 26
g/T gold 3 kilometres north of the historic mine site on the property.
As well, two samples collected from the main adit returned 12.7 g/T and
15.5 g/T gold.
The 2012 initial exploration program will include detailed mapping,
ground geophysics and soil sampling to delineate the extent of the
Kismet vein and identify additional mineralized veins on the property.
The exploration work will be conducted in the context of the
sedimentary hosted vein style deposit model. This deposit style has the
potential for multi-million ounces of gold. An example of this style of
deposit is the Ballarat gold deposit in Australia with an estimated
total resource of ~20 million ounces of gold.
The Golden Reward property is located approximately 60 kilometres from
Kinross's Kettle River mill. The property hosts an epithermal gold
bearing vein system that extends across the property for more than 1
kilometre. Small scale historical mining was conducted from several
adits on and near the property. The property has had little modern
exploration with the exception of seven drill holes from three drill
sites by Kennecott in 1989-90. Two of the 7 holes steepened and failed
to intersect the target. The remaining 5 holes intersected the
mineralized structure at shallow depth. The best reported gold values
from this limited drilling campaign were 1.40 g/T gold over 8.5 metres
and 1.09 g/T gold over 9.8 metres including 2.74 g/T gold over 4.27
metres.
A grab sample collected during a recent site visit from exposed vein
material yielded 14 g/T gold; other grab samples assayed from 0.52 g/T
to 1.59g/T gold.
Golden Reward is close to drill-ready. Historic surface sampling data
indicates that in general gold values improve at lower elevations. This
target has never been adequately tested at depth. The opportunity here
is to test for high grade gold/silver zones below depths of 200 to 300
metres.
During the 2012 exploration program the detailed historic geological
map will be geo-rectified prior to outcrop sampling. A detailed
magnetic survey will be completed to better position the mineralized
structure in preparation for drilling and attempt to identify other
existing structures on the property to test.
Minerals North LLC is a 50/50 partnership and 100% of all costs
associated with Minerals North will be shared by Diamonds North and
Uranium North. Uranium North will serve as the initial project
operator.
The Terms of the Lease Agreements:
Poland China
Minerals North LLC has paid US$5,000 to access the property until
September 1, 2012, and following that, by making the following lease
payments:
i) US$15,000 on or before October 1, 2012
ii) US$25,000 on or before October 1, 2013
iii) US$30,000 on or before October 1, 2014
iv) US$35,000 on or before October 1, 2015
v) US$40,000 on or before October 1, 2016 and for each subsequent
anniversary until purchase of the property.
Minerals North LLC has the right to purchase the entire property at any
time for the greater of US$7,500,000 or 200% of fair market value of
surface rights only, excluding any value attributed to any minable
commodities that may be deliniated. The property is subject to a 3%
NSR, of which 1.0% can be purchased for US$1,000,000 and a further 1.0%
can be acquired for an additional US$2,000,000.
Golden Reward
Minerals North LLC has paid US$20,000 to access the property until
August 1, 2012, and following that, by making the following lease
payments:
i) US$25,000 on or before September 1, 2012
ii) US$30,000 on or before September 1, 2013
iii) US$40,000 on or before September 1, 2014 and each subsequent year
until 2032 or purchase of the property.
Minerals North LLC has the right to purchase the surface rights at any
time for US$8,000,000 and the property is subject to a 3% NSR, of which
Minerals North, LLC has the option to purchase one-half of the NSR
(1.5%) for US$2,000,000.
Each property has a 0.25% royalty payable to a consulting geologist.
Each royalty may be purchased at any time for the value of 300 ounces
of gold.
Washington State is a highly prospective mineral rich region steeped in
mining history. The same productive geological belts in British
Columbia extend into the state. The region has a prolific mining
history dating back to the 1800's and in the last 50 years, Washington
has produced an estimated 6 to 8 million ounces of gold, and
significant amounts of silver and copper. Over the last 25 years there
has been limited modern systematic exploration conducted in Washington.
The most recent mine development in the state is the Kinross Buckhorn
gold mine that opened in 2008 and has an estimated resource of one
million ounces gold with an average grade of 11.3g/T gold. Kinross also
operates the Kettle River gold processing mill which is currently
operating below full capacity.
Washington State is highly accessible and has well established
infrastructure. A dense network of roads provides inexpensive, easy
access. Electricity, nearby mineral processing facilities and access to
major ports and labour force all contribute to lower cost of
operations. Working in this area will allow for a much larger
percentage of our exploration resources to be allocated to our
geological efforts.
The Companies actively seeking joint venture partners for our northern
Canadian projects as they represent significant opportunity. We are
eager to initiate our exploration programs in Washington State and look
forward to reporting further developments in the coming weeks and
months.
Graham Gill P.Geo, is the Qualified Persons as defined by National
Instrument 43-101 reviewing the data in this news release. All the
Minerals North samples were completed by ALS Canada Ltd. The
historical work is from private reports and has not been verified by
the Company, however, it appears to have been completed under standard
best practices consistent with the time and appears to be of reasonable
quality.
On behalf of the Board of Directors.
Mark Kolebaba
President & CEO
