SOURCE: EuroGas, Inc.

September 09, 2010 07:00 ET

EuroGas to Earn Up to 60% Interest in Lumby/Bufo Ontario Gold Property Adjoining Osisko Mining's 6.7 Million Ounce Hammond Reef Gold Deposit

NEW YORK, NY--(Marketwire - September 9, 2010) -  EuroGas, Inc. (EuroGas) (PINKSHEETS: EUGS) (FRANKFURT: EUG) (XETRA: EUG) (HAMB: EUG) (STUT: EUG) today announced that it has entered into an option agreement with Belmont Resources Inc. whereby EuroGas can earn up to a 60% interest in the Lumby/Bufo property (16 contiguous claims - 2,144 ha) located approximately 35 km. northeast of the town of Atikokan, Ontario and adjoining on strike to the north-northeast with Osisko Mining Corp's Hammond Reef deposit. The Hammond Reef deposit was discovered and developed by Brett Resources Inc. which was acquired by Osisko Mining earlier this year.

To earn its initial 49% interest, EuroGas must issue one million restricted shares of its common stock to Belmont, incur $1,500,000 in exploration expenditures by December 31, 2011 ($500,000 of which must be spent by December 31, 2010), and make a small cash payment to Belmont ($50,000). Belmont will be the operator until EuroGas earns greater than 50% interest. Assuming a successful drill program, EuroGas can then opt to increase its stake to 60% by issuing an additional five million shares of its common stock to Belmont; incurring an additional $500,000 in exploration expenditures by December 31, 2012; and, paying Belmont an additional $50,000.

The Lumby/Bufo claim group has potential for the discovery of high-grade gold, silver and base metals deposits, as shown by Belmont's recent drilling in the south Bufo Lake area, and previous exploration work carried out by Atikokan Resources Inc. from 1994 to 2004. South of the Lumby/Bufo property, Osisko is focused on expanding gold resources at the Hammond Reef gold deposit. A preliminary assessment ("PA") study was completed on Hammond Reef on November 12, 2009, resulting in an inferred resource of 6.7 million ounces of gold (259.4 million tonnes grading 0.8 g/t gold at a cut-off grade at 0.30 g/t, which relates to the economic cut-off in the PA study). The deposit remains open along strike and depth, and over 97% of this resource is within 300 meters of surface.

About EuroGas, Inc.

EuroGas is a publicly traded oil and gas company with assets in Ukraine and Poland, as well as talc mining interests in the Slovak Republic and gold mining assets in Tombstone, Arizona, USA. The company's common stock trades on the Frankfurt, Hamburg and Stuttgart Stock Exchanges and XETRA in Germany under the symbol EUG and on the Other OTC (Pink Sheets) in the United States under the symbol EUGS. (www.eurogasinc.com)

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
This press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.

You can identify forward-looking statements by their use of the forward-looking words "anticipate," "estimate," "project," "likely," "believe," "intend," "expect," or similar words. These statements discuss future expectations, contain projections regarding future developments, operations, or financial conditions, or state other forward-looking information. When considering the forward-looking statements made in this press release, you should keep in mind the risks noted and other cautionary statements throughout this press release. You should also keep in mind that all forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. If one or more risks identified in this press release or other filing materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Contact Information

  • For further information, please contact:

    Wolfgang Rauball
    CEO
    EuroGas, Inc.
    Telephone: (212) 618-1274