Kenai Resources Ltd.: Trial Gold Mining Planned at Sao Chico, Brazil
02 April 2012 - 6:27PM
Marketwired Canada
Kenai Resources Ltd. (TSX VENTURE:KAI) ("Kenai") is pleased to announce that it
is planning trial mining at the Sao Chico gold project in northern Brazil
following an internal review of the recent high grade gold drill results in the
central Waldimiro Structure, underground mine planning and the results of
metallurgical testwork.
An application is being prepared and will be lodged during April for a GUIA(1)
(Guia de Utilizacao, ie trial mining use permit) licence to mine and process an
initial high grade underground tonnage. Subject to finance and permitting,
production using mechanised mining and highly selective shrinkage stoping will
commence at the maximum 50,000 underground tons of high grade gold bearing
material permitted under the GUIA in the first quarter of 2013. The high grade
gold potential of the Waldimiro Structure can be seen in the longitudinal
section in Figure 1 and from the data in Table 1.
The decision to plan for underground GUIA production also followed discussions
with a neighbouring gold project, to consider processing the high grade Sao
Chico underground tonnage at the existing mill facilities to produce gold dore.
That project is fully permitted, including tailings storage facilities. A
detailed review of available plant capacity and possible flow sheet
modifications will be required prior to a final decision being made.
Metallurgical testwork results have been received from SGS Lakefield
laboratories, from several unoxidised samples taken from the underground
Waldimiro Drive. Gold recoveries of 99% were obtained from three different
methods, ie whole ore cyanidation leaching, gravity separation and flotation,
and gravity separation and cyanidation. From 30 samples, an average in-situ
density of 2.71 tonnes per cubic meter was estimated.
Ongoing drilling at the project is also planned in conjunction with trial
mining. As fully detailed in the news release of November 29th, 2011, Kenai
believes that the Sao Chico project is highly prospective. The Sao Chico project
is located within the wider AP 12836 exploration licence covering 1,436
hectares, with the AP now held in the name of Gold Aura do Brasil Mineracao Ltda
("GOAB").
(1) A Guia de Utilizacao has a 12 month life. Application can be made for a
12 month extension. During the GUIA period a mining license application will
be prepared with the intent that this be approved at the end of the GUIA
period. Approval for the GUIA is expected to take around six months.
To view Figure 1 please visit the following link:
http://media3.marketwire.com/docs/KENMAP42.pdf
Table 1
SAO CHICO DRILLHOLE INTERCEPTS WITH ASSAY VALUES OVER 1 g/t GOLD
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Gold
Drillhole From To Interval Core Assay Interpretation of
Number meters meters meters Recovery g/t Au Structure
---------------------------------------------------------------------------
11-SC-002 38.25 40.11 1.86 100% 17.7 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-003 94.30 95.35 1.05 100% 1.03 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-004 49.10 50.30 1.20 96.0% 77.3 Waldimiro Structure
52.83 53.50 0.67 32.8% 1.07 Waldimiro Structure
splay
---------------------------------------------------------------------------
11-SC-005 142.13 143.71 1.58 98.3% 115.9 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-006 65.15 66.40 1.25 99.3% 1.07 Separate upper vein
to south
113.85 115.54 1.69 100% 1.58 Waldimiro Structure
splay
121.55 123.55 2.00 100% 13.4 Waldimiro Structure
splay
126.02 127.10 1.08 100% 4.17 Waldimiro Structure
splay
132.78 133.90 1.12 100% 115.3 Waldimiro Structure
133.90 134.93 1.03 100% 27.2 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-007 158.50 160.50 2.00 98.4% 60.1 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-009 51.00 53.00 2.00 98.2% 2.36 Separate upper vein
to south
108.60 110.60 2.00 94.4% 1.26 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-012 40.00 41.60 1.60 100% 10.8 Highway Vein
---------------------------------------------------------------------------
11-SC-013 118.85 120.35 1.50 98.4% 13.7 Highway Vein
120.35 121.77 1.42 100% 1.85 Highway Vein
---------------------------------------------------------------------------
11-SC-019 81.62 83.13 1.51 98.0% 1.06 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-021 83.94 85.25 1.31 99.6% 38.7 Separate upper vein
to south
199.75 201.66 1.91 100% 1.51 Waldimiro Structure
201.66 203.5 1.84 100% 9.41 Waldimiro Structure
---------------------------------------------------------------------------
11-SC-022 191.94 193.9 1.96 97.7% 1.06 Waldimiro Structure
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Notes:
1. For the total of 22 intercepts with assay values above 1 g/t gold, the
arithmetic average assays are 23.5 g/t gold, 16.4 g/t silver, 0.27%
lead, 0.52% zinc and 0.03% copper.
