Central Completes Due Diligence on Newman Todd Property and Moves Forward With Optionadmin
Central Resources Corp., announce that it has successfully completed due diligence on the Newman Todd property and is proceeding with the previously announced option agreement whereby Central can earn a 60% undivided interest in the Newman Todd property from Redstar Gold Corp.
“Acquiring an option on a property located in Red Lake Mining Camp, the most prolific gold region in Canada, is a significant opportunity for Central,” said Tim McNulty, President and CEO of Central Resources. “We expect to move quickly on the Newman Todd project with the goal of completing road remediation, some trenching and the first few holes of a larger ongoing drill program by the end of the year.”
On October 5, 2009, Central announced that it had entered into a letter of intent (”LOI”) with Redstar which was subject to satisfactory completion of due diligence. Under the terms of LOI, Central can earn a 50 percent interest in the project over a four year period by funding $4.5 million in exploration and development work and issuing 500,000 shares to Redstar. Central must spend $1,000,000 in exploration expenses by September 30, 2010 and an additional $500,000 by December 31, 2010. Central can earn an additional 10 percent interest in the project by funding an additional $2 million in exploration and development work and issuing 750,000 shares by December 31, 2014.
The Red Lake Gold Camp is the most prolific gold region in Canada. The area hosts several gold mines, where the combined production and remaining proven resources are estimated to be more than 30 million ounces of gold. Gold production began at the Howey Mine in 1930, and despite the regions long exploration history, the most significant discovery was made just ten years ago by Goldcorp. The top producing mines in the area include the Campbell Mine (cumulative production and remaining resource of 13 million ounces), the Red Lake Mine (10 million ounces) and the Madsen Mine (2.5 million ounces). Goldcorp’s Campbell and Red Lake Mines remain in operation today with the deep high-grade zone of the Red Lake mine being one of the highest-grade deposits in the world.
Exploration programs by Redstar on the Newman Todd property have outlined gold values within a silicified breccia zone that can be traced for at least two kilometres. Redstar has previously announced drill intercepts of up to 61.02 g/t gold over 1.0 meter within a wider zone of 14.22 g/t gold over 5.0 metres or 60.0 metres of 1.72 g/t gold in previous drill programs. The Newman Todd property has a very similar geologic setting to the major mines in the Red Lake camp in particular Goldcorp’s Campbell and Red Lake mines. Similarities include proximity to a major structure, secondary northwest-southeast trending structures, proximity to a folded ultramafic body and association with a large Fe-carbonate alteration zone.