Abbastar Resources Corp.

Abbastar Resources Corp.

September 22, 2009 09:35 ET

Abbastar Resources Options High Grade Gold Project from Denison Mines Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 22, 2009) - Abbastar Resources Corp. (TSX VENTURE:ABA) is pleased to announce an option agreement with Denison Mines Corp. on the Talbot Lake gold project in northern Ontario. Abbastar has the right to earn 100% interest from Denison, subject to a 2% NSR, upon expenditures of $7,000,000 over 8 years.

The Talbot Lake gold project hosts the "Main Zone" gold deposit which was discovered by Placer Dome in 1985 and acquired by Denison Mines in 1998. It consists of an East-West striking and vertically dipping quartz vein containing visible gold, pyrite, copper sulphide and zinc sulphide. Channel sampling by Denison indicated an approximate strike length of the Main Zone to be 48m with a weighted average grade of 13.8 g/t Au over a width of 3.3m. One channel over a width of 1.8m yielded a spectacular value of 120.0 g/t Au. The gold deposit extends for a depth of approximately 200m and remains open. The following are some significant drill hole intersections by Placer Dome from the "Main Zone"; 16.4 g/t Au over 7.6m, 37.2 g/t Au over 2.5m, 26.9 g/t Au over 2.9m, 7.5 g/t Au over 7.5m. (source: Resident Geologist, Ministry of Northern Development and Mines, Thunder Bay). To date a total of $6,000,000 in exploration expenditures has been carried out on the Talbot Lake gold project.

A parallel "Sulphide Zone" up to several metres wide is often intersected adjacent to the "Main Zone" and contains copper and zinc mineralization with anomalous gold. Further to the east the Main Zone is crosscut by a northeast trending fault with a separate mineralized structure called the "East Zone" located immediately east of this fault. The 'Sulphide' and 'East Zones' have received less attention than the Main Zone but remain highly prospective and will be part of a more aggressive exploration program on the Talbot Lake gold project. Importantly, there is considerable potential to expand the Property's known gold zones.

The Talbot Lake project is located within the world-renowned gold producing "Uchi Subprovince" of northwestern Ontario. This prolific gold producing area is host to the Red Lake and Pickle Lake gold mining camps and has produced in excess of 40 million ounces of gold.

Gold bearing quartz veins, like that at Talbot, are common in the established mining camps such as Red Lake, Timmins, Kirkland Lake and have been Canada's most important gold producers. These quartz vein systems are planar objects, which tend to have great lengths and depth. Gold deposits in the Uchi Subprovince show excellent continuity in the depth dimension and operations such as Goldcorp's Red Lake Mine is evidence of such.

"Acquiring such a significant high grade gold asset in this strong precious metal market bodes well for the future of Abbastar," commented John B. Good, President and CEO. "The Company is extremely excited with this new development. Given the strong market demand for gold, the Talbot Lake gold Project has become a very important and valuable asset in the growth of Abbastar."

"We are looking forward to advancing this exciting high grade gold project," stated Aubrey Eveleigh, VP Exploration. "The Talbot Lake project is located in one of the more prospective geological gold 'belts' or subprovinces in Canada."

Abbastar may earn an initial 70% interest by incurring expenditures of $4,000,000 over 5 years. Abbastar may elect to earn an additional 30% by making a payment of $250,000 and expending an additional $3,000,000 on the Project on or before 30 September 2017 (Year 8). If Abbastar elects not to earn an additional 30%, a JV of Abbastar 70% and Denison 30% will be formed and governed by a committee of 2 people from each party. Upon Abbastar notifying Denison of having expended $7,000,000 and earning 100% undivided interest in the Project, subject to a 2% NSR to Denison, Abbastar will make an additional payment of $250,000.

Exploration on the Talbot Lake gold Project is carried out under the supervision of Aubrey Eveleigh, P.Geo. (QP - NI43-101). The historical assays have not been verified and as such should not be relied upon even though Abbastar plans to immediately bring the Project up to TSX Venture 43-101 reporting standards.

Abbastar has approximately 15,200,000 common shares outstanding.

The statements used in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's forward-looking statements and expectations.

Neither TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Abbastar Resources Corp.
    Mr. John B. Good
    President and CEO
    (604) 537-0004
    Abbastar Resources Corp.
    Mr. Morgan Good
    Investor Relations
    (604) 715-4751