SOURCE: Colorado Goldfields Inc.

Colorado Goldfields Inc.

August 25, 2009 08:00 ET

Colorado Goldfields Acquires Prime Colorado Mining Property

LAKEWOOD, CO--(Marketwire - August 25, 2009) - Colorado Goldfields Inc. (OTCBB: CGFIA) announces today that it has signed a letter of intent to lease with an option to purchase the Brooklyn collection of properties located in San Juan County, Colorado, USA.

The properties consist of approximately 600 acres of patented and unpatented claims located along the historic Brooklyn Mine and associated structures. The Brooklyn Mine has consistently produced exceptionally high-grade gold ore since its discovery around 1900.

The abundance of free gold associated with the ore makes historical production records difficult to interpret. However, a historic resource estimate of $13.8 million (14,535 ounces of gold times $950 per ounce) at a grade of 0.69 ounces per ton contained in two established and accessible ore shoots below the existing workings is based on well-documented and confirmed prior exploration. "We are targeting grades of 0.30 to 0.90 opt Au, but the Brooklyn Vein has produced ore with grades as high as 30.0 ounces of gold per ton," stated Jonathan Moore, Project Geologist. "The Brooklyn represents a property that is perfectly aligned with Company's strategy of targeting past producing mining properties in historic districts for exploration and production," said Moore.

The Brooklyn has produced some of the most spectacular specimen quality gold in the Country. An example of gold in quartz from the Brooklyn Mine is shown below.

A team consisting of Colorado Goldfields personnel, the current owner of the properties, and the former project geologist went underground at the mine on Wednesday August 19, 2009. The team reported that the number 2 level of the mine is in good condition. Historic drill stations were located and examined. Former Project Geologist John Wright confirmed in detail the targets and results of the drilling that supported the current resource estimate and provided specific recommendations for expanding that resource.

Colorado Goldfields is currently developing an aggressive exploration and development plan for the Brooklyn property. Since the underground workings are accessible, exploration will be able to be performed year-round despite the properties' 11,000 foot elevation.

Underground and surface geologic mapping and sampling, a geochemical soils survey, and geophysical work is planned for the fall and winter season, along with extensive underground diamond drilling. "The primary focus will be to fast track the confirmation, expansion, and development of minable blocks of ground already on our radar, while obviously pushing exploration into other prospective areas of this exciting property," stated Jonathan Moore.

Initial efforts will also be directed toward environmental assessment and rehabilitation. "As always, we will be honoring our policy of environmental stewardship. The rehabilitation will not only remove the historic tailings, but provide the Company material to mill at our Pride of the West Mill, which is only 9 miles away, possibly recovering precious metals from the prior operations," said Stephen Guyer, CFO for Colorado Goldfields.

In an all-stock transaction, Colorado Goldfields will lease with an option to purchase the Brooklyn properties in exchange for shares of Class A Common Stock. The acquisition is of course subject to mutual due diligence. The due diligence period extends to September 30, 2009.

About Colorado Goldfields Inc.

Colorado Goldfields Inc. (OTCBB: CGFIA) (http://www.cologold.com) is a Denver-based junior exploration and mining company primarily exploring for gold and silver. Our seasoned management team targets historic gold camps with strong potential for multiple deposit discoveries. Currently, our business model in Colorado provides an outstanding combination of former producing properties with excellent exploration and production potential and a currently inactive, modern, up to 700 ton per day capacity mill facility to allow for an attractive short-term production time frame. We expect that this strategic plan will allow Colorado Goldfields to reach its goal of profitability, potentially within the next 18 months.

The Company has made available a current CGFIA Fact Sheet in PDF format at http://www.cologold.com/uploads/CGFIFactSheet.pdf.

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Notice regarding forward-looking statements

This news release may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements or information includes statements regarding the expectations and beliefs of management. Forward-looking statements or information include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to obtaining financing to meet the Company's exploration program and operating costs during its exploratory stage, the interpretation of exploration results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, accidents, equipment breakdowns, title matters, or other unanticipated difficulties with or interruptions in production and operations, the potential for delays in exploration or development activities or the completion of feasibility studies, the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, regulatory restrictions, including the inability to obtain mining permits and environmental regulatory restrictions and liability, the speculative nature of mineral exploration, dilution, competition, loss of key employees, and other risks and uncertainties, including those described under "Risk Factors" in the Company's Annual Report on Form 10-KSB filed on December 27, 2007, and as amended on March 3, 2008, which is on file with the Securities and Exchange Commission, as well as the Company's other SEC filings. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company does not undertake any obligation to release publicly revisions to any "forward-looking statement," to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as is required under applicable securities laws.

Cautionary note to U.S. Investors -- The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this website (or press release), such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit U.S. registered companies from including in their filings with the SEC. U.S. Investors are urged to consider closely the disclosures in our 10-KSB which may be secured from us, or from the SEC's website at http://www.sec.gov/edgar.shtml. This press release may contain information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. Investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.

Contact Information

  • Contact:
    Brad Long
    Director of Investor Relations
    Colorado Goldfields Inc.
    866-579-2434 or 303-984-0524
    http://www.cologold.com