Colorado Resources Ltd.
TSX VENTURE : CXO

Colorado Resources Ltd.

November 22, 2010 10:14 ET

Colorado Resources Ltd.: Oro Property, Yukon "Carlin-Type" Gold Acquisition

WEST KELOWNA, BRITISH COLUMBIA--(Marketwire - Nov. 22, 2010) - COLORADO RESOURCES LTD. (TSX VENTURE:CXO) ("Colorado" or the "Company") is pleased to announce that it has entered into an option agreement to acquire a 100% interest in the Oro Property (the "Property"), consisting of 330 contiguous mineral claims (6683 hectares), located in the Macmillan Pass area of the Yukon, approximately 165 kilometres northeast of Ross River.

The Oro property covers the Neve MINFIILE occurrence and a 17 kilometre-long belt of faulted and folded Paleozoic sedimentary rocks which are highly prospective for Carlin-type gold deposits. Since the original discovery in 1979 by AGIP Canada Ltd. (now Cameco) exploration work on the property has outlined multiple, strong gold in soil anomalies (>500 ppb Au), with accompanying arsenic, antimony and mercury values over a 1 square kilometre area. Surface rock sampling has returned strong gold and silver values, ranging up to 5.62 g/t Au and 685 g/t Ag. Three main zones have been identified and are highlighted below.

J.O. - Saddle Zone

At the Saddle and adjacent J.O. Zone local magnetic highs are associated with two large fault zones cutting micro-fractured and locally bleached shales and calcareous units cut by a series of altered and veined intermediate dykes and sills. Significant results include:

  • An open ended soil anomaly outlined over an area of 400 x 850 metres with gold values exceeding 500 ppb and having associated antimony (>20 ppm), arsenic (>500 ppm) and mercury (>10 ppm) values.
  • Trench 83-1 across one of the soil anomalies returned an average grade of 2.49 g/t Au across its entire 44 metres (Note: sampling medium included fines and talus scree, not bedrock).
  • Exploration potential to significantly increase the size of the target areas is exemplified by wide spaced soil samples which returned highly anomalous Au (to 420 ppb) located approximately 700 metres along strike of the J.O. - Saddle Zone. These anomalies have not been followed up.

A total of 16 diamond holes were drilled in the J.O. - Saddle Zone between 1985 and 1988. Six of these drill holes were abandoned due to poor ground conditions, and many others, particularly in the 1985 drill program, had very poor recovery. The best values were obtained from the main fault on the J.O Zone and included:

  • Hole B85-4 with an average grade of 0.50 g/t Au over 65.9 metres, including 1.24 g/t Au over 12.5 metres.
  • Drill hole B85-10 returned a weighted average of 0.57 g/t Au over 30.1 metres.

Canol Zone

The Canol Zone, located 500 metres to the south of the J.O. - Saddle Zone, is a one kilometre long, 50-60 metre wide zone containing elevated gold exceeding 500 ppb, with associated antimony (>20 ppm), arsenic (>500 ppm) and mercury (>10 ppm) in soil samples coinciding with micro-fractured shale and silty limestone horizons.

In 1988 four drillholes partially tested the Canol Zone and several intervals of no core recovery were encountered, including 15.8 metres in drillhole B88-13 at the favourable Lower Earn Group (shale) - Road River Group (silty limestone) contact.

  • Hole B88-15 intersected 0.49 g/t Au over 2.8 metres starting at 45.3 m in the overlying shales.

The above-mentioned exploration results, which can be found on the Yukon government website at http://www.emr.gov.yk.ca/library/yukon_mining_reports.html, are historical in nature. Although Colorado has not independently confirmed the results from previous exploration, 8 samples taken during staking supported the past results, and the Company believes that the historical results provide an indication of the overall potential and are relevant to ongoing exploration.

Under the terms of two separate letter agreements, one to an arm's length party (Cathro Resources Corp.) and the other to a non-arm's length party (Cazador Resources Ltd.), Colorado, upon TSX Venture Exchange ("Exchange") approval, agrees to pay $150,000 cash to refund staking costs and issue 200,000 shares within 5 days of Exchange approval. Over the 6 year option period, Colorado would be required to pay a total of $1,500,000 cash and issue 1,900,000 shares in order to earn its 100% interest in the Property, subject to a 3.0% NSR, which may be bought down to 1.0% for $7.5 million.

The Company is encouraged by the "Carlin-like" geological setting, as stated by previous workers. Salient features include the presence of realgar and orpiment, "micron" gold, intermediate dykes and sills, and potentially favourable shale and silty limestone units, cut by fault zones and overlain by broad areas of anomalous soils. Previous exploration was focussed on ridges and peaks which lie above treeline, and that have relatively good exposure. The J.O-Saddle Zone and geochemical anomaly is open to the northwest towards the tree covered, lower ground and was not evaluated by AGIP. The larger exploration target on the Oro Property is the possible intersection at depth or along strike of the fault zones and dykes with the favourable limestone units.

Colorado plans an aggressive exploration program as soon as conditions permit in the spring to verify these significant historic AGIP results.

Qualified Person:

Robert Stroshein P. Eng. is the Independent Qualified Person as defined by National Instrument 43-101 who supervised the preparation of the technical data in this news release.

About Colorado

Colorado is currently engaged in the business of mineral exploration for the purpose of acquiring and advancing mineral properties located in British Columbia and the Yukon and is also aggressively seeking properties in Latin America. Colorado's primary focus is on the Hit Property located in the Similkameen Mining Division of British Columbia, in which it has the option to acquire a 100% interest.

ON BEHALF OF THE BOARD OF DIRECTORS OF COLORADO RESOURCES LTD.

Adam Travis, President and Chief Executive Officer

NR 10-05

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding proposed exploration activities. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward-looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company's equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company's prospectus dated September 16, 2010 for a more complete discussion of such risk factors and their potential effects, a copy of which may be accessed through the Company's page on SEDAR at www.sedar.com.

Neither the 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

  • Colorado Resources Ltd.
    Adam Travis
    President and Chief Executive Officer
    (250) 768-1511 or Toll Free: 1-888-860-2666
    or
    Colorado Resources Ltd.
    Terese Gieselman
    Chief Financial Officer and Secretary
    (250) 768-1511 or Toll Free: 1-888-860-2666
    (250) 768-0020 (FAX)
    www.coloradoresources.com