Newstrike Resources Announces Sale of Kirkland Lake Joint Venture and Provides Project Update
TORONTO, ONTARIO--(Marketwire - June 21, 2012) - Newstrike Resources Ltd. (TSX VENTURE:NR) ("Newstrike or the Company") announces the sale of their 50% interest in the Commodore Joint Venture ("JV") located near Kirkland Lake, Ontario to JV partner Queenston Mining Inc. ("Queenston") and provides an update on the Sweetheart property in Wyoming, USA.
Kirkland Lake JV Asset Sale
Under terms of the Commodore Purchase and Sale Agreement Queenston has paid Newstrike $450,000 cash for the Company's 50% interest in the 57 claim property located in Lebel and Gauthier Townships. As a result of the sale Queenston now owns a 100% interest in the property and Newstrike retains a 1% net smelter returns royalty ("NSR") on the 36 Egg claims and a 0.5% NSR on the original 6 Morris Mine claims.
Newstrike and Queenston formed a JV to explore the Commodore Property in 2009. The property contains 57 mineral claim units comprising 6 Morris Mine claims, 36 Egg claims, 4 Boundary claims and 11 Queenston claims. From 2009 to 2012 the joint venture completed 47 diamond drill holes on the property targeting primarily three areas of mineralization, the Commodore Zone, the Egg Zone and the Morris Mine. The results of the JV programs were not encouraging enough to recommend further exploration at this time.
Also in the Kirkland Lake area the Company maintains a 25% interest in the Swansea property with the remaining 75% interest held by Bear Lake Gold Ltd. Recently, Gold Fields Abitibi Corporation, a 100% subsidiary of Gold Fields Limited has entered into an option agreement to earn a 60% interest in Bear Lake's Cheminis, Fernland and Swansea properties by expending $40 million over a period of 5 years. Gold Fields has not assigned an expenditure to the Swansea project at this time.
Sweetheart Property, Wyoming
Funds from the Kirkland Lake JV asset sale will be used to advance exploration activity on the Company's Sweetheart property located in the vicinity of Rattlesnake Hills, Wyoming. On November 11, 2011 Newstrike entered into a binding letter of intent with Innovation Exploration Ventures LLC ("Innovation") pursuant to which the Company has been granted the option to acquire up to a 100% legal interest from Innovation in the property that comprises mining claims, leases and application comprising approximately 14,000 acres.
Four areas of interest have been outlined by Dr. Ron Marrs and Jim Davis both of Innovation on the property and have been permitted for drilling later this summer. The first is a large magnetic anomaly that is interpreted to represent a buried banded iron formation covered by Tertiary sedimentary rocks. The second area may represent a skarn target is near Granite ridge where previous prospecting trenches exposed a 40 foot wide alteration zone assaying up to 1 ounce per ton silver and 6% lead over several feet. The third area is a rare earth minerals target located 2 miles west of the Granite Ridge skarn prospect. In the western portion of the property several gold targets have been identified related to fault zones and circular magnetic anomalies.
Newstrike is an early stage exploration company with property assets located primarily in Wyoming, USA and Kirkland Lake, Ontario. The Company's strategy is to carry out exploration on their advanced properties with the purpose of defining economic deposits. Newstrike has working capital of approximately $800,000.
Newstrike's Forward Looking Statements
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Newstrike, including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of resource and reserve estimates, currency fluctuations, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.Neither the TSX Venture Exchange nor its Regulations Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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