International Gold Mining Limited

International Gold Mining Limited

September 04, 2009 11:46 ET

International Gold Mining Limited Enters Into Heads of Agreement With Salmon River Resources

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2009) -


INTERNATIONAL GOLD MINING LIMITED (TSX VENTURE:IGL) ("IGL") is pleased to report that it has entered into a Heads of Agreement ("HOA") with Salmon River Resources Ltd. (TSX VENTURE:SAL) ("Salmon River") whereby Salmon River will, subject to certain conditions, acquire the Eureka Gold Mine in Western Australia and farm into the Mkiwa Uranium Exploration Project in Tanzania. The HOA is subject to the execution of a formal agreement incorporating the terms of the HOA by November 2, 2009.

Eureka Gold Mine

In order to acquire a 100% interest, in the Eureka Gold Mine, free and clear of encumbrances, Salmon River must pay IGL CAD$2,000,000 over three years in tranches of CAD$500,000 payable on or before the date of execution of the formal agreement and on the next three anniversaries of that date.

The Eureka Gold Mine is located about 40 kilometres north of Kalgoorlie, Western Australia, adjacent to the Gold Fields highway and railway. It is presently known to host JORC compliant measured resources totaling 451,000 tonnes at 4.4 grams per tonne, containing 64,200 ounces of gold. Salmon River plans to exploit this resource in the short term after conducting infill and step out drilling, pit planning and ore processing studies.

The Eureka Gold Project area includes the Eureka open pit, which was previously mined and areas along strike to the north containing the mine sequence stratigraphy. At the northern end of the pit, drilling has defined gold mineralisation considered economically accessible by way of a cut back of the existing open pit. Exploration potential also exists at depth below the below the present pit bottom and along strike in both northerly and southerly directions, where previous exploration work indicated the presence of extensions to the ore body. There is also potential for parallel structures some 4,500 meters south of the pit. Salmon River plans to explore these areas.

Mkiwa Uranium Exploration Project

Salmon River also has the option to acquire a portion of IGL's interest in the Mkiwa Uranium Exploration Project. In order to acquire 50% of IGL's interest, Salmon River must spend CAD$1,000,000 on exploration within two years of the date of execution of the formal agreement of which CAD$250,000 must be spent within one year the date of execution of the formal agreement. Salmon River can acquire a further 20% of IGL's interest by spending a further CAD$1,000,000 on exploration within two years following the date that it acquires the initial 50% interest of which CAD$250,000 must be spent within one year following the date that it acquires the initial 50% interest. Thereafter, Mkiwa will be operated as a joint venture with Salmon River owning a 70% interest, IGL a 20% interest and the underlying vendors owning a 10% free carried interest. All costs of future exploration and development will be borne by Salmon River and IGL on a 70/30 basis, failing which the defaulting party will suffer dilution.

The Mkiwa Uranium Exploration Project is comprised of tenements totaling 2,365 square kilometres in area within the closed Bahi Swamp in central Tanzania, East Africa. The project area is linked by road and rail to Dodoma, located 70 kilometres to the east, and to Dar es Salaam, the national capital. These uranium deposits are of the playa lake/calcrete type.

Significant field work to date includes detailed radiometric ground surveys and surface sampling using the RS-125 Super Spec spectrometer. Over 1,413 line kilometers of ground radiometrics were completed during the 2008 field season. Line spacings were at 250 meter intervals and internal line spacings were generally maintained at 50 to 100 meter intervals.

This work has resulted in the delineation of three highly prospective radiometric anomalies, which are considered to have the potential to host significant uranium mineralisation. Spectrometer readings as high as 2.4 kilograms per tonne U3O8 were recorded and a significant number ranged from 100ppm U3O8 to 800ppm U3O8. Approximately USD 1,000,000 has been invested in the exploration program to date.

Certain of the tenements comprising Mkiwa abut those of Uranex NL where a uranium discovery, the Bahi C1 deposit, has been made. Other mineralisation has been discovered within close proximity to associated playa lake systems. An inferred resource for Uranex's Bahi project has been estimated at 14 million tonnes, averaging 218 ppm U3O8 for a contained content of approximately 6.7 million pounds.

On behalf of the Board of Directors


Alan Phillips, President/CEO

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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