Confederation Minerals Ltd.
TSX VENTURE : CFM

Confederation Minerals Ltd.

November 22, 2010 09:02 ET

Confederation Minerals Ltd. Options Newman Todd Project From Redstar Gold Corp; Aggressive Drill Program Planned

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 22, 2010) - Confederation Minerals Ltd (TSX VENTURE:CFM); (www.confederationmineralsltd.com) and Redstar Gold Corp. (TSX VENTURE:RGC) are pleased to announce that Confederation and Redstar have reached an agreement (the "Agreement"), whereby Redstar has granted Confederation an option to acquire up to 70% of Redstar's Newman Todd gold project, located in the Red Lake Mining District of Northern Ontario. Previous work on the project has defined a gold-bearing structure that can be traced for at least 2 kilometres along strike, with extremely significant results returned from recent drilling. Potential is considered wide open along strike and to depth.

To date three gold zones have been identified on the property with gold values up to 61.2 g/t gold over 1.0 metre (within 5.0 metres grading 14.23 g/t gold). Recent drilling by Hy Lake Resources - near the boundary of the Newman Todd property - confirms the continuation of the gold bearing structure(s) 800 metres north of Redstar's most northerly drilling. Posted on Redstar's web site (www.redstargold.com) is a copy of a map showing a model of the Newman Todd structure and gold-bearing zones with the locations of Hy Lake's drilling near the claim boundary.

To exercise the option to earn an initial 50% interest, Confederation will be required to incur a cumulative $5,000,000 of work expenditures on the Property, issue to Redstar a total of 500,000 shares of CFM and make payments to Redstar totalling $250,000 in the following manner:

  1. 100,000 shares and a $50,000 payment within 10 business days of approval of the Agreement by the TSX Venture Exchange;

  2. work expenditures of $2,000,000, issuance of 100,000 shares and a further $50,000 payment on or before the first anniversary of the Agreement;

  3. further work expenditures of $1,500,000, a further 150,000 shares and a further $75,000 payment on or before the second anniversary of the Agreement; and

  4. further expenditures of $1,500,000, a further 150,000 shares and a further $75,000 payment on or before the third anniversary of this Agreement.

To exercise the option to earn a further 20% interest, thereby increasing its overall interest to 70%, Confederation will be required to produce, at its own cost, a preliminary assessment of the Property and issue a further 500,000 shares to Redstar on or before the sixth anniversary of the Agreement, subject to minimum annual expenditures of $250,000 during the last three years of the option period. The parties also have agreed to form a joint venture following the exercise of the option by Confederation. The Property is subject to a two percent net smelter return and a fifteen percent net carried interest. The latter interest does not receive payment until capital expenditures have been recovered with interest. A finder's fee is payable by Confederation with respect to the deal. Exercise of the option is subject to regulatory approval.

High-grade gold mineralization, within the Newman Todd Structural Zone, is associated with quartz veining, silicification, sulphide and magnetite replacement of intensely iron carbonate-altered breccia zones. High-grade mineralization is commonly found within wide zones of lower grade mineralization (e.g. NT-048: 26.8 g/t over 1.5 metres within 23.5 metres of 2.01g/t gold) and occurs as multiple, steeply dipping, parallel lenses.

Table of Significant Results

Hole Zone   From (m) To (m)  Width (m) Gold (g/t)
 
NT-031 Heath Bull Zone   124.50 136.00 11.50 1.94
NT-031   Incl. 127.00 128.00 1.00 8.73
NT-031     209.50 228.00 18.50 4.62
NT-031   Incl. 225.00 228.00 3.00 24.89
NT-031   Incl. 226.00 227.00 1.00 69.02
NT-037     46.00 59.00 13.00 1.12
NT-037   and 175.00 175.70 0.70 5.27
NT-038     244.00 249.00 5.00 2.44
NT-038   and 248.00 249.00 1.00 6.20
NT-040     131.00 144.00 13.00 2.15
NT-040   Incl. 139.00 140.00 1.00 14.30
NT-040     197.00 264.00 67.00 1.76
NT-040   Incl. 219.00 221.00 2.00 9.88
NT-040   Incl. 220.00 221.00 1.00 15.00
NT-040   and 258.00 263.00 5.00 14.23
NT-040   Incl. 258.00 259.00 1.00 61.20
NT-047     359.00 363.00 4.00 4.42
NT-047   Incl. 360.70 362.00 1.30 12.84
NT-047   Incl. 360.70 361.35 0.65 24.86
NT-047   Incl. 361.00 361.35 0.35 45.30
NT-048     167.00 190.50 23.50 2.01
NT-048   Incl. 167.00 180.00 13.00 3.41
NT-048   And 167.00 168.50 1.50 26.80
NT-048     240.00 242.00 2.00 6.75
NT-048   Incl. 240.00 241.00 1.00 12.05
NT-051     298.00 299.00 1.00 4.46
NT-051   and 356.00 357.00 1.00 2.91
NT-055     55.00 57.00 2.00 3.13
NT-055   Incl. 56.00 57.00 1.00 5.68
NT-055   and 196.60 200.00 3.40 1.47
NT-055   Incl. 198.00 199.00 1.00 3.77
NT-055   and 292.00 293.00 1.00 24.00
 
