Acadian to buy 50% of 6179053 Canada for $1.06-milAcadian to buy 50% of 6179053 Canada for $1.06-million
Acadian Mining Corp (C:ADA)
Shares Issued 142,312,907
Last Close 5/28/2008 $0.63
Thursday May 29 2008 - News Release
Mr. William Felderhof reports
ACADIAN MINING CORPORATION ANNOUNCES PROPOSED ACQUISITION OF INTEREST IN FIFTEEN MILE STREAM GOLD PROPERTY
Acadian Mining Corp. has entered into an agreement pursuant to which it, or its nominee, will acquire 50 per cent of the outstanding shares of 6179053 Canada Inc. as well as a shareholder's loan in the amount of $68,745 for a total purchase price of $1,068,745. 6179053's only asset is the Fifteen Mile Stream gold property which comprises two exploration licences and one special licence which cover 39 contiguous mineral claims totalling 631.5 hectares (1,560 acres) in Halifax county, Nova Scotia, Canada. The closing is scheduled for May 30, 2008. The vendors of the shares and the loan are not related parties of Acadian. Thirty-five per cent of the shares will continue to be held by G. William Felderhof, a director and president and chief executive officer of Acadian, and the remaining 15 per cent by other parties unrelated to Acadian.
The Fifteen Mile Stream property hosts the Egerton-MacLean gold deposit and is strategically located on the regional scale Moose River -- Fifteen Mile Stream anti-clinal structure that is host to three advanced-exploration-stage-to-development-stage bulk tonnage gold deposits. These are, in addition to the Egerton-MacLean deposit, the Touquoy deposit being developed by ASX listed Atlantic Gold Ltd., which recently received environmental approval, and Acadian's Beaver Dam deposit located 18 kilometres to the southwest and which is currently the subject of a scoping study.
Mineral exploration programs carried out during the period 1985 to 1989 by former operators at Fifteen Mile Stream have resulted in the diamond drilling of 136 NQ drill holes totalling 26,630 metres. The database generated by this work is now the basis of a National Instrument 43-101-compliant technical report and an inferred resource estimate completed on the Egerton-MacLean deposit located in the central portion of the Fifteen Mile Stream property in November, 2007, by Hudgtec Consulting Ltd. on behalf of 6179053 (table entitled "Inferred resources for Seigel and Orient zones").
INFERRED RESOURCES FOR SEIGEL AND ORIENT ZONES Cut-off Tonnes Gold Gold(gold g/t) (g/t) (oz)0.00 6,539,650 1.11 233,3340.50 4,897,425 1.39 218,8410.70 3,796,650 1.66 202,3840.80 3,441,100 1.75 193,8311.00 2,764,775 1.91 169,484 Two-metre downhole composites in mineralized domains cut to 17 g/t Au.Unsampled ((tilde) 25 per cent) intervals in resource allocated at zero grade.Screen metallic fire assays represent (tilde) 66 per cent of samples used inresource estimate.Standard fire assays represent (tilde) 34 per cent of samples used in resourceestimate.
Approximately 75 per cent of the resource ounces as estimated by Hudgtec and based on a one-gram-per-tonne (g/t) cut-off are located within 110 metres of surface.
Hudgtec considers the grade estimate of the resource to be conservative due to a number of factors, including the cutting of high-grade values (two-metre composites cut to 17 g/t gold (Au)), the inclusion of previously unsampled core intervals at zero grade in the model and incomplete analyses on all previously sample intervals by the preferred screen metallics procedure (66 per cent).
The gold mineralization at Fifteen Mile Stream occurs as both coarse, nuggety gold in quartz veins and as disseminated to nuggety gold in mudstone host rocks. These zones exhibit weak-to-strong alteration in the form of carbonatization, sericitization, silicification and chloritization and are generally enriched in sulphide mineralization. The two gold-mineralized mudstone units of particular interest, the Seigel and Orient mudstones, have been structurally thickened in the Egerton-MacLean area. In this area, the gold-mineralized Seigel and Orient mudstones occupy the hinge zone and flanks of an east-striking, shallow-plunging, overturned (north), complex anti-clinal structure that has been extensively faulted and sheared. The thickness of the gold-mineralized Seigel and Orient mudstones ranges between 10 metres and 100 metres, and averages approximately 30 metres. The inferred resource as presently defined occurs over a strike length of 400 metres.
