Queenston Mining Inc.

Queenston Mining Inc.

January 04, 2008 08:57 ET

Queenston Replies to Newmont on Sale of NSR Royalty

TORONTO, ONTARIO--(Marketwire - Jan. 4, 2008) - QUEENSTON MINING INC. (TSX:QMI)(FRANKFURT:QMI)(STUTTGART:QMI)(BERLIN:QMI) ("Queenston" or "the Company") has waived the right of first refusal to purchase from Newmont Mining Corporation ("Newmont") a 1% - 2% net smelter royalty ("NSR") on certain of Queenston's Kirkland Lake, Ontario holdings for CDN $9,932,461.

The right of first refusal was retained by Queenston in 2002 when it purchased Newmont's 50% interest in the Kirkland Lake Joint Venture for CDN$ 3,868,500. Under the terms of the purchase, Newmont maintained a sliding scale NSR of 1% at gold prices below or equal to US$350/oz, 1.5% between US$350 and US$400/oz and 2% over US$400/oz on 15 of Queenston's properties in the Kirkland Lake area. The royalty properties do not include Queenston's 100% Upper Beaver project, where the Company is building a new mineral resource, or the South Claims property that is actively being explored with 50% joint venture partner Kirkland Lake Gold Inc.

On December 7, 2007 Queenston was given notice by Newmont that it was selling the NSR to Franco-Nevada Corporation ("Franco") for a value of CDN $9,932,461 which triggered Queenston's right to purchase the NSR for the same price it was being acquired by Franco. Queenston has informed Newmont of its intention to not exercise the right of first refusal.

Update on Activities

Queenston continues to advance the resource definition and exploration drilling program on the Upper Beaver property with two rigs and plans to commence a NI 43-101 resource calculation by the end of the first quarter. This is the first step in advancing the Company's primary gold assets in the Kirkland Lake camp (Upper Beaver, McBean, Anoki, Upper Canada) towards the goal of returning to gold producer status. Also in the camp, Queenston and Kirkland Lake Gold continue the underground development and exploration program of advancing a crosscut on the 5300' level of the Macassa Mine towards the jointly owned South Claims property. The crosscut is now approximately 130 ' (40 m) from the property boundary where underground diamond drilling will target the projection of the new South Mine Complex onto the South Claims. On the adjacent 100% owned Amalgamated Kirkland property, Queenston continues drilling a deep, surface exploration hole targeting the South Mine Complex at a vertical depth between 1800 and 2000 m below surface (2500 m down hole). The hole is currently drilling at 1700 m down hole and is anticipated to reach target depth in three weeks.

On the Wood-Pandora property, located in the Cadillac Camp, Quebec, Queenston and 50% joint venture partner Globex Mining Enterprises Inc. are completing a NI 43-101 report on the Ironwood Zone that will outline a mineral resource and identify further gold exploration targets.

Queenston has working capital of $13 million to meet both its surface and underground exploration activities.

Forward Looking Statements

Except for historical information this News Release may contain certain "forward looking statements". These statements may involve a number of known and unknown risks and uncertainties and other factors that may cause the actual results, level of activity and performance to be materially different from the Company's expectations and projections. A more detailed discussion of the risks is available in the "Annual Information Form" filed by the Company on SEDAR at www.sedar.com.

Contact Information

  • Queenston Mining Inc.
    Charles E. Page, P. Geo.
    President and CEO
    (416) 364-0001 (ext. 224)
    Queenston Mining Inc.
    Hugh D. Harbinson
    (416) 364-0001 (ext. 225)
    Email: Info@queenston.ca
    Website: www.queenston.ca