Touchdown Capital Inc.

February 01, 2010 07:01 ET

Touchdown Capital Enters Prolific Ontario Gold Camp with Option Agreement on Mhakari's 80 Square-Kilometre Argyle Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 1, 2010) - Touchdown Capital Inc. (TSX VENTURE:TDW) announced today that it has signed an Option Agreement with Mhakari Resources Inc. to earn an 80-percent interest in Mhakari's Argyle Gold Project, 60 kilometres west of Kirkland Lake in Northern Ontario. The project covers more than 20,000 acres (80 square-kilometres) on an underexplored western extension of the Kirkland Lake and Larder Lake gold camp, Canada's second most productive gold region with total historic production exceeding 40 million ounces.

The Larder Lake-Cadillac deformation zone and closely associated Kirkland Lake fault zone have recently seen significant new discoveries and revitalization, led by Kirkland Lake Gold Inc., Queenston Mining Inc., and Northgate Minerals Corporation. Northgate is developing the Young-Davidson Mine, about 12 kilometres west-northwest of Argyle. In 2009, Northgate reported a positive prefeasibility study, anticipating annual production of 170,000 ounces of gold at a net cash cost of $333 per ounce, beginning in early-2012. After two years of open pit operation, Northgate foresees an increase to nearly 200,000 ounces per year, with a slight decrease in net cash costs, as mining moves underground for at least 13 more years.

The Argyle Gold Project includes at least ten known gold occurrences directly associated with comparable geology, structure, and mineralogy to the Young-Davidson Mine and other major gold deposits of the Matachewan, Kirkland Lake, and Larder Lake areas. Highlights from historic exploration at Argyle include high-grade grab samples of up to 90.2 grams per tonne (g/t) gold (grab samples are selective by nature and unlikely to represent average grades). Limited drilling on the property has returned near-surface intersections of up to 24.0 g/t gold over 0.6 metres and 29.8 g/t gold over 0.4 metres. The project also surrounds (but does not include) the Ashley Gold Mine, which produced about 50,000 ounces of gold in the 1930's from ore grading approximately 10 to 12 g/t gold.

Known gold occurrences and other attractive prospects at Argyle have seen only limited prior exploration due to several obstacles. In recent years, however, fragmented land ownership and tenure issues have largely been resolved, while recent geophysical surveys and modern analysis techniques have improved understanding of area geology and compensated for the lack of outcrop. Based on initial exploration and historic data compilation by Mhakari in 2009, gold occurrences at Argyle can be correlated geologically and structurally with several regional gold deposits.

Richard Macy, President of Touchdown stated: "We are pleased to option the Argyle Gold Project and to work with Mhakari. We believe that the geological setting west of Matachewan is among the last remaining unexplored areas with the potential to host Kirkland Lake and Larder Lake type gold deposits."

Pursuant to the Option Agreement, Touchdown can earn an 80-percent interest in the Argyle Gold Project from Mhakari by:

  • Paying Mhakari $25,000 cash upon signing and an additional $25,000 in January 2011.
  • Issuing 2.0-million of its common shares to Mhakari upon signing and issuing an additional 1.2-million shares to Mhakari in January 2011.
  • Spending $400,000 on exploration by January 2011 and an additional $1.1-million on exploration by January 2012.

The Agreement contains an acceleration clause which allows Touchdown to reduce their January 2011 share payment to Mhakari from 1.2-million to 1.0-million if it spends $1.2-million on exploration by January 2011. Furthermore, Mhakari will retain a 2.25-percent Net Smelter Returns (NSR) royalty on the property, of which Touchdown can buy-back 1.0-percent for $1-million. Mhakari will operate the project during the option period.

Touchdown Capital Inc. is a Vancouver-based mineral exploration company, focusing on the Kirkland Lake and Larder Lake gold camp of Northern Ontario. Touchdown also holds gold and molybdenum properties in British Columbia. Touchdown's shares are listed on the TSX Venture Exchange under the symbol "TDW".

Mhakari Gold Corp. is a private Ontario-based exploration company with gold and silver properties located in Northern Ontario and Nevada. Mhakari's properties are located in the Timmins, Kirkland Lake, Matachewan, and Pickle Lake areas of Northern Ontario, and on Mineral Ridge, Walker Lane District in Nevada. All of its properties are near or adjacent to historic gold and silver producers, and are exposed to excellent infrastructure with year-round accessibility.

A 10% finder's fee comprising both cash and shares will be paid in the aggregate on the transaction to arm's length third parties within seven business days after Exchange Acceptance of the Option Agreement.

On Behalf of the Board,

Touchdown Capital Inc.

Richard Macey, President

This news release has been prepared on behalf of the Touchdown Capital Inc. Board of Directors, which accepts full responsibility for its contents. The contents of this release have been reviewed and approved by Edward C. Walker, Ph.D., P.Geo., an independent qualified person as defined by National Instrument 43-101.

"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 release."

Contact Information

  • Touchdown Capital Inc.
    Richard Macey
    (604) 669-0401
    (604) 669-0414 (FAX)