NEWS completes Cuff Lake acquisition
Forest Gate Energy completes Cuff Lake acquisition
Ticker Symbol: C:FGE
Forest Gate Energy completes Cuff Lake acquisition
Forest Gate Energy Inc(C:FGE)
Shares Issued 83,275,630
Last Close11/1/2011
.045
Wednesday November 02 2011 - News Release
Mr. Michael Judson reports
FOREST GATE CLOSES CUFF LAKE IRON PROPERTY ACQUISITION
Forest Gate Energy Inc.'s mineral group has completed its acquisition ofthe Cuff Lake iron property located in the Abitibi region of Quebec,approximately 160 kilometres southeast of Val d'Or and 145 kilometressouth of Forest Gate's Pershing iron property.
As a result of the transaction Forest Gate owns a 100% interest in amineralized iron-bearing land package consisting of 151 contiguousmining claims extending in an east-west direction over a distance of 16kilometres (10 miles). The property is accessible by road and highwayand is close to additional infrastructure and an experienced,indigenous workforce. This represents the second iron propertyacquisition that the mineral group has made in 12 months.
"Cuff Lake iron is a strategic acquisition for the mineral explorationside of this company's business," said Michael Judson, Forest Gate'sPresident & CEO. "The acquisition of an iron property located in theAbitibi region of Quebec is an obvious synergistic fit with our 100percent-owned Pershing iron property, which is located withinreasonable proximity."
Judson says the company will start its exploration program at Cuff Lakepossibly as early as December 2011 by flying an aeromagnetic survey."We could be drilling the property this winter," said Judson. "And wemay be able to finish 2012 with resource estimates on both Cuff Lakeand Pershing."
As previously disclosed in a news release dated October 3, 2011, theproperty known as Cuff Lake has a non-43-101-compliant historical "openpit mineable reserve of 20,071,000 tons of magnetite ore grading 17.4%soluble iron" (source: Expo Iron Ltd. report, December 13, 1971) and anadditional potential resource of approximately 180 million tonnes ofsimilar quality magnetite-rich mineralization (source: Fenton Scott2010 internal reports) that was geologically inferred on the basis ofwidely separated holes and magnetometer data.
Forest Gate Energy emphasizes that they have made no effort yet toreclassify the historic estimates of resources as currentresources. These estimates therefore should not be treated as currentresource estimates nor should they be relied upon. Furthermore,because no recent work has been done to evaluate the economics of thedeposit, there is no guarantee that the quoted historic "reserve"figure is potentially economic. Economic studies done in 1970 do notmean the mineralized iron deposit would be found to be economic today.
Historical reports on the property have estimated a wide range of totalpotential tonnage of iron mineralization that varies from 110 milliontons (short) to 268 million tons depending on depth and width used tocalculate the volume for each deposit. An extensive drilling programwill be required to verify these calculations. In accordance with NI43-10, Sec 2.3 (2), the reader is cautioned that the estimate of thepotential quantity and grade for the deposit is conceptual in natureand that there has not been sufficient exploration in this instance todefine a mineral resource nor is there certainty that furtherexploration will delineate the target as a mineral resource.
The historical reports indicated that iron rich bands form severalmagnetite-rich locations each varying from 1.5 to 2 kilometres (5,000 -6,500 feet) in length, 61metres (200 feet) to 152 metres (500 feet) inwidth, with an average 91metres (300 feet), and having down dipextensions greater than 250 metres. The magnetite-rich bands trendapproximately east-west and dip at 45o to 55 o toward the north.
Metallurgical testing by Expo Iron Ltd (internal report August 1, 1970)indicated that the iron-bearing mineralized rock crushed to minus tenmesh and treated on a dry magnetic drum would retain 34.7% of theground material, 99.1% of which was magnetite and which assayed 44.2%soluble iron. These concentrates continued to contain high sulphur(3.74%). (Subsequent metallurgical tests at Lakefield Researchlaboratory reported that this sulphur content could be reduced to 0.50%by milling processing. See details below)
"Beneficiation tests conducted at Aerofall Mills Limited in Clarkson,Ontario, using 53-ton representative bulk sample, have adequatelydemonstrated the ability to produce a coarse, dry, pre-concentrate byautogenous grinding and low-intensity magnetic separationtechniques." Finer grinding to minus 150 mesh produced magneticconcentrate having higher grades (64% soluble iron).
"Grade of these pre-concentrates was 63-64% soluble iron. Tests toproduce superconcentrates were followed at Lakefield ResearchLaboratory in Lakefield, Ontario. Re-grinding to 70-75% minus 325 meshand wet magnetic separation resulted in the production ofsuperconcentrates grading 70.76% soluble iron, 0.96% silica, 0.50%sulphur, 0.008% phosphorus, 0.008% titanium and 0.20% manganese."
Forest Gate Energy Inc. has not undertaken any recent metallurgicaltests to verify the quoted metallurgical results. All metallurgicalresults quoted above are historic in nature and taken from an Expo IronLtd report dated August 1, 1970
The historic 1971 Assessment Report for Expo Iron Ltd states that 17,048 feet of diamond drilling had been completed on the property. Theiron mineralization is covered by approximately 10 metres of overburdenmaking it amenable to open pit mining methods.
Historically quoted resources at Cuff Lake were based on a review ofhistorical work reports that used data drawn from surface sampling,diamond drilling, ground and airborne magnetometer surveys. Forest Gatehas not completed any work on the property.
"The Cuff Lake project which is approximately 160 kilometressouth-southwest of the Pershing iron showing is a highly complimentaryacquisition for Forest Gate," said Michael Judson, President of ForestGate. "The successful development of the Cuff Lake iron project willenhance the overall economics of developing Pershing iron in theheartland of Quebec."
"Iron ore projects in Abitibi Region of Quebec will benefit greatly fromthe existence of well-established infrastructure and proximity toexisting railroads. As an example, a rail line operated by CN runsthrough Senneterre (40 kilometres north-northwest from Pershing) andconnects directly to the deep-water port at Quebec City. This greatlydifferentiates the capital costs of our prospects from those located inmore remote locations," said Judson.
In consideration of the acquisition, Forest Gate paid the vendor $50,000in cash. Forest Gate will pay the vendor an additional $50,000 onOctober 31, 2012. The vendor holds a 2% Net Smelter Royalty; onepercent of this royalty can be purchased by Forest Gate for $3 million.Forest Gate will also have a Right of First Refusal in the event theroyalty holder elects to sell the remaining one percent royalty.
A finder's fee in the amount of $10,000 ($4,000 in cash and $6,000 inForest Gate common shares at
.06) was paid to a consultant.
New video on website:
Please visit the company website (www.forestgate.ca) to view management's recent visit to the Cuff Lake Property.Technical information in this news release was prepared in accordancewith Canadian regulatory requirements as set out in National Instrument43-101 and has been reviewed by Edward Procyshyn, Geo, who is thequalified person as defined by NI 43-101. About Forest Gate
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© 2011 Canjex Publishing Ltd.