Zone Resources Inc. Acquires Iron Ore Project in Quebecadmin
Zone Resources Inc. announces that it has acquired an option to earn a 100% interest in the Girard Iron Ore Property, consisting of approximately 7,200 hectares, located in Nunavik, northern Quebec. The terms of the agreement are subject to regulatory approval of the TSX Venture Exchange. The iron zones located on the Girard Iron Ore Property are located in the Labrador Trough, a world famous iron ore belt. The property is northwest of Adriana Resources’ Lac Otelnuk Project (wherein Wuhan Iron and Steel Corp. has paid $120 million for a 60% interest), and New Millenium’s Kemag and Labmag projects (who have an option agreement with Tata Steel for a $4.9 billion development which includes the construction of a 750 km slurry pipeline). The Girard Iron Ore Property has not been subjected to modern exploration methods and only minimal drilling has been carried out in the past.
Pursuant to the terms of the option agreement, Zone will pay a cumulative amount of $225,000 cash and issue 2,150,000 common shares over a three year period. The Girard Iron Ore Property will also be subject to a 2.0% Net Smelter Royalty (“NSR”) and Zone shall have an option to purchase 1% of the NSR for the sum of $1,000,000 at any time up to when a production decision is made.
“With the recent exciting developments in the Labrador Trough, we believe that this iron-ore opportunity has the potential to add significant shareholder value,” stated Charles Desjardins, President and CEO of Zone Resources. “Zone Resources will also continue to try and identify oil and gas opportunities that will contribute to the growth of the Company.”
The Girard Iron Ore Property contains a minimum of 6 zones of iron mineralization that were identified in historic work which was completed by the Quebec Labrador Development Company Ltd. between 1947 and 1960. The zones of iron mineralization are located over a length of 19 km and a width of up to 5 km. Outcrop is limited and overburden is up to 25 feet (7.6 meters) deep. As a result, the property was not extensively worked during the period that the major iron mines of the Labrador Trough were developed near Schefferville and Labrador City.
The 6 zones of iron mineralization on the property, from south to north, are; the MacDonald, Gagnon, Big Dome, Ball No. 1, Ball No. 2 and Girard Lake.
The MacDonald zone had been exposed by hand trenching, pitting and small x-ray sized core drilling with holes to a maximum of 100 feet. The MacDonald zone was discovered because of a prominent rust covered area, one and one half miles long and widths exceeding 600 feet. Trenching, pitting and drilling on the North Zone, where the overburden was the thinnest, extended the iron zone by at least 2,600 feet. Assays from trenches and pits, outlined in a report dated 1950 by K.C. Burwash of the Quebec Labrador Development Company Ltd., ranged from one sample assaying a low of 28.37% iron to a high sample assaying 65.24% iron, with 6 (out of 41) samples assaying from 33.25% iron to 39.50% iron, and 20 (out of 41) samples assaying from 40.37% iron to 49.23% iron, and 12 (out of 41) samples assaying from 50.16% iron to 59.75% iron, and 2 (out of 41) samples assaying from 62.41% to 65.24% iron, with the full range of assays from 4 separate trenches and 13 separate pits. There is no reference to whether the samples were chip or grab.
The Ball No. 1 iron zone is approximately 8 km north of the MacDonald zone. The Ball No. 1 zone is in an area of overburden at least 25 feet (7.6 meters) thick and was originally discovered due to the soil discoloration. The following excerpts are from a 1949 report by W.P. Corking for the Quebec Labrador Development Company Ltd.; “… the Ball No. 1 showing is iron formation… analysis of nine samples showed iron content ranging from 28% to 43%… the work done to date consists of 15 test pits covering a length of 800 feet and a width in one place of 600 feet. The actual dimensions of the oxidized zone are not known because of glacial covering: on the evidence of the soil colouration however, it is estimated that not more than 10% of the zone has been test pitted.”
Between the MacDonald and the Ball No. 1 zones, the Big Dome and the Gagnon zones were identified. In a 1952 report by Burwash, it is reported that Dr. Sandefur had; “… located a very prominent and deep fold in the iron formation… this trough has been outlined by Dr. Sandefur for over a length of 4 miles of which the Ball No. 1 forms the eastern extremity.”
The Ball No. 2 zone lies 6 km to the north of the Ball No. 1 zone. The Ball No. 2 zone had 8 test pits and trenches over an area of 1/2 mile by 1/2 mile and returned from 35.67% Iron to 45.52% Iron as reported in 1950 by Burwash.
The Girard Lake zone is 5 km northwest of the Ball No. 2 zone. The Girard Lake zone consists of iron formation and magnetite and was reported by Bergeron in 1952 as; “… A preliminary sampling showed an iron content varying between 60% and 68%.” The zone was outlined by pits and trenches in excess of 400 feet and with widths varying from 12 to 40 feet.
The historical results disclosed in this news release have not been verified by a Qualified Person to conform to NI 43-101 standards and are included here for general information purposes only and should not be relied upon. All geological information, including all information on the Girard Iron Ore Property, has been provided by the Optionor and has not been independently verified by Zone. Investors are cautioned not to rely solely on this information.
Technical information in this news release has been reviewed by Mike Magrum, PEng, a qualified person as defined in NI 43-101.