NT-042 Hinge Zone   249.00 294.00 45.00 1.50
NT-042   Incl. 250.00 251.00 1.00 25.70
NT-046     160.50 191.00 30.50 1.85
NT-046   Incl. 169.00 174.00 5.00 7.78
NT-046   Incl. 171.00 174.00 3.00 10.87
NT-046   Incl. 173.00 174.00 1.00 23.50
NT-046     233.70 234.90 1.20 4.31
NT-046   Incl. 234.60 234.90 0.30 15.70
NT-053     124.00 125.00 1.00 3.61
NT-053   and 264.00 276.00 12.00 1.04
NT-053   Incl. 268.00 270.00 2.00 3.36
NT-053   and 298.00 311.00 13.00 1.00
NT-053   Incl. 301.00 306.00 5.00 2.01
NT-053   and 335.00 338.00 3.00 3.76
NT-053   Incl. 335.00 336.60 1.60 6.56
NT-053   and Incl. 335.50 336.00 0.50 11.60
NT-053   and 343.00 345.00 2.00 5.13
NT-053   including 343.00 344.00 1.00 6.96
NT-050   and 250.00 251.00 1.00 3.90
NT-050   and 268.00 270.00 2.00 3.06
 
NT-035 NE Breccia Zone   6.00 7.00 1.00 9.28
NT-036     13.00 14.00 1.00 6.67
NT-036   and 231.00 256.43 25.43 1.46
NT-036   Incl. 231.00 233.00 2.00 12.08
NT-036   Incl. 232.00 233.00 1.00 16.35
NT-039     158.00 160.00 2.00 7.60
NT-039   Incl. 158.00 159.00 1.00 14.00
NT-039   and 217.00 218.00 1.00 7.34
NT-043     88.00 97.00 9.00 2.96
NT-043   Incl. 91.00 93.00 2.00 6.24
NT-052     346.00 346.60 0.60 4.55
NT-054     37.00 38.00 1.00 3.40
NT-054   and 234.90 235.90 1.00 5.32
NT-054   and 275.00 282.10 7.10 1.36
NT-054   Incl. 276.00 278.00 2.00 3.68
NT-054   and Incl. 276.00 276.50 0.50 6.61

Mr. Lawrence Dick, Ph.D., P.Geo and President of Confederation, stated: "We are delighted to have joined with Redstar in the continuing, successful exploration to advance the high-potential Newman Todd gold project in the Red Lake District. Our objective is to expand on the Red Lake-style gold mineralization discovered on Redstar's favourably-located Newman Todd project, located in a geological setting similar to that of the famous Red Lake deposits. The tenor of the gold geochemical results from recent drilling, which reach very high grades locally, bode well for the future of the project. We plan a drill- intensive program to add to the highly-favourable results obtained to date, beginning this winter."

Scott Weekes, President Redstar stated "We are extremely pleased to have signed this agreement with Confederation which will guarantee an aggressive drill program on Newman Todd early in 2011. Redstar and Confederation are committed to aggressively exploring this developing gold system in Red Lake. The recent drilling by Hy Lake Resources - near the boundary of the Newman Todd property - confirms the continuation of the gold bearing structure 800 metres north of Redstar's most northerly drilling. Only about 40% of the 2.0 kilometre long strike extent of the Newman Todd Structural Zone that exists on the property has been tested and three gold zones have been identified. Newman Todd has advanced with every phase of drilling and this agreement facilitates the largest drill program yet on the property."

On Behalf of the Board,                                                    On Behalf of the Board,
Redstar Gold Corp                                                    Confederation Minerals Ltd.
 
"Scott Weekes"                                                    "Lawrence Dick"
 
Scott Weekes                                                    Lawrence Dick, Ph.D., P.Geo
President                                                    President

Bob Singh P. Geo., a qualified person as defined by National Instrument 43-101, has reviewed the technical aspects of this news release. Bob Singh is the Canadian Exploration Manager for Redstar Gold Corp.

Forward-Looking Information

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address events or developments that Redstar Gold Corporation (the "Company") expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

TSX.V:RGC TSX.V:CFM
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