The bulk tonnage potential of the Egerton-MacLean deposit, with final boundaries yet to be determined, is underlined by the wide intervals of gold mineralization highlighted in the table entitled "Drill highlights." In addition, while coarse, nuggety gold is characteristic of the quartz-vein-hosted gold, the obvious contribution of the disseminated gold in the mudstone units is highlighted in drill hole 87-022 in the table entitled "Drill hole 87-022."
DRILL HIGHLIGHTS Hole From To Int. Gold Gold (m) (m) (m) (g/t) (g/t) (*) (xx) (xxx)86-005 88.69 107.32 18.63 5.57 3.2686-008 43.01 150.25 107.24 0.99 0.9987-022 119.00 153.02 34.02 2.23 2.2387-024 49.41 152.00 102.59 1.41 1.4187-042 109.63 135.00 25.37 10.15 3.5187-044 39.07 142.00 102.93 1.46 1.4687-049 77.35 139.10 61.75 2.33 2.3388-107 103.21 142.50 39.29 2.43 2.38 (*) equals approximate true width.(xx) equals uncut, weighted average grade of intercept withunsampled intervals at zero grade.(xxx) equals cut (17 g/t over two metres), weighted average grade ofintercept with unsampled intervals at zero grade.
DRILL HOLE 87-022 From To Int. Gold(m) (m) (m)(*) (g/t)119.00 120.00 1.00 1.74120.00 121.00 1.00 0.64121.00 122.00 1.00 0.76122.00 123.00 1.00 0.49123.00 124.00 1.00 3.30124.00 125.00 1.00 3.10125.00 126.00 1.00 0.87126.00 127.00 1.00 1.21127.00 128.00 1.00 0.50128.00 129.00 1.00 0.20129.00 130.00 1.00 2.65130.00 131.00 1.00 3.14131.00 132.00 1.00 1.40132.00 133.00 1.00 1.72133.00 134.00 1.00 1.24134.00 135.00 1.00 2.26135.00 136.00 1.00 4.53136.00 137.00 1.00 6.49137.00 138.00 1.00 3.34138.00 139.00 1.00 2.39139.00 140.00 1.00 1.88140.00 141.00 1.00 3.94141.00 142.00 1.00 1.30142.00 143.00 1.00 2.58143.00 144.00 1.00 4.54144.00 145.00 1.00 10.60145.00 146.00 1.00 0.74146.00 147.00 1.00 0.45147.00 148.00 1.00 0.83148.00 149.00 1.00 0.25149.00 150.00 1.00 1.05150.00 151.00 1.00 2.32151.00 152.00 1.00 1.42152.00 153.02 1.02 1.82 Sparsely drilled, highly prospective gold-mineralized zones contiguous orin proximity to the Egerton-MacLean inferred resource include:1. The Eastern Orient Nose area where drill hole 85-013 intersected30.42 metres grading 1.64 g/t gold (including 17 per cent of intervalunsampled at zero grade) from 39.81 metres;2. The Seigel open-cut and fault areas to the southwest where drillhole 85-009 intersected 45.3 metres grading 0.64 g/t gold (77 per cent ofinterval not sampled and included at zero grade, including10.29 metres of old workings also at zero grade) from 8.56 metres andwhere drill hole 87-052 intersected 10.06 metres grading1.26 g/t gold from 65.74 metres (most of drill hole above thisinterval is unsampled);3. The Hudson to Egerton MacLean area, a sparsely drilled,700-metre-long area just west of the deposit where drill holes88-055 and 88-058 returned 2.5 g/t over 3.03 metres from88.67 metres and 3.06 g/t over 6.23 metres from 72.55 metres,respectively, near the projected trace of the Seigel fault.
In addition, two other sparsely drilled areas have been identified within the Fifteen Mile Stream property that are characterized by disseminated mudstone and quartz-vein-hosted, nuggety-style gold mineralization in mudstone. These are:
- The Hudson area 700 metres to the west where drill hole 85-019 intersected 13.2 metres grading 1.95 g/t gold from 39.38 metres and another 10.55 metres at 1.16 g/t gold from 60.29 metres (these intervals 57 per cent and 44 per cent sampled, respectively);
- The 149 East area 1,300 metres to the east where drill holes 88-083 and 88-094 intersected 11.85 metres grading 0.82 g/t gold from 55 metres and 20.85 metres grading 0.69 g/t gold from 286.15 metres, respectively.
The total highly prospective strike length covered by the 6179053 property is four kilometres, however, Acadian controls an additional 21,368 hectares of mineral claims covering approximately 48 kilometres of the favourable regional structure on trend with Fifteen Mile Stream and Beaver Dam.
