Andover Ventures Inc.
TSX VENTURE : AOX

Andover Ventures Inc.

August 25, 2006 00:15 ET

Andover Acquires Prominent Land Position in Alaska

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 25, 2006) - ANDOVER VENTURES INC. (the "Company") (TSX VENTURE:AOX) is pleased to announce that it has entered into an Exploration Agreement with Option to Lease with the Bristol Bay Native Corporation (BBNC), an Alaska Native Regional Corporation. The agreement will allow Andover to acquire a 100% interest in mineral rights at five individual properties covering approximately 18,000 hectares in the Iliamna Lake area of southwest Alaska and hosting various styles of mineralization. The Properties, a combination of private lands owned by BBNC, and claims staked on state-owned lands, are in the general vicinity, and in a similar geological setting, as the Pebble Project, a major porphyry copper-gold-molybdenum deposit being developed by Northern Dynasty Mines Ltd.

The KUY Property is an epithermal gold-silver target, is located southwest of the village of Kokhanok in rocks of the Talkeetna Arc. Gold-silver telluride mineralization has been discovered at the site. Historic grab samples, collected during the 1980's by previous operators, of vuggy quartz veins hosted by dacite breccia are reported to contain up to 56 oz/ton gold and 163 oz/ton silver, along with anomalous copper, lead, and zinc. The majority of work at KUY was conducted in the late 1970's and early 1980's. Ground magnetics, VLF, and IP have been used successfully to locate mineralization, alteration zones, and fault zones. Soil sampling identified anomalous gold, silver, copper, lead, and zinc. A limited 1,200-foot drilling program failed to intercept high-grade mineralization. The property geology indicates that a caldera rim-related epithermal system or a porphyry system may be present. The prospect is located on or near the lower Jurassic Talkeetna Formation, which has been shown to be chemically and temporally analogous to the Hazelton Formation in British Columbia, which hosts the Eskay Deposit.

The Fog Lake Property is located east of KUY, is a copper-gold target, near the Kamishak Property currently being drilled by Andover. Exploration work in the early 1970's identified a 700-meter long multi-element soil geochemical anomaly at this site. Of the 130 soil samples in the anomalous zone, 49 contained between 100 and 18,800 ppb gold and 65 contained between 70 and 3,200 ppm copper. The zone is also anomalous in zinc, lead and silver. There is no rock exposure at the strongest portions of the soil anomaly. However, in Fog Creek, narrow massive chalcopyrite veinlets are exposed in the creek bed. The exposed mineralization does not seem significant enough to account for the strong, broad soil geochemical anomaly. No drilling has taken place, but trenches were excavated at the soil anomaly. Fractured bedrock contained anomalous metal values. Mineralization may be related to a buried porphyry system, or an epithermal system.

The Kemuk Property is centered on a large, strong magnetic anomaly that was identified and drilled in the 1950's by Humble Oil Company in an exploration program designed to discover iron ore. Magnetite in gabbroic rocks was discovered in what is suggested by airborne magnetic surveys to be a large intrusive body. Relogging and sampling of the drill core identified zones of anomalous platinum. The zones are quite broad, with core lengths up to 51 feet with platinum ranging between 30 ppb and 105 ppb.

The Chilikat Property is comprised of two non-contiguous blocks of state mining claims covering 2330 hectares each. The claims cover coincident magnetic and radiometric geophysical anomalies, and gold - copper stream sediment anomalies. The target is located within the northeast-trending Mulchatna fault system, at the intersection with a northwest-trending structure along which are located a series of volcanogenic, vein-hosted, and porphyry deposits. The northeast - trending Mulchatna fault system is parallel to the Lake Clark fault system, upon which the Pebble deposit is situated. The underlying strata are volcanic and sedimentary rocks of the Talkeetna Arc, and are intruded by syndepositional and later intrusive rocks. Very little prior exploration has been conducted in this area.

The Samuelsen Property is a 2330 hectare block of claims staked on anomalous heavy mineral pan concentrate stream sediment geochemical anomalies. Visible gold grains are present in panned concentrate samples collected by the United States Geological Survey in 2004. Radiometric and magnetic anomalies documented from prior government airborne surveys are present.

President Mike England states, "This package of properties, along with projects that may be generated, gives Andover a prominent land position in a highly prospective, under-explored region that is currently a global focus of mineral exploration activity."

To acquire these 100% owned properties, Andover has agreed to a seven year exploration agreement with the option to lease or purchase the lands in the event of a major mineral discovery. The exploration agreement calls for total minimum exploration expenditures of US$4.15 million, and option payments to BBNC totaling US$875,000 (US$90,000 first year). Additionally, Andover will make annual scholarship donations to the Bristol Bay Native Corporation Education Foundation that, over the seven year life of the agreement, will total $240,000. Any of the claims that are, or become, subject to the agreement may be purchased outright by Andover during the option period for $5 million, subject to an NSR royalty. Andover has the option to lease other minerals lands owned by BBNC. Leases are subject to annual cash payments and an NSR royalty on production. Base metal royalties, after an optional buy-down payment, will be 1%. Precious metal royalties are on a sliding scale tied to the price of gold (see below). After an optional buy-down payment, the royalty will range between 2% and 3%.



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Price of Gold Production Royalty
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Less than $300.00 2.00% of NSR
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Equal to or greater than $300.00
but less than $400.00 3.00% of NSR
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Equal to or greater than $400.00
but less than $500.00 4.00% of NSR
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Equal to or greater than $500.00 5.00% of NSR
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The samples disclosed in this news release are historic in nature, have not been verified by Andover Ventures and should not be relied upon. The Company will prepare a 43-101 report on all the properties in the near future.

The qualified person, as defined by National Instrument 43-101, for this project will be consulting geologist Dr. David Hedderly-Smith, PhD, CPG.

Marvin Mitchell, P.Eng, director of Andover Ventures Inc and qualified person as defined by National Instrument 43-101, has approved the information contained in this release.

A finders fee of 150,000 shares will be payable to Full Metal Minerals upon TSX Venture Exchange approval and a further 150,000 shares upon receipt of a feasibility study, should that happen, on the properties contained in this agreement.

The company also wishes to announce it is increasing it's previously announced financing on August 11, 2006 at $0.50 to $850,000 from $750,000 to help facilitate this acquisition.

The company has granted incentive stock options to directors, officers, employees and consultants to purchase up to 150,000 shares in the capital stock of the company. The options are exercisable at a price of 50 cents per share and expire on Aug. 24, 2011.

Andover Ventures is currently drilling the Kamishak copper-gold Prospect in southwest Alaska. Initial results are anticipated by mid-September.

ON BEHALF OF THE BOARD

Michael England, President

The TSX Venture Exchange has not reviewed nor does it accept responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Andover Ventures Inc.
    Michael England
    (604) 683-3995
    (604) 683-3988 (FAX)