Radius Gold Looks Forward to an Active 2010
VANCOUVER, Jan. 19 /PRNewswire-FirstCall/ - Radius Gold Inc. (TSX-V: RDU) is pleased to provide a review of its joint venture portfolio, potential project developments and the exploration focus for 2010. Highlights include:
- Potential cashflow from 2 gold projects under development, Tambor in
Guatemala and Pavon in Nicaragua;
- Resource definition drilling to begin at the Nueva California project
in Peru;
- Two exploration projects underway in the Yukon, with additional
targets presently being acquired;
- A growing portfolio of equity interests in partner companies and
royalties on early stage discoveries.
Simon Ridgway, the President of Radius, states: "Radius looks forward to a transformative year in 2010. We have two potential production scenarios developing from gold discoveries made by Radius's Central American team, one at Tambor in Guatemala and one at Pavon in Nicaragua. Exploration programs are planned in Peru, Nicaragua, Mexico, Guatemala and northern Canada, managed and funded by 6 different joint venture partners. We will also be conducting exploration programs on 100% owned properties in Guatemala and in the Yukon Territory. It will be an active year for the Company, and I hope a rewarding year for Radius shareholders who have shown extraordinary patience."
Below is a summary of developments, targets and holdings:
Nicaragua. B2Gold's Option: Evaluating Production from Pavon
The Company has signed the full Option Agreement with B2Gold ("B2"), initially announced in June 2009, regarding Radius's Nicaraguan project portfolio. The general terms of the agreement remain unchanged (see release 29th June 2009); the only change relates to production from the Pavon property. The previous agreement called for Radius to receive 40% of cash flow from the mining of the resource on the property. Under the full Option Agreement, Radius will be paid once B2 achieves production from Pavon, and for as long as B2 continues to produce gold from the Pavon resource property, according to a sliding scale linked to the prevailing quarterly average gold price. At the recent price range of between US$900-$1,200 / oz, Radius would receive the following payments per ounce of gold produced:
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Average Price of Gold during fiscal Production Payment to
quarter in which gold is produced Radius / oz Au
-----------------------------------------------------------------------
$900 to $999 $125.00
$1,000 to $1,099 $150.00
$1,100 to $1,199 $175.00
$1,200 to $1,299 $200.00
-----------------------------------------------------------------------
The cash payment to Radius increases by $25/oz for each $100 increment in the quarterly average gold price, and decreases by $25/oz as the average quarterly price decreases, to a lower limit of $25/oz produced if gold trades below $599/oz.
Plans for Early 2010
Work is currently underway at Pavon. B2 is conducting a detailed trenching program on the shallow, high-grade resource to confirm continuity. If this program is successful, B2 will evaluate mining scenarios for the project.
Exploration is also underway at the Trebol gold discovery in northern Nicaragua where B2 has an option to earn a 60% interest. The land position has been expanded significantly following a re-interpretation of results obtained by Radius and drilling is planned for later in the year.
Guatemala. Tambor Development Project with Kappes Cassiday: Plant Construction Underway
Radius owns a 100% interest in the Tambor gold discovery in Guatemala. Kappes Cassiday and Associates (KCA) - a Reno based engineering group- can earn a 51% interest in Tambor by putting the property into commercial production (see news release dated June 3, 2008). Radius will retain a 49% interest.
KCA is re-fabricating a modular processing plant and modular laboratory at its Reno, Nevada facility. The plant has a target capacity of 150 tonnes per day (52,500 tonnes per year) and is being assembled on a set of modular units mounted on 40-foot skids. To date, KCA has purchased the skids, a ballmill and the flotation cells. KCA expects the mill to be completed and wet-tested in Reno to facilitate rapid installation on site. Gold production is anticipated at Tambor by third quarter 2010, subject to permitting.
For a review of the history of the property, the resource and the details of the agreement with Kappes Cassiday, visit the Radius web site at www.radiusgold.com.
Mexico. Fortuna Silver Mines to drill Oaxaca Silver Project
Radius discovered silver mineralization in 2005 following a regional stream geochemical survey in various areas of the state of Oaxaca. An initial trenching program on the Tlacolula property defined a broad low grade silver/gold anomaly associated with opaline silica, indicating a high level system. In late 2009, Radius optioned the Tlacolula silver project to Fortuna Silver Mines Inc. Fortuna can earn a 60% interest by spending US$2-million on exploration, which includes a commitment to drill 1,500m within 3 years, and making staged annual payments totalling US$250,000 cash and US$250,000 in common stock over 4 years. The 12,000 hectare property is located 14km east-southeast of the city of Oaxaca and 30 km northeast of Fortuna's 100%-owned San Jose silver-gold development project.
