Duncastle Gold Corp. ("Duncastle") (TSX VENTURE:DUN)(FRANKFURT:5D3)
announced today that it has signed a letter of understanding with
Mineral Mountain Resources Ltd ("Mineral Mountain") (TSX
VENTURE:MMV)(OTCQX:MNRLF) to acquire up to 100% of Mineral
Mountain's Pipestone Project 60 kilometers northeast of Fort
Frances in Northwest Ontario for shares, cash payments and
exploration work commitments.
The Pipestone project consists of a large 344 square kilometer
land position which is highly prospective for both high-grade and
bulk-tonnage style gold mineralizing systems similar to that found
at the nearby Rainy River (Rainy River Resources Ltd), Hammond Reef
(Osisko Mining Corporation) and Cameron Lake (Coventry Resources
Ltd) gold deposits.
The project is situated in a prime location at the junction of
the Pipestone-Manitou Stretch Deformation Zone and the
Helena-Pipestone Deformation Zone of which the latter can
ultimately be traced for over 55 kilometers to the same geological
setting that hosts the Rainy River gold deposit (4.41 Moz Au M+I).
The Pipestone-Manitou Stretch Deformation Zone and its associated
splays remain vastly underexplored and contain several drill ready
and earlier stage gold targets including neighboring exploration
projects at Manitou Gold's Gaffney Extension property and Kesselrun
Resource's Bluffpoint property.
Previous work on the Pipestone project by Mineral Mountain
Resources has returned numerous surface gold occurrences and
mineralized drill intercepts throughout the property including a
coherent, shallowly dipping zone of disseminated gold
mineralization within the Lawrence Lake Batholith at the Pine
Centre prospect.
Nelson Baker, President and CEO of Mineral Mountain commented:
"We are delighted to have Duncastle Gold, with the Manex Resource
Group and their strong team of explorers, continue the search for a
large gold resource in this regionally complex greenstone
belt".
President Michael Rowley commented: "Duncastle is very pleased
with the option to acquire 100% of the Pipestone project as our
second and most significant acquisition in Ontario to date. We
believe that the property has true multi-million ounce gold
potential based on the regional metallogeny, and a clear initial
target for drill follow-up at the Pine Centre prospect with
potential for significant expansion along strike and down dip. In
addition there are numerous other targets in several geological
settings throughout the very large property. The location is
excellent and access by existing roads is year-round."
Under the terms of the letter of understanding, Duncastle can
acquire an undivided 100% right, title and interest in the project
upon completion of cash payments in the aggregate amount of
$300,000, issuances of an aggregate 2,000,000 common shares in the
capital of Duncastle, and minimum exploration expenditures on the
property in the aggregate amount of $4,000,000, in accordance with
the following schedule.
To earn an initial 60% interest, Duncastle must:
-- Issue 250,000 shares upon TSX Venture Exchange ("Exchange") acceptance;
-- Pay $35,000 upon completion of a non-flow-through private placement;
-- Pay $50,000, issue 250,000 shares, and complete $500,000 in exploration
expenditures on or before the first anniversary of Exchange acceptance;
-- Pay $50,000, issue 250,000 shares, and complete a further $500,000 in
exploration expenditures on or before the second anniversary of Exchange
acceptance; and
-- Pay $65,000, issue 250,000 shares, and complete a further $500,000 in
exploration expenditures on or before the third anniversary of Exchange
acceptance.
To earn a further 40% interest (for an aggregate 100% interest),
Duncastle will pay $100,000, issue 1,000,000 shares, and complete a
further $2.5 million in exploration expenditures on or before the
fifth anniversary of Exchange acceptance.
Mineral Mountain will retain a 2% net smelter return royalty
("NSR") on claims which are not already subject to royalties.
Duncastle shall have the right to purchase one half of Mineral
Mountain's NSR (thus reducing it to 1%) at any time for a payment
of $1,000,000.
Duncastle and Mineral Mountain acknowledge existing royalties on
certain claims in the Pipestone package including a 3% NSR payable
on certain claims with an option to buy down to 1% for $1,000,000
per 1%, and a 2% NSR payable on certain other claims with the
option to purchase one half (thus reducing it to 1%) for a payment
of $1,000,000.
The letter of understanding, and the issuance of shares
thereunder, are subject to Exchange acceptance on behalf of
Duncastle.
About Duncastle Gold
Duncastle Gold Corp. is a Vancouver-based gold exploration
company with mineral claims covering or surrounding past producing
mines in British Columbia and, recently, in Ontario, Canada. In
addition to the newly acquired high-grade gold projects in Ontario
and the past-producing Yankee-Dundee Mine in southeast BC,
Duncastle holds a 100% interest in the highly prospective
polymetallic Porphyry Creek project in northwest BC including a
copper-molybdenum porphyry system announced December 2010.
As part of the Manex Resource Group, Duncastle benefits from
shared expertise in corporate finance, public company
administration, investor relations, and technical and geological
services provided for seven public companies active in North
America. Since its formation in 1997, the Manex Group companies
have raised over C$350 million in exploration financing.
Rob Macdonald, (P.Geo.), is the Qualified Person responsible for
reviewing the technical results in this release.
About Mineral Mountain
Mineral Mountain is focused on the exploration and, if
warranted, development of the Holy Terror Project in the Keystone
mining district in the southeastern part of the Black Hills of
South Dakota, U.S.A. The Keystone district contains historic gold
mines, eight of which occur within the Holy Terror Project, that
targeted Early Proterozoic gold mineralization associated with iron
formations and shear zones similar to the deposits at the Homestake
gold mine.
Nelson Baker, (P.Eng.), is the Qualified Person responsible for
reviewing the technical results in this release on behalf of
Mineral Mountain Resources Ltd.
On behalf of the Board of Directors of Mineral Mountain
Resources Ltd.,
Nelson W. Baker, President and CEO, Mineral Mountain Resources
Ltd.
On behalf of the Board of Directors of Duncastle Gold Corp.,
Michael Rowley, President, Director, Duncastle Gold Corp.
This News Release may contain forward-looking statements
including but not limited to comments regarding the timing and
content of upcoming work programs, geological interpretations,
receipt of property titles, potential mineral recovery processes,
etc. Forward-looking statements address future events and
conditions and therefore involve inherent risks and uncertainties.
Actual results may differ materially from those currently
anticipated in such statements. These statements are based on a
number of assumptions, including, but not limited to, assumptions
regarding general economic conditions, interest rates, commodity
markets, regulatory and governmental approvals for the company's
projects, and the availability of financing for the company's
development projects on reasonable terms. Factors that could cause
actual results to differ materially from those in forward looking
statements include market prices, exploitation and exploration
successes, the timing and receipt of government and regulatory
approvals, and continued availability of capital and financing and
general economic, market or business conditions. Mineral Mountain
Resources Ltd and Duncastle Gold Corp. do not assume any obligation
to update or revise its forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent required by applicable law.
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.
Contacts: Mineral Mountain Resources Ltd. Brad Baker Director
and Vice-President Corporate Development
778.383.3975bbaker@mineralmtn.com www.mineralmtn.com Duncastle Gold
Corp. Michael Rowley President 1.888.456.1112 or
604.641.2742mrowley@mnxltd.com www.duncastlegoldcorp.com Manex
Resource Group Liana Shahinian V-P of Corporate Development
1.888.456.1112 or 604.641.2773liana@mnxltd.com