Forest Gate Acquiring Iron Property in Abitibi Region of Quebec
02 Oktober 2011 - 1:24AM
PR Newswire (Canada)
SYMBOL & EXCHANGE: FGE-V CALGARY, Oct. 3, 2011 /CNW Telbec/ -
Forest Gate Energy Inc. reports that its mineral group is in the
process of acquiring an iron bearing-property in the Abitibi region
of Quebec, approximately 160 kilometres southeast of Val d'Or and
145 kilometres south of the Pershing Iron property. The property
known as Cuff Lake has a non-43-101-compliant historical "open pit
mineable reserve of 20,071,000 tons of magnetite ore grading 17.4%
soluble iron" (source: Expo Iron Ltd. report, December 13, 1971)
and an additional potential resource of approximately 180 million
tonnes of similar quality magnetite-rich mineralization (source:
Fenton Scott 2010 internal reports) that was geologically inferred
on the basis of widely separated holes and magnetometer data.
Forest Gate Energy emphasizes that they have made no effort yet to
reclassify the historic estimates of resources as current
resources. These estimates therefore should not be treated as
current resource estimates nor should they be relied upon.
Furthermore, because no recent work has been done to evaluate the
economics of the deposit, there is no guarantee that the quoted
historic "reserve" figure is potentially economic. Economic
studies done in 1970 do not mean the mineralized iron deposit would
be found to be economic today. Historical reports on the property
have estimated a wide range of total potential tonnage of iron
mineralization that varies from 110 million tons (short) to 268
million tons depending on depth and width used to calculate the
volume for each deposit. An extensive drilling program will
be required to verify these calculations. In accordance with
NI 43-10, Sec 2.3 (2), the reader is cautioned that the estimate of
the potential quantity and grade for the deposit is conceptual in
nature and that there has not been sufficient exploration in this
instance to define a mineral resource nor is there certainty that
further exploration will delineate the target as a mineral
resource. The historical reports indicated that iron rich bands
form several magnetite-rich locations each varying from 1.5 to 2
kilometres (5,000 - 6,500 feet) in length, 61metres (200 feet) to
152 metres (500 feet) in width, with an average 91metres (300
feet), and having down dip extensions greater than 250 metres. The
magnetite-rich bands trend approximately east-west and dip at 45(o)
to 55( o )toward the north. The mineralized iron-bearing land
package consists of 150 contiguous mining claims and extends in an
east-west direction over a distance of 16 kilometres (10 miles).
Metallurgical testing by Expo Iron Ltd (internal report August 1,
1970) indicated that the iron-bearing mineralized rock crushed to
minus ten mesh and treated on a dry magnetic drum would retain
34.7% of the ground material, 99.1% of which was magnetite and
which assayed 44.2% soluble iron. These concentrates continued to
contain high sulphur (3.74%). "Beneficiation tests conducted at
Aerofall Mills Limited in Clarkson, Ontario, using 53-ton
representative bulk sample, have adequately demonstrated the
ability to produce a coarse, dry, pre-concentrate by autogenous
grinding and low-intensity magnetic separation techniques."
Finer grinding to minus 150 mesh produced magnetic concentrate
having higher grades (64% soluble iron). "Grade of these
pre-concentrates was 63-64% soluble iron. Tests to produce
superconcentrates were followed at Lakefield Research Laboratory in
Lakefield, Ontario. Re-grinding to 70-75% minus 325 mesh and wet
magnetic separation resulted in the production of superconcentrates
grading 70.76% soluble iron, 0.96% silica, 0.50% sulphur, 0.008%
phosphorus, 0.008% titanium and 0.20% manganese." Forest Gate
Energy Inc. has not undertaken any recent metallurgical tests to
verify the quoted metallurgical results. All metallurgical
results quoted above are historic in nature and taken from an Expo
Iron Ltd report dated August 1, 1970 The historic 1971 Assessment
Report for Expo Iron Ltd states that 17, 048 feet of diamond
drilling had been completed on the property. The iron
mineralization is covered by approximately 10 metres of overburden
making it amenable to open pit mining methods. Historically quoted
resources at Cuff Lake were based on a review of historical work
reports that used data drawn from surface sampling, diamond
drilling, ground and airborne magnetometer surveys. Forest
Gate has not completed any work on the property. In consideration
of the acquisition, Forest Gate will pay the vendor $50,000 in cash
at closing, which is expected be no later than October 31, 2011.
Forest Gate will pay the vendor an additional $50,000 12 months
from now on October 31, 2012. As well, the vendor will hold a 2%
Net Smelter Royalty; one percent of this royalty can be purchased
by Forest Gate for $3 million. Forest Gate will also have a Right
of First Refusal in the event the royalty holder elects to sell the
remaining one percent royalty. "The Cuff Lake project which is
approximately 150 kilometres south-southwest of the Pershing iron
showing is a highly complimentary acquisition for Forest Gate,"
said Michael Judson, President of Forest Gate. "The successful
development of the Cuff Lake iron project will enhance the overall
economics of developing Pershing iron in the heartland of Quebec."
"Iron ore projects in Abitibi Region of Quebec will benefit greatly
from the existence of well-established infrastructure and proximity
to existing railroads. As an example, a rail line operated by CN
runs through Senneterre (40 kilometres north-northwest from
Pershing) and connects directly to the deep-water port at Quebec
City. This greatly differentiates the capital costs of our
prospects from those located in more remote locations," said
Judson. Closing of the transaction is scheduled to take place on or
before October 31, 2011. A finder's fee in the amount of $10,000
($4000 in cash and $6000 in Forest Gate common shares at
$0.06) will be paid to a consultant upon closing. Technical
information in this news release was prepared in accordance with
Canadian regulatory requirements as set out in National Instrument
43-101 and has been reviewed by Edward Procyshyn, Geo, who is the
qualified person as defined by NI 43-101. About Forest Gate
Forest Gate Energy Inc. is a publicly listed oil and gas
exploration and production, and non-energy resource company trading
on the TSX Venture Exchange under the symbol FGE. The Company is
seeking to increase shareholder value through participation and
development of energy and other resources in Canada and
internationally. FORWARD-LOOKING STATEMENTS Certain statements
regarding Forest Gate, including management's assessments of future
plans and operations and Forest Gate's anticipated financial
performance, may constitute forward-looking statements under
applicable securities laws and necessarily involve known and
unknown risks and uncertainties, most of which are beyond Forest
Gate's control. These risks may cause actual financial and
operating results, performance, levels of activity and achievements
to differ materially from those expressed in, or implied by, such
forward-looking statements. Such factors include, but are not
limited to: the impact of general economic conditions in Canada and
the United States; industry conditions including changes in laws
and regulations including adoption of new environmental laws and
regulations, and changes in how they are interpreted and enforced;
competition; the lack of availability of qualified personnel;
fluctuations in commodity prices; the results of exploration and
development drilling and related activities; imprecision in reserve
estimates; the production and growth potential of Forest Gate's
various assets; fluctuations in foreign exchange or interest rates;
the ability to access sufficient capital from internal and external
sources; and obtaining required approvals of regulatory
authorities. Neither TSX Venture Exchange nor its Regulation
Service Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
the accuracy of this release. FOREST GATE ENERGY INC. CONTACT:
ROBERT KRAMBERGER, V-P, INVESTOR
RELATIONS1-866-666-3040RKRAMBERGER@FORESTGATE.CAWWW.FORESTGATE.CA
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