Northern Star Mining Corporation
TSX VENTURE : NSM

Northern Star Mining Corporation

October 31, 2007 10:53 ET

Northern Star Mining Corp.: Option Agreement With Kinross/Inmet Joint Venture to Acquire 100% Callahan Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 31, 2007) - Northern Star Mining Corp. (TSX VENTURE:NSM) is pleased to announce that it has signed an option agreement with the Kinross/Inmet to acquire 100% of the Callahan gold project, located in Val d'Or, Quebec.

The Callahan project is located some 15km west of Val d'Or, Quebec, 1km north of the main Trans Canada highway. It consists of 79 claims comprising 2,181 hectares (5,387 acres), and is located adjacent to the northeast of the Company's Malartic-Midway project and contiguous to the west of Wesdome's Kiena gold operations.

Presently, the Company's Malartic-Midway project covers a section 7km long along the Cadillac Deformation zone between Osisko and Agnico-Eagles's Goldex gold mine, and includes two former gold producers Malartic Goldfields Shaft #1 and Malartic Goldfields Shaft #2, and consists of 116 claims comprising 3,142 hectares (7,763) acres. With the Callahan acquisition the Company now covers a complete north-south section of the favorable geology between Wesdome's Kiena underground operations to the east and the former gold producers Malartic Highgrade, Marban and Norlartic to the west.

The Callahan Property is located amidst some of the largest gold producers in the Val d'Or gold camp of Northwestern Quebec, an area that has a historic gold production of 25 millions ounces. Widespread gold mineralization has been identified by previous workers on the Callahan claims and, as the Property has been lying dormant for the past 20 years, remains under-explored. Several companies (Niogold, Wesdome) are currently active in the areas surrounding the Callahan. These companies are expanding zones of gold mineralization that are crossing onto the Callahan property. Most of the exploration carried out to date has been in the southern portion of the Callahan property, leaving the more northerly areas relatively unexplored. For the most part, targets have been evaluated only to shallow depths and remain open. Potential to prove a gold resources of significant economic interest is better than average.

The gold mineralization known to date on the Callahan project is described as two types: 1-) banded quartz veins with visible gold (VG) which is usually disseminated along fractures 1mm to 3 mm wide and locally accompanied by minor sphalerite and 2-) narrow shear zones locally graphitic with gold-bearing pyrite. It is also important to note that the host rock to the gold mineralization is largely diorite and quartz diorite. Very rarely, gold mineralization is present within altered mafic to ultramafic volcanics, but it is locally described on the claims.

Thirteen zones are presently known on the Callahan claims. Zones of importance are #1, #2, #4 and #10., which are located under Lac de Montigny and have been locally partly tested by underground workings. A vertical exploration shaft to a depth of 229 meter was sunk on the Callahan property, west of Lac de Montigny in 1980, by Falconbridge Ltd. A 1.5 km long exploration drift under the lake at azimuth 038 degrees, and elevation -200m, gives access to Zone #4.

Zone #4 is the better known. Falconbridge Ltd calculated an historical drill-indicated total resource of 2.25 million tons at an uncut grade of 1.70 g/t Au within two adjacent blocks. The above resources are historical in nature having been estimated prior to May 30th 2003 (CIMM current and adopted guidelines). The Company is not treating these historical estimates as current mineral resources as defined under 43-101. The Company's geologists did not conduct any detailed work including QA (Quality Assurance) and QC (Quality Control) to tentatively upgrade these resources as a current 43-101 compliant resource. Falconbridge described the gold mineralization of zone # 4 as: "Gold mineralization in quartz veinlets occurs in intense zones of alteration hosted by a structurally complex, east-west trending shear zone where it crosscuts a northeast trending monzonite intrusion. The zone occurs approximately 160 meters beneath Lac de Montigny and is interpreted to plunge to the northeast onto the Wesdome property at 300 meters below surface."

Zone #1 is hosted within a sheared, silicified and folded monzonite body that contains several high-grade intersections of gold mineralization with reported grades ranging up to 0.11 opt Au over a core length of 31.0 feet, 0.61 opt Au over a core length of 10.0 feet and 2.66 opt Au over a core length of 5.0 feet. Mineralization also occurs at ultramafic/basaltic contacts areas within the zone which remains unexplored below 200 meters and along strike.

Zone # 2 is located approximately 400 meters south of the exploration shaft, and is hosted by the silicified contact between ultramafic and basaltic flows. The mineralization has been tested by about 15 holes to shallow depths over a strike length of 300 meters with economic gold values including 90.2 g/t Au over 0.45m and 8.71 g/t Au over 5.2 m. The mineralization is open along strike and at depth.

Zone #10 "Lencourt Zone" occurs on the Audet Option and was discovered in the 1960. Mineralization occurs in sheared, silicified and pyritized basalts with economic grades over narrow widths. This structure has been interpreted as the southeast extension of the Norlartic Mine now being re-evaluated by Niogold. The Company's geologists and consultants believe that potential for a mid-tier gold producer is considered moderate to high on the Callahan project alone.

To acquire the 100% interest, the agreement calls for total expenditures of 2.5 million dollars on or before the date which is 30 months following the effective date, 550,000 shares of the Company on the effective date, 550,000 shares on the first anniversary, 550,000 shares on the second anniversary and a cash payment of $200,000 on the effective date. The optionor retains a 2.5% N.S.R. royalty on the project, of which 40% can be purchased at any time for 1.5 million dollars. Finally, upon the onset of commercial production, the Company must pay 2.5 million dollars to the optionor.

The Company has a 60 day due diligence period, with the effective date being final as on or before December 23, 2007.

The transaction is subject to the approval of the regulatory authorities.

Drilling using two rigs continues on the Malartic-Midway project and results will be announced as available.

Claude P. Larouche, Geol. Ing. (OIQ) acts as the qualified person of the Company and has reviewed the contents of the news release.

ON BEHALF OF THE BOARD

Michel David, President

The TSX Venture Exchange has not reviewed the present information and is not responsible for the contents of this news release, which may contain forward looking statements.

Contact Information

  • Northern Star Mining Corporation
    Michel David
    President
    (819) 825-8088 or Toll Free 1-800-460-5031
    (819) 825-1199 (FAX)
    Website: www.nsmgold.com