Algun Dia gold project Guanajuato, MexicoGolden Fame to option 70% of Algun Dia gold project
2011-05-18 09:48 ET - News Release
Mr. Graham Clark reports
GOLDEN FAME RESOURCES CORP. SIGNS DEFINITIVE OPTION AGREEMENT ON MEXICO GOLD PROPERTY
Golden Fame Resources Corp. has signed an option agreement to acquire up to a 70-per-cent interest in the Algun Dia gold project east of Guanajuato, Mexico, owned by Rodolfo Rodriguez Aldaco.
"Algun Dia is an advanced stage exploration project with demonstrated past economic production of gold, silver and copper mineralization. The property has well defined targets for development of significant amounts of additional similar mineralization for resumed mine production. The Company will immediately start the permitting and planning work to drive a 600 plus meter decline on the Santa Cecelia vein that will serve as both an exploration drift and facilitate future production should the Company find sufficient mineralization," comments CEO, Graham Clark.
Under the terms of the Agreement, Golden Fame has the option to earn a 70% interest in the Algun Dia project over a three-year period by making payments to Aldaco totaling $4.3 million, issuing to Aldaco 3 million common shares of Golden Fame, and expending a minimum of $6.5 million on exploration/development work on the project. The property hosts a vein structure with mineralized widths of up to 10 meters that has been mined for gold, silver and copper. Historical reports indicate that in the period 2002 through 2007, the property produced approximately 15,000 tons of ore that was processed at a mill in Guanajuato owned by Penoles Mining Company of Mexico and produced 750 tons of gold, silver and copper concentrate that was sold to an offshore smelter.
Historical reports also indicate that that there are 5 northwest trending mineralized structures that traverse the property. Golden Fame's sampling to date has confirmed mineralization along this trend for more than 2000 meters and the zone is up to 200 meters wide based on the Company's preliminary interpretation.
Prior exploration on the property includes 11 diamond core holes totaling approximately 2000 meters; two of the drill holes intersected the Santa Cecelia vein at approximately 140m down-dip from the underground workings. Records indicate that both holes encountered gold, silver and copper mineralization at grades and over widths similar to what was mined in the overlying workings. According to historical records that were not prepared in accordance with NI 43-101 and have not been verified by the Company, drill hole number AD-8 encountered 14 meters assaying 2.34 ppm Au, 120.3 ppm Ag and 1.88% Cu. Hole AD-10 drilled 16 meters assaying 1.71 ppm Au, 104 ppm Ag and 1.51% Cu. Both holes were drilled to the east northeast with the intention of crossing the northwest trending and southwest dipping structure at angles that would approach true width according to the interpretation of the geology, and Golden Fame's 2011 exploration work will place a priority on further work to define the true thickness of this mineralization.
Golden Fame has completed an initial round of geological due diligence analysis and sampling of both surface mineralization and underground workings on the property. The Company's sampling confirmed significant gold, silver and copper mineralization including an underground channel sample across a portion of the vein in the Santa Cecelia drift with 3 meters grading 9.93 ppm gold, 74.1 ppm silver, and 6890 ppm copper. The surface sampling produced a chip sample across 3 meters which assayed 65.2 ppm gold, 35.8 ppm silver, and 1890 ppm copper. Other surface samples of note included a 3-meter chip sample assaying 5.16 ppm gold, 563 ppm silver, and 9430 ppm copper.
Chalcopyrite mineralization is visible in samples from underground and on surface and Golden Fame obtained copper values as high as 2.4% in a 1.2 meter channel sample on the surface and as high as 1.98% in a channel 1 meter channel sample from underground.
The Company has commissioned Caracle Creek International Consulting, of Sudbury Ontario, to prepare a NI 43-101 compliant Technical Report on the property and that work is currently underway.
Golden Fame's minimum work expenditure for the first six months is $2 million to be completed by December 31, 2011. The 2011 exploration program will include drilling to explore for down dip and strike extensions of the productive Santa Cecelia vein, surface mapping and sampling of several other mineralized zones on the property and importantly, completing a new exploration decline on the Santa Cecelia vein.
Finalizing the Option Agreement is subject to obtaining necessary regulatory approvals, including approval of the TSX Venture Exchange.
Lawrence Dick, a director of the Company and a Qualified Person as defined in NI 43-101, supervised the preparation of the technical information in this news release.
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