| MONTREAL, QUEBEC--(Marketwire - January 19, 2010) - Uragold Bay Resources Inc. (Uragold) (TSX VENTURE:UBR), is pleased to announce that it has signed a letter of intent with a private vendor regarding the acquisition of up to 100% interest in the Beauce Placer Gold Project ("Beauce Placer") located 75km southeast of Quebec City near the town of Saint-Simon-les-Mines. The property is comprised of two irregular claims 1.1 km by 340 metres straddling the Gilbert River in the Beauce region of the Appalachians of southern Quebec.
The Beauce Placer was previously explored and mined by the Beauce Placer Company who in 1960 mentioned that ore reserve calculations done at the time indicated a potential of 12,979,000 m3 at a grade of 0.256 g/m3 of gold or 107,045 oz of gold. (i) (Seber 1961 GM11010). To mine the deposit, the company purchased a Yuba dredging machine. The four stories high, 800-ton dredge was transported in pieces from Idaho to the Beauce region using 25 train cars before being reassembled on the property. The Beauce Placer Company last mined the property in 1961 and in 1962.
Historical accounts described the dredging operation as plagued with problems. To name just a few, the large dredge was prone to frequent and expensive mechanical breakdowns; the mining method was inefficient at recovering the placer gold found on the property; and there was sabotage due to labor conflicts. The Beauce Placer Company stopped operations in 1963. Only 4,378 oz of gold was reported to have been mined on the property (Droin 2002).
Uragold's interest in the property is to review the deposit's potential with regard to using modern placer mining methods. Since the Beauce Placer Company mined only 4,378 ounces of gold from the deposit Uragold's hypothesis is that a gold resource must still exist. It is hoped that by using modern mining methods, a low cost operation can be developed to mine the remaining gold.
In addition, a 1985, drilling program on the property by Les Gisments d'Or de la Chaudiere Ltd indicated a potential deposit of a further 981,500 m3 at a grade of 0.663 g/m3 of gold or 20,000 oz of gold (i) in paleoplacer gravel near the bedrock/overburden interface 30 metres below the surface (Roche 1986 GM42988).
(i) All historical resource information presented in this press release is historical in nature and while relevant, the information was obtained before the implementation of National Instrument 43-101 and as such does not meet National Instrument 43-101 reporting standards. The historical estimates should not be relied upon until the Company can confirm them.
It is noteworthy to mention that the Beauce region was the site of Canada's first gold rush in the 1850's, decades before the Klondike. Similar to the Eastern Townships of Quebec, gold mineralization in the Beauce are found as placer (disseminated) gold in the overburden; pre-glacial (paleoplacer) gold found at the bedrock/overburden interface; and as mineralized quartz veins. Two of the largest gold nuggets found in Canada came from the Gilbert River, the Kilgour nugget at 52 ounces and the McDonald nugget at 45 ounces.
Material terms of the agreement are as follows (all amounts are expressed in Canadian dollars). In order to acquire its interest in the claims, the Corporation shall make the following payments to the vendor:
- Uragold will purchase a 50% interest in the Property by issuing to the Vendor 1,800,000 common shares of Uragold and by making a cash payment of $7,500.
- Uragold shall be the operator and manager of the operations.
- Net profits are to be divided 50/50 between Uragold and the Vendor, but this only after the net profit of the project has allowed Uragold to receive an amount equivalent to five times (5X) the funds invested in the Beauce Placer project by Uragold (exploration expenses and capital investment). The agreement also includes the payment of a 3.5% NSR royalty.
- Finally, the Corporation will have the right, but not the obligation, to acquire the remaining 50% interest in the concession from the Vendor for an undivided 100% interest in the claim, by issuing to the Vendor an additional 2,000,000 common shares of UBR. These new shares will be subject to a four-month hold period from the date of their issuance.
The transaction is made with a party that is non-related to the Corporation. The letter of intention is conditional to the approval of the Board of Directors of Uragold and the transaction is subject to approval by regulatory authorities. Further to the acquisition and its approval, the parties will proceed with the signature of a formal agreement and the titles of the claims will be transferred to the Corporation.
Note: Mr. Vivian Stuart-Williams, (SACNASP), a Director of the Company and a Qualified Person as defined by National Instrument 43-101, supervised the preparation of the information in this news release.
Bernard Tourillon, UBR Chairman and CEO comments: "the acquisition of the tailing project is part of a strategy of looking for projects that have the potential of enabling the Corporation to generate internally the funds required to develop its blue sky potential projects."
About Uragold Bay Resources Inc.
Uragold Bay Resources Inc. is a Canadian based junior resource and exploration company trading under the symbol UBR on the TSX Venture Exchange. The Company has 94,894,367 shares outstanding. The Company holds 100% of the 314 km2 Uskawanis Uranium property located just south of the Opinaca reservoir, 100% of the Blue Lake Base Metal and Gold property situated close to Radisson in the James Bay region, 100% of the "Saint-Francois and Dudswell Tertiary Gold concessions", 100% of the "Moe River Placer Gold Project" and 100% of the "Eaton North Placer Gold Project". In addition the Corporation is also staking promising projects in the eastern regions of the Province of Quebec.
Neither 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 press release contains certain "forward-looking statements," as identified in the Uragold Bay periodic filings with Canadian Securities Regulators that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. |