2. In terms of the currently interpreted cut-off grade (refer Note 4
below), there have been no significant gold assays recorded in the Stage
1 drill program in drillholes 11-SC-001, 003, 008, 010, 011, 014-018 and
020.
3. Intervals shown are downhole meters. All holes were drilled at
approximately 55 degrees dip to the north, except for one scissor hole
11-SC-017, drilled with a 55 degrees south declination. Azimuths are
taken from downhole surveys, as shown in Figure 2. True widths are
assessed as approximately 77% of the downhole intercepts shown.
4. Kenai's current conceptual underground mining assessment is for a cut-
off grade of 3.5 g/t gold, for highly selective shrinkage stoping
mining, in a sub-vertical 85 degrees south dipping vein structure, with
a minimum diluted mining width of 1.6 meters, assuming a gold price of
US$1500 per ounce, mineral processing recovery of 96%, and total unit
cash operating costs for an initial first year GUIA 50,000 tons per
annum operation of US$152 per tonne mined and processed.
Kenai's NI 43-101 Technical Report on the Sao Chico project is now being updated
that will include an initial mineral resource estimate for the project. Ground
based geophysics is planned in the Sao Chico project area for delineation of
additional drilling targets.
A feasibility study of the trial mining has not been completed and there is no
certainty the proposed operation will be economically viable. A PEA (Preliminary
Economic Assessment) report is being prepared for the initial 50,000 ton GUIA
trial mining operation. The PEA will consider priorities for further core
drilling to improve knowledge of the potential of the two recently discovered
high grade gold zones at the Sao Chico deposit, and the as yet untested
potential along strike and to the north of the demonstrated high grade zones.
Background to the Sao Chico, Brazil project
The Sao Chico gold project is located along a prominent NW-SE trend, the Tapajos
Gold Trend, which is the most mineralized zone within the Tapajos Mineral Field
in central-northern Brazil. The Tapajos field was the site of the biggest gold
rush in Brazilian history in the late 1970's and 1980s when approximately
500,000 garimpeiros (artisanal miners) rushed to the area to exploit extensive
areas of newly discovered alluvial gold. Approximately 20 to 30 million ounces
of gold (unofficial government figures) were produced from these operations
before the easily won alluvial gold deposits were largely depleted. The
garimpeiros have little expertise in underground mining and environmental
considerations and were thus urged by the government to consolidate their small
claims and form joint ventures with established mining companies. The area has
had little exploration by modern exploration methods compared to other
equivalent gold fields in the world.
About Kenai Resources Ltd.
Kenai is a Canadian company focused on precious mineral project exploration and
development, towards early significant gold production. In addition to the Sao
Chico gold project in Brazil, Kenai is also involved in exploration of the
wholly-owned Quartz Mountain and Hope Butte gold epithermal gold projects in
South-Eastern Oregon, both located in Malheur County, close to the Oregon border
with Idaho.
On behalf of the Board of Directors of Kenai Resources Ltd.
Greg Starr, President and CEO
Forward-Looking Statements: Statements in this release that are forward-looking
statements are subject to various risks and uncertainties concerning the
specific factors disclosed and elsewhere in the company's periodic filings with
Canadian securities regulators. The economic viabilities of the resources
estimates discussed in the release have not been established and may not be.
Such information contained herein represents management's best judgment as of
the date hereof based on information currently available. The company does not
assume the obligation to update any forward-looking statement.
Kenai's Vice President Technical Services, Neil Cole, is responsible for
technical information in this release. Mr Cole has sufficient experience which
is relevant to the style of mineralization under consideration and to the
activity which is being undertaken and planned to qualify as a Qualified Person
under NI 43-101. Mr Cole has verified the technical data disclosed in this
release, including references to planned exploration and operational activities,
and the sampling of the gold-bearing reef structures. Mr Cole has consented to
the inclusion in this release of such technical information in the form and
context in which it appears.
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