ETRUSCAN RESOURCES INC. (EET.TSX) announced today that it has concluded an option agreement with Red Back Mining Inc. (“Red Back”) to acquire a 100% interest in the Nangodi Prospecting Licence and the Bolgatanga Reconnaissance Licence (“the licences”) located in Ghana, West Africa. The licences cover 773 square kilometers contiguous with Etruscan’s land holdings in the Youga Gold Belt in Burkina Faso, where Etruscan has started construction of the 88,000 ounce per annum Youga Gold Mine. The licences include extensive gold occurrences in the Bole-Bolgatanga greenstone belt which is the southwestern extension of the Youga Gold Belt into Ghana.
The acquisition of an option on these licences is consistent with Etruscan’s aggressive exploration strategy of acquiring a dominant land position within a district scale gold belt where the potential for new discoveries is considered high. Etruscan’s land position in Burkina Faso covers an 80 kilometer strike length of the Youga Gold Belt, comprising 1,075 square kilometers which includes the Youga gold deposits and significant exploration targets at Ouaré, Nyatama, Zegoré, Bougré and Zerbogo (see accompanying map). The Ghanaian properties cover an additional 40 kilometers of strike length on the belt. Previous work carried out on the Nangodi Prospecting Licence has confirmed the presence of ore grades and widths in trenches and drill holes, most notably a drill intercept of 41 meters at 5.2 grams per tonne gold. Etruscan’s objective is to develop a stand-alone mining operation in Ghana.
The Nangodi and Bolgatanga Licences
The Nangodi and Bolgatanga licences are located 600 kilometers north of Accra in northern Ghana on the border with Burkina Faso. Infrastructure is excellent, the project area being accessible by paved road with the main power transmission line between Bolgatanga and Bawku traversing the licence areas. The town of Bolgatanga, with a population in excess of 50,000 is the capital of the Upper East Region and is situated just 12 kilometers east of the Nangodi Licence area.
Gold occurrences are well documented at a number of sites on the Nangodi Prospecting Licence and historic production dates back to the period 1934-1937. Small-scale workings focused on narrow quartz veins with limited strike length but which carried spectacular grades averaging in excess of 35 grams per tonne (maximum recorded assay of 384.5 grams per tonne).
The principal gold showings occur along a 12 kilometer shear corridor in proximity to an intrusive granitoid. More recent exploration efforts by BHP from 1992-1994 included regional stream and soil sediment surveys, limited ground geophysics and trenching. Exploration continued with Africwest from 1996-1998 which comprised more detailed soil sediment surveys, rock chip sampling, trenching and drilling. Not enough work has been done to allow for any resource estimations on the property, however, the Africwest program highlighted the potential for larger tonnage vein stockwork mineralization in addition to the historic lode vein mineralization.
Africwest completed 5,272 meters of trenching and 37 reverse circulation drill holes for 3,085 meters on Nangodi. Trench results* were highlighted by 16 meters at 1.2 g/t; 14 meters at 1.84 g/t; 8 meters at 4.2 g/t and 30 meters at 1.4 g/t. Reverse circulation drilling results* were highlighted by 41 meters at 5.2 g/t; 3 meters at 23.8 g/t; 32 meters at 3.1 g/t; 7 meters at 2.9 g/t; 15 meters at 4.6 g/t; 21 meters at 3.8 g/t; 13 meters at 2.5 g/t; 9 meters at 3.8 g/t; 12 meters at 2.4 g/t; 13 meters at 2.5 g/t and 4 meters at 6.2 g/t.
The Bolgatanga Reconnaissance Licence which was recently granted to Red Back, consolidates the strategic ground position around Nangodi and will require a more regional scale exploration program. Red Back has already compiled most of the historic data which will allow Etruscan to immediately prioritize ground targets for drilling and more detailed investigations. Etruscan has registered a wholly-owned Ghanaian subsidiary company, Etruscan Resources Ghana Limited, to carry out its exploration activities in Ghana. K. Kirk Woodman P.Geo., Etruscan's Chief Project Geologist, is the Qualified Person overseeing Etruscan's exploration programs in West Africa.
