TORONTO, ONTARIO--(Marketwire - July 22, 2008) - NFX GOLD INC. (TSX VENTURE:
NFX-
News;"NFX" or the "Company") is pleased to announce that Newstrike Resources Ltd. ("Newstrike") has decided to terminate its option to earn an additional 25% interest in the Swansea Property located along the Larder Lake break in northeastern Ontario. The Swansea Property is owned 75% by NFX and 25% by Newstrike. Newstrike's 25% interest is subject to an aggregate 6.25% net proceeds of production royalty up to a maximum of $275,000.
On September 13, 2007, a letter agreement (the "Agreement") was executed between the companies granting Newstrike the option to earn an additional 25% interest in the Swansea Property from NFX by completing exploration expenditures totaling $1,000,000 within 2 years and issuing an aggregate of 100,000 Newstrike common shares to NFX over a two year period. A total of 50,000 Newstrike shares were issued to NFX pursuant to the Agreement.
A drilling report recently received by NFX, along with formal notice by Newstrike of termination of its option according to the Agreement, provides results from a total of five (5) diamond drill holes completed by Newstrike on the Swansea Property in late 2007. Three of the five holes, namely NR07-01, 02, and 04, were drilled at the western end of the property and drilled south to north to cross-section the near east-west striking mafic to ultramafic volcanic horizons that occur along the Larder Lake break. These mafic to ultramafic volcanic horizons are known to host significant gold deposits like the Kerr Addison, Chesterville, Armistice, Cheminis, Fernland and Omega deposits, with the latter located only 3.7 km to the east.
Hole NR07-01, the most southern of the 3 cross-sectional holes intersected 2 mafic-ultramafic volcanic horizons, one of which displayed weak green carbonate alteration with minor quartz and weak pyrite and included one sample grading 1.85 gpt(1) over 0.3 m.
Hole NR07-02 continued the cross-section northward to investigate the volcanic horizon hosting the Omega deposit along strike. The hole encountered 2 mafic-ultramafic horizons one of which was weakly altered with green carbonate but yielded no significant gold values.
Hole NR07-04 was drilled to continue the cross-section northward testing beneath a prominent outcrop of strongly carbonatized and silicified ultramafic volcanic rock. The hole intersected an 80m wide zone of the altered ultramafic which contained 5 brown silicified weakly pyritized dikes, possibly albitite. Albitite dikes were a noted and important host rock for high grade gold mineralization within the volcanic horizons at the Kerr Addison Mine. A second previously unknown horizon of highly fractured unaltered ultramafic volcanics was intersected immediately north further down hole NR07-04.
The fourth hole NR07-03 was drilled northwest beneath Diamond Lake from its east shore and intersected two ultramafic volcanic horizons displaying little alteration and mineralization.
Hole NR07-05 was drilled 1,200 meters east of the other holes in an area where historic drill hole SW87-04 completed by Eldor Resources in 1987 reportedly(3) intersected 0.30 opt(2) Au (10.3 gpt Au) over 6.1 m in "quartz flooded fuchsitic tuff". The intersection occurs at a vertical depth of 300 m within the same volcanic horizon that hosted the Omega deposit located 2.5 km to the east. Follow-up drilling by Noranda with hole 92-7 located on the same section and 150m below the SW-87-4 intersection encountered 4.6 meters of altered volcanic hyaloclastite with 10% pyrite but only low gold values. Hole NR07-05 was drilled 150 m west and 200m south of historic hole SW-87-4 and encountered the same succession of rocks including an upper volcanic package that yielded 0.5 gpt Au over 2 m and a lower volcanic package yielding 0.5 gpt Au over 0.5 m.
Thomas Larsen, President and Chairman of NFX Gold Inc. stated, "Normally we would be disappointed by the termination of the option however, in this case, NFX is pleased to retain its entire 75% interest in the Swansea Property. We believe the Swansea project's full gold potential will be realized under the new business arrangement proposed by NFX Gold Inc. and Maximus Ventures Ltd." The new business arrangement proposed by the companies is outlined in a letter agreement that was announced in a June 13, 2008 press release and following Maximus's anticipated $6M earn-in on NFX's Larder Lake Project will see the assets of the two companies, including the Swansea Property, merged into a new single entity.
Thomas Larsen further stated, "While the drilling program completed by Newstrike did not yield any gold values of economic interest, we believe the results are encouraging and further confirm the NFX-Maximus exploration model extends westward from the Larder Lake Project onto the Swansea property. The intersection of six favourable host volcanic horizons in the cross-sectional drilling at the west end of the Swansea property of which some demonstrate the presence of albitite dikes, strong alteration, mineralization, and low grade gold is just the sort of environment we are looking to explore down-plunge at depths below 300 m as we are currently doing with success at the Bear Lake gold zones of the Larder Lake project on-strike. Hole NR07-05 located 150 m west and 200 m south of the historic high grade intersection in hole SW-87-4 was not positioned on the typical steep easterly plunge demonstrated by the other deposits in the area and we believe this zone may have significant exploration potential. We look forward to continuing exploration on the Swansea project under our new business arrangement with Maximus."
(1) gpt is the grade in grams per tonne Au
(2) opt is the grade in ounces per ton Au
(3) Report dated June 25, 1987 titled "Report on the Swansea Property,
Ontario" prepared for Eldor Resources by Derry, Michener, Booth and
Wahl.
This release contains certain "forward-looking statements". All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, are forward-looking statements. Forward-looking statements reflect the current internal projections, expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties, including those detailed from time to time in filings made by the Company with securities regulatory authorities, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.