VANCOUVER, April 17, 2012 /PRNewswire/ - Slater Mining Corporation (TSX-V: SLM) is pleased to announce that it has entered into an agreement (the "Option Agreement") pursuant to which it has acquired a three year option to purchase 100% of the West Khazret Gold Project.
West Khazret is located in the Urals Tectonic Belt in northwest Kazakhstan (see Figure 1 - Urals Belt), which is prolifically rich in both base and precious metals, extends over 2,500km and has been the major minerals production region of Russia since the 18th century. West Khazret is located 80km southwest of the mining town of Zhetygara in Kostanai Oblast. The project area covers 320km² and contains multiple mineralised systems (see Figure 2 - License Area).
"After extensive due diligence reviewing numerous projects in Kazakhstan we are very pleased to have acquired a project with the potential, scale and quality we are looking for," comments Ian Slater, Chief Executive Officer. "The opportunity at West Khazret is twofold. Initially, we will be focussed on bringing the major oxide open pit potential to account through shallow drilling and subsequent heap leach mine development. Second, there is significant exploration upside in terms of the deeper primary mineralisation and multiple other targets on the property."
The northwest trending Sineshikhan Fault represents the initial mineralised target, is 3km wide, has a strike length in excess of 16 km and extends across the border to the north into Russia where gold deposits along the structure are being exploited. The Sineshikhan gold mine, 4km to the north along strike, is reportedly currently producing approximately 80,000 ounces per year from an underground operation mining veins with an average width of 1.5m at a grade of 14 g/t Au.
Numerous historical (circa. early 1900s) open pit and underground gold mining operations are within the project area. The fault controlled mineralisation is characterised by variable width (0.3-10.0m) easterly dipping en echelon quartz veins hosted in granites and Carboniferous shales with grades of up to 75 g/t Au and 30 g/t Ag. Low grade halos of veinlets and disseminated mineralisation occur outside the high grade veins. The principal initial target is the mineralisation within the highly oxidised weathered crust to a depth of about 70m. The underlying primary mineralisation has not been significantly drilled, but a few holes to 120m and mining history to 200m depth indicates strong resource potential. To date, over twenty gold prospects have been defined within the west section of the large project area. An additional 10km² ultramafic target has been identified in the east section of the project area with surface samples of up to 30 g/t Au.
The 2009 exploration program on West Khazret by previous operators, concentrated on the Atygai prospect which was selected arbitrarily from the many mineralised occurrences within the licence area. The exploration works, which comprised hydrocore drilling (4,020m, 88 holes), trenching (1,500m in length to 3m depth, mineralised widths averaging 1.05 g/t Au) and core drilling (3,193m, 44 holes, 40-120m depth, mineralised intercepts averaging 0.86 g/t Au), have identified an oxide gold deposit which extends for approximately 1.3km with a grade and metallurgy suitable for open pit mining and conventional heap leach technology gold recovery (see Figure 3 - Drill Plan, Figure 4 - Cross Section 2, Figure 5 - Cross Section 4 and Figure 6 - Cross Section 10). Preliminary metallurgical testwork results (on a 173kg bulk sample with a grade of 0.88 g/t Au) indicate that the oxide mineralisation is amenable to cyanide heap leaching giving recoveries of greater than 75%. There are numerous conventional heap leach projects successfully operating year round in Kazakhstan. Due diligence through the re-analysis of over 200 duplicate samples has corroborated the existing data set.
A 220kV power line and roads traverse the project area with skilled labour and water readily available. A work program will commence during 2012 targeting a NI 43-101 resource and Preliminary Economic Assessment to be completed during 2013.
Numerous mines are operating in the region including privately held Cammex's Komarovskoye (reportedly 1.5 million ounces Au; annual production of 80,000 ounces Au) and Polymetal's Varvarinskoye (92 million tonnes grading 1.05 g/t Au and 0.54% cu for a total of 3.1 million ounces Au and 313 million pounds Cu resource; 2011 production of 92,000 ounces Au and 15 million pounds Cu).
Slater Mining, through its wholly-owned subsidiary, Slater Mining (Barbados) Limited ("SMB") will acquire an option (the "Option") to acquire all of the issued and outstanding common shares (the "Shares") of United Gold Plc. ("United") in consideration of a cash payment of US $2,500,000 (the "Option Acquisition Price"). United's wholly-owned Kazakh subsidiary, Geonanalitika LLP, is party to an exploration contract (the "Exploration Contract") for West Khazret.
The Option Agreement is at arm's length and is subject to TSX Venture Exchange approval. Under the terms of the Option Agreement, payment of the Option Acquisition Price by SMB is subject to (a) receipt of approval by the Ministry of Industry and New Technologies of the Republic of Kazakhstan for the transfer of the Shares to SMB on exercise of the Option, and (b) a two year extension of the term of the Exploration Contract (together, the "Conditions"). Once SMB has paid the Option Acquisition Price, SMB may exercise the Option at any time until the date that is three years after the date that SMB receives notice that the Conditions have been satisfied (the "Option Period") and acquire 100% of the Shares for aggregate cash consideration of US $3,500,000 and the granting of a 1.5% NSR. In addition, under the terms of the Option Agreement, until the earlier of the exercise of the Option and the expiry of the Option Period, SMB is required to make the minimum expenditures pursuant to the Exploration Contract of US $2,500,000 over two years.
About Slater Mining
Slater Mining is focused on acquiring and developing significant gold and copper projects in Kazakhstan. Slater Mining is associated with the Slater Group of companies, a diversified global mining group with skilled technical expertise, currently developing projects in Colombia and Canada. Management has extensive experience operating in Kazakhstan. Ian Slater, Chief Executive Officer, has worked in Kazakhstan since 1995 originally as Managing Partner of Arthur Andersen's Mining Practice. Robert Bell, Vice President Projects, has worked in Kazakhstan since 1993 on numerous projects, including developing the Mizak gold mine which is currently operated by Kazakhmys. Tim Neall, Project Geologist, has worked in Kazakhstan since 1995, most recently with Kazakhmys.
The scientific and technical information contained in this news release has been reviewed by Michael Johnson P.Geo., Vice President Exploration, who is a "Qualified Person" as defined under National Instrument 43-101.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release includes forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements. This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
SOURCE Slater Mining Corporation