Management opinion
Will Felderhof, president and chief executive officer, stated: "Fifteen Mile Stream exhibits some exceptional technical attributes and may well prove to be the top gold property in Nova Scotia. This acquisition is an obvious fit with Acadian's gold properties given its proximity to the Beaver Dam gold property and the excellent potential for resource growth. There are tremendous synergies with two or more potential open-pittable, bulk tonnage gold deposits, Beaver Dam and Egerton-MacLean, within a distance of only 18 kilometres."
Resource estimation parameters
Inferred resource estimation was completed in the Egerton-MacLean area where broad intervals of near-surface, anomalous-grade-to-low-grade gold values show reasonable continuity within the sheared and altered Seigel and Orient mudstone units.
Resource estimation was performed using Gemcom Surpac and the following methodologies were employed during the estimation procedure:
- Anomalous-grade-to-low-grade gold zones interpreted and wireframe modelled within the Seigel and Orient mudstone domains on 25-metre drill sections over a strike length of (tilde) 400 metres to a vertical depth of (tilde) 210 metres;
- Fifty intercepts from 39 drill holes were modelled to form the Seigel domain while 13 intercepts from 13 drill holes were used for modelling the Orient domain;
- Two-metre downhole composites calculated within wireframed domains and statistically evaluated for top-cut analysis (17 g/t Au). Missing intervals assigned zero grade in composite calculations;
- A five-metre-cubed block model produced in Surpac covering mineralized domains in three dimensions;
- Gold grades interpolated into blocks constrained by Seigel and Orient domains using inverse-distance-squared (ID2) methodology with primary-search ellipse directions oriented parallel to main directions of apparent geological control to the mineralization;
- Tonnage/gold grades at various cut-offs within domains estimated from block model using a specific gravity factor of 2.60 to convert volumes to metric tonnes.
Assays were completed by Chemlab Inc., Bondar-Clegg Ltd., Chimitec Ltd. and ALS Chemex Ltd.
Plan of arrangement
As disclosed in Acadian's news release 05-08 in Stockwatch on April 18, 2008, Acadian intends to "spin out" its gold assets to a new public company, Annapolis Gold Corp., pursuant to a statutory plan of arrangement.
The arrangement will result in shareholders of Acadian receiving one share of Annapolis for every four shares of Acadian they hold on the distribution date and Annapolis will own all of the spin-out assets, including Acadian's four advanced-stage exploration properties (Beaver Dam, Tangier, Forest Hill and Goldenville), which form the core holdings of the Scotia goldfields project. It is intended that Acadian's interest in 6179053 will be included in the spin-out assets, although Annapolis will be responsible to reimburse Acadian for the purchase price.
If the arrangement proceeds, Acadian shareholders will continue to hold all the same number of Acadian shares they owned before the arrangement, and Acadian will continue to own the Scotia mine operations together with all of the company's extensive base-metal claim holdings, including the Getty deposit, the Smithfield deposit currently under option, the Eastville prospect, the Lake Ainslie barite-fluorite deposits and its 44.42-per-cent interest in Royal Roads Corp. Acadian will continue to be managed by its existing management team and Acadian will provide administrative and operational services to Annapolis with such additional staff as may be required. The officers and directors of Annapolis will initially be the same as those for Acadian.
The arrangement is subject to a number of conditions, including receipt of all necessary shareholder, court and regulatory approvals. Assuming all conditions are met and the arrangement proceeds, it is anticipated that the "effective date" will occur in late June, 2008.
As announced in Acadian's news release 07-08 in Stockwatch on May 26, 2008, Annapolis has entered into an agreement with Desjardins Securities Inc. pursuant to which Desjardins has been appointed lead agent of a syndicate including Canaccord Capital Corp. as co-lead, Bieber Securities Inc., Fraser MacKenzie, Integral Wealth Securities Ltd. and Acadian Securities Inc. as syndicate members, in connection with a marketed private placement of up to 20 million units of Annapolis at $1 per unit. Each unit will consist of one common share of Annapolis and one-half of one common share purchase warrant of Annapolis. One whole warrant will entitle the holder to subscribe for one common share at $1.20 at anytime prior to the date that is 18 months from the closing of the offering. The offering is anticipated to close on the effective date of the arrangement.
Qualified person
A. Bruce Hudgins, PGeo, author of the technical report, is an independent qualified person as that term is defined in National Instrument 43-101, and has reviewed and approved the technical contents of this news release.
) 2008 Canjex Publishing Ltd.