Don Burton, Vice President Exploration stated: “The acquisition of the Nangodi and Bolgatanga licences represents an important first step for Etruscan into Ghana, the second largest gold-producing country in Africa. We are extending the significant exploration experience we have gained in the Youga Gold Belt into a new country. Gold belts do not stop at borders and this is yet another example of Etruscan executing on its game plan of securing strategic land positions in the prolific gold belts of West Africa.
Etruscan has assembled a gold portfolio second to none in West Africa, with over 8,200 km2 of carefully selected ground focused on six established gold belts in five countries. We will continue with our aggressive exploration programs on these and other strategically located opportunities throughout Africa.”
Nangodi\Bolgatanga Option
Red Back has granted Etruscan the option to earn a 100% interest in the Nangodi and Bolgatanga licences, (subject to a production royalty to a maximum of US$5million) by expending US$1 million on the Licences prior to January 27, 2009, (US$250,000 of which is to be expended by January 27, 2007) and by making payments to Red Back of a total of US $300,000 during the period of the option.
The Youga Mine
The Youga Mining Permit is located approximately four kilometers north of the Ghanaian border and has an initial mineable gold reserve of 6.6 million tonnes at an average grade of 2.7 grams per tonne containing 580,000 ounces gold. The initial open pit mining operation will be comprised of five pits with the ore being processed through a conventional gravity-CIL (carbon-in-leach) plant with a design capacity of one million tonnes per annum over an initial 6.5 year mine life. Construction is scheduled to be completed in early 2007.
* IMPORTANT NOTE: trench and drill results as reported by previous operators are historic in nature and remain to be verified.
Expansion of Youga Gold Reserves Etruscan continues to evaluate other near-surface mineralized zones that can provide additional mine reserves. The current drilling program is focused entirely on the Youga Mining Permit within a 3-kilometer radius of the Youga mill site. To date, six additional mineralized zones have been identified outside of the existing mineable reserve base including the Nanga Zone, the Leduc Zone, the A2 Village Zone, the Village Tail Zone, A2 West Zones 4 & 5, and the Zegore Zone. The most advanced zone is the Nanga Zone where Etruscan has completed 4,600 meters of drilling and 1,700 meters of trenching. Continuity of gold mineralization has been confirmed over a strike length of 400 meters to a vertical depth of 60 meters. The mineralization remains open along strike and at depth. Average grades of 1 to 2 g/t over widths of 10 to 30 meters have been encountered through much of the zone. Higher grade intercepts within the Nanga Zone include 5 meters at 3.1 g/t, 13 meters at 3.9 g/t, 7 meters at 4.6 g/t and 15 meters at 7.0 g/t.
Regional exploration on the eight exploration permits surrounding the Youga Mining Permit has already identified significant target areas at Zerbogo (25 kilometers southwest of Youga), Bougre (13 kilometers southwest of Youga) and Bitou (25 kilometers northeast of Youga). Additional drill programs will be undertaken on these areas in 2006. Management believes that each of these areas has the potential for new gold discoveries.
Etruscan Resources Inc. is a diversified Canadian junior mining company focused on the development of gold properties in West Africa and diamond properties in South Africa. Etruscan has an aggressive exploration strategy and now holds strategic land positions in a number of gold belts covering over 8,200 km2 in five countries in West Africa. The Company is developing a number of gemstone quality alluvial diamond operations in South Africa and looking to expand other opportunities in southern Africa. The common shares of Etruscan are traded on The TSX Exchange under the symbol “EET”. More extensive information on Etruscan can be found on its home page at http://www.etruscan.com.
For more information from Etruscan contact: Richard Gordon, Investor Relations, email: rgordon@etruscan.com Tel: (877) 465-3674/ Fax (902)798-9702
Tony Hayes, email: thayes@etruscan.com Tel: (866) 638-3338 /Fax (905) 468-8407
This press release may contain certain forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements may include statements regarding exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, mine operating costs, production targets and timetables, future commercial production, strategic plans, market price of precious metals or other statements that are not statements of fact. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Various factors that may affect future results include, but are not limited to: fluctuations in market prices of precious metals; foreign currency exchange fluctuations; risks relating to mining exploration and development including reserve estimation and costs and timing of commercial production; requirements for additional financing; political and regulatory risks, and other risks and uncertainties described in the Company’s annual information form filed with the Canadian Securities regulators on SEDAR (www.sedar.com). Accordingly, readers should not place undue reliance on forward-looking statements.
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