Challenger Development Corp.

March 25, 2010 08:00 ET

Challenger Development Corp.: Agreement to Acquire 70% Interest in Former Gold Producer in Zambia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 25, 2010) - Challenger Development Corp. (TSX VENTURE:CDQ) is pleased to announce that it has entered into an agreement to acquire a 70% interest in a private Zambian company holding a mining licence for a property with a former gold producer, the Iron Cap Gold Mine, in Zambia.

The Iron Cap Gold Mine property, consisting of 1,187 acres, is located within the central Province of Zambia 50 km southeast of the town of Kabwe. It is reported that a total of 38,431 ounces of gold was produced from the property between 1950 and 1961. Previous mining activity on the property consisted of a small open pit, two shallow shafts, some underground workings and extensive trenching. Previous sampling results ranged between 1.6 and 29.2 g/t gold. The Iron Cap area is underlain by metasediments and metavolcanics from the Proterozoic Muva Supergroup. Structurally, the property is located within the 550 Ma year old Mwembeshi Shear Zone/dislocation. The Mwembeshi Shear Zone is a ductile shear zone associated with a sinistral strike slip movement. The northern part of the Iron Cap property is underlain by andesitic lave from the Muva Supergroup, whilst the southern part of the property comprises schists and quartzites.

Since the property has not been subjected to modern exploration methods, the proposed exploration program would consist of mapping trenching, sampling, soil geochemistry and geophysics to define gold drill targets.

Zambia has a history of Au mining on a relatively small scale, with the twenty larger deposits having produced slightly more than 70.5 million ounces of gold since modern mining began in 1902. The majority of gold (Au) deposits in Zambia are mesothermal lode deposits (veins and more dispersed occurrences in brittle and brittle-ductile shear zones). Mesothermal gold deposits are a distinctive class of mineral deposit that has been the source for much of world Au production.

Under the terms of the agreement, Challenger must spend a total of US$1,500,000 on exploration work on the Iron Cap property, to earn a 70% interest in the private Zambian company. US$700,000 must be spent before March 31, 2011 or one year from receiving Exchange approval. A further US$800,000 must be spent before March 31, 2012 or within two years of receiving Exchange approval. After vesting, a joint venture will be formed to further develop the property. This agreement is subject to receipt of TSX Venture Exchange approval for this transaction. A finder's fee, in the maximum amount permitted under the policies of the TSX Venture Exchange, is payable.

Zambia is a stable multi-party democracy, with relatively low sovereign risk and an established mining culture. The Zambian Government is a great supporter of mineral exploration and is fully committed to mine development. The Government has adopted a pragmatic mineral policy, which have been designed to enhance investment in the mining industry and to ensure the development of a self-sustaining minerals-based industry. Zambia possesses a well-established transport and communications network and is self sufficient in terms of its electricity requirements.

Mike Magrum, P. Eng, a qualified person under National Instrument 43-101, has approved the technical content of this news release. 

On behalf of the Board of Directors,

Challenger Development Corp.

Simon Tam, Director

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.

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 press release.

Contact Information

  • Challenger Development Corp.
    Simon Tam
    (604) 668-5972
    (604) 871-9926 (FAX)