NewsMAY 16, 2007 - 07:00 ET
Canstar Resources Receives Results for Sunday Lake Drilling; Update on the Mary March Property
TORONTO, ONTARIO--(CCNMatthews - May 16, 2007) - The Directors of Canstar Resources Inc. (TSX VENTURE:ROX) are pleased to announce that assays have been received for the recently completed Sunday Lake drilling program near Thunder Bay, Ontario. The program, which consisted of two holes totaling 484 metres, intersected a significant zone of alteration believed to represent a halo surrounding the interpreted intrusive body. Unfortunately, no intrusive rocks were encountered in the drilling, however, intense zones of oxidized and epidotized metasediments, containing abundant magnetite, were observed directly over the distinct magnetic feature targeted by the drilling.
Whole rock geochemistry suggests that the fluids responsible contained significant iron, magnesium and titanium, and indicate a potential mafic or ultramafic source. Mafic-ultramfic complexes are economically significant and host the potential for large tonnage deposits of nickel, copper and cobalt, as well as platinum group elements.
The drilling program was successful in advancing our knowledge of this previously untested area and the results will be used to design future exploration programs.
Mary March Update
The Mines and Energy branch of the Newfoundland and Labrador Department of Natural Resources has advised Canstar that all of the necessary documents are now being filed for the appeal (Vinland Resources Limited) and cross-appeal (Phelps Dodge Corporation-Canstar Resources) of the Supreme Court of Newfoundland's 2006 ruling. We are currently waiting for the date of the appeal to be set, and expect things to move forward more quickly from this point. Given the importance of Mary March to the Company, we are determined to take a more proactive role in resolving the issue as well as providing more regular updates to our shareholders, who have showed remarkable patience and loyalty during this protracted dispute.
In July 2006 the Supreme Court overturned the decision of the Mineral Rights Adjudication Board, which had previously favoured Vinland Resources, after determining that the original Board decision improperly placed the burden of proof on the Mineral Claims Recorder, had applied an incorrect standard of proof and had failed to address the evidence before it. The matter was ordered to be reheard by a different panel, in accordance with the guidelines in the judgment.
Vinland filed notice of appeal in August 2006 and Phelps Dodge-Canstar responded with a cross appeal asking that Vinland's claim be dismissed without a rehearing. It is important to note that Vinland's appeal contains no new arguments to their case.
The dispute stems from a ruling handed down December 17, 2003, by the Mineral Rights Adjudication Board against the Province and titleholders. On January 8, 2004, the Province filed an appeal on behalf of the Mineral Claims Recorder before the Supreme Court of Newfoundland and Labrador, which resulted in the 2006 Supreme Court decision.
The Mary March property is held by the Canstar-Phelps Dodge Corporation of Canada Joint Venture. Pursuant to the agreement, Canstar has the right to earn 50% interest in the property plus first refusal rights on the remaining 50%. Located in central Newfoundland, 20 kilometers northeast of, and within the same geological group that hosts the prolific former producing Buchans mine, the Mary March deposit was discovered by Phelps Dodge in 1999. Diamond drilling produced some of the highest grade base and precious metal intersections (9.2m @ 10.33% Zn, 1.62% Pb, 0.66% Cu, 118.1g/t Ag and 4.1 g/t Au) ever achieved in the area outside the Buchans mine. Following a favourable outcome of the dispute, Canstar will immediately begin a drilling program to further define the mineralized zone.
Canstar's shares trade on the TSX Venture Exchange under the symbol ROX.
David Palmer, Ph.D., P.Geo, is the qualified person for all technical information in this release. To find out more about Canstar Resources, visit our website at www.canstarresources.com.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of Canstar, are forward-looking statements that involve various 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. Important factors that could cause actual results to differ materially from Canstar's expectations are exploration risks detailed herein and from time to time in the filings made by Canstar with securities regulators.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.