Peru. Nueva California Option with Focus Ventures: Drilling to Start Late January 2010
Focus Ventures Ltd. is planning a second stage of drilling at the Nueva California property located 35 km north of Barrick Gold's Pierina mine, near the town of Huaraz, Peru. Permissions for drilling have been received and a resource definition drill program will commence shortly, utilizing two drill rigs. The aim of the program is two fold: define the size of the oxide bulk tonnage gold-silver resource within the 800m by 400m extent of the mine area, and ii) to test deep geophysical targets and more conceptual targets associated with a low-angle regional fault believed to underpin the known mineralization at depths of 250m to 350m
Encouraging results were received from a 400m, first-pass drill campaign which confirmed the presence of wide, potentially economic gold mineralization starting from surface (see Focus news release dated Oct. 27, 2009). Highlights of this drilling included:
- 69.6mgrading 1.84 grams per tonne (g/t) Au* and 22 g/t Ag from
surface in hole DDH-NC-003;
- 38.2mgrading 1.7 g/t Au and 20 g/t Ag from surface in hole
DDH-NC-002.
* Interval 2.70m-- 3.6m assaying 171 g/t Au was capped at 30 g/t Au for
the purposes of this calculation.
Radius holds an equity interest in Focus and a royalty on the Nueva California property, see "Equity Interests" below.
Yukon, Ten Mile Creek property
During 2009, Radius acquired by staking and under option from a local prospector, a large land package at the head waters of several active placer gold producing creeks known as the Ten Mile Creek placer camp in the Yukon. Limited historic hard rock exploration on the claims has defined significant gold/arsenic mineralization in soils and rock, hosted for the most part by strongly altered intrusive rocks and minor schists. Soils sampling has defined five broad northwesterly trending gold/arsenic anomalies with strike lengths of up to 1.6 kilometers. Limited trenching of these anomalies has produced results of 25m @ 1.6g/t Au and 19m @ 1.0 g/t Au. The location, geology, geochemistry and trench results compare favorably with recent significant gold discoveries in the area.
In September 2009 Radius optioned the property to Solomon Resources Inc. Solomon can earn a 51% interest in the property by spending $2.5-million on exploration and making staged cash and share payments totalling $500,000 cash and one million shares over three years (see Radius news release dated September 22, 2009). The exploration program for 2010 is presently under review.
Yukon. Snowcap Gold Project
Wesgold Minerals Inc. has an option to earn a 60% interest in Radius's 100% owned Snowcap project in central Yukon. Wesgold is a private B.C. company which is working towards a public listing on the TSX-V by May 1, 2010 and is currently on track to meet this schedule. In order to exercise the option, Wesgold must incur $1-million in exploration expenditures on the property and issue to Radius a total of one million Wesgold shares according to the schedule shown in the table.
----------------------------------------------------------------------
Due Date Shares Expenditures
----------------------------------------------------------------------
On signing 200,000 -
Dec. 31, 2009 - $ 100,000
On public listing of Wesgold 200,000 -
Oct. 30, 2010 200,000 200,000
Oct. 30, 2011 200,000 300,000
Oct. 30, 2012 200,000 400,000
----------------------------------------------------------------------
Totals 1,000,000 $ 1,000,000
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Wesgold has completed a low-level, high-resolution, multisensor airborne geophysical survey to map lithological units, structure, and alteration zones at Snowcap at a cost of $110,000. Target/anomaly selection is currently underway incorporating the results of this survey with the historic data.
Wesgold has also carried out a small deep soil sampling program to confirm and enhance gold and mercury soil anomalies identified in the 1980s. The anomalies occur close to a complex sequence of chalcedonic tuffs and phreatic breccias with sinter clasts associated with Tertiary felsic volcanic centres along a 15-kilom-long structural trend. Both Radius and Wesgold consider the known geological and geochemical setting as highly favourable for the location of low-sulphidation, structurally controlled, epithermal gold mineralization.
Equity Interests
Radius holds a growing portfolio of equity stakes in its partner companies. As of mid-January 2010, the Company held:
- 1-million shares of Focus Ventures (January 18 closing price $1.33)
- 500,000 shares of Solomon Resources (January 18 closing price $0.28)
- 200,000 shares of Wesgold Minerals, a private company scheduled to
IPO by mid-2010
- 7,813 shares of Fortuna Silver Mines (January 18 closing price $2.79)
Qualified Person
David Cass, Radius's Vice-President of Exploration, is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and is the Company's qualified person as defined by National Instrument 43-101. Mr. Cass is responsible for the accuracy of the technical information in this news release.
ON BEHALF OF THE BOARD
"Simon Ridgway"
Simon Ridgway, President
Investor relations: Ralph Rushton / Erin Ostrom
Symbol: TSXV-RDU; OTCBB-RDUFF
Shares Issued: 53.5-million
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
SOURCE Radius Gold Inc.
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