Foundation Resources Inc.
TSX VENTURE : FDN

Foundation Resources Inc.

September 20, 2011 07:00 ET

Foundation Resources Inc.: NI43-101 Mineral Resource Estimate Reports Significant Contained Ounces of Gold for the East Coldstream Gold Deposit in Northwestern Ontario

- Inferred Resource contains approximately 763,200 ounces of gold

- Indicated Resource contains approximately 96,400 ounces gold

- East Coldstream Deposit occurs at surface and is open in both strike and dip

- Awaiting assay results from recent drilling at Iris Lake located 1.5 km north of the East Coldstream Deposit

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 20, 2011) - Foundation Resources Inc. (TSX VENTURE:FDN) ("Foundation") and Alto Ventures Ltd. (TSX VENTURE:ATV) ("Alto") are pleased to announce the receipt of a draft of an NI43-101 Technical Report ( the "Report") including a Mineral Resource Estimate for the East Coldstream Gold Deposit ("Deposit") located on the Coldstream Property (the "Property) in Northwestern Ontario. There are currently four other significant gold targets (e.g., Iris Lake, Goldie Zone, Burchell West and Span Lake) on the Property which are not part of the current resource estimates. The Report was prepared by Wardrop, a Tetra Tech Company (Wardrop) and incorporates over 26,000 m of drilling that was completed on the deposit. Foundation is the operator of this project and owns 60% interest in the Property. Alto owns the remaining 40%.

Indicated and Inferred resources have been determined for the East Coldstream Deposit (see Table 1). At a cut-off grade of 0.4 g/t gold and using the Inverse Distance Squared (ID2) estimation method, the two parallel gold horizons contain an Indicated Resource of about 3.5 million tonnes with an average grade of 0.85 g/t gold. In addition, the Inferred Resource totals approximately 30.5 million tonnes with an average grade of 0.78 g/t gold. Table 1 provides a summary of the Resource Estimate at the 0.4 g/t cut-off. The Deposit estimated to contain 763,276 ounces of gold in inferred category and 96,400 ounces of gold in indicated category.

Table 1. East Coldstream Deposit Resource Estimation Summary at 0.4 g/t gold cut-off (using ID2 method)
Class Horizon Tonnes Above Cut-off Grade Average
Grade
(g/t)
Au Ounces
Inferred EC-1 20,732,000 0.77 515,454
EC-2 9,801,000 0.79 247,822
Total 30,533,000 0.78 763,276
Indicated EC-1 1,371,900 0.89 39,376
EC-2 2,144,800 0.83 57,024
Total 3,516,700 0.85 96,400

The Deposit is made up of two parallel horizons of strong alteration and deformation, the EC-1 and EC-2. These horizons contain "shoots" of significant gold mineralization. The EC-1 in this Report is the southern horizon and includes the previously known Main and Sanders zones which are on strike with each other and are connected by areas of low gold mineralization (see Figure 1). The EC-2 in this Report lies north of EC-1 and includes the previously referred North and East zones. These zones are also on strike with each other and are also connected by areas of lower grade gold mineralization. The EC-1 and EC-2 horizons appear to converge at depth into one wide zone of mineralization.

Table 2. Cut-off Sensitivities for the East Coldstream Deposit Resource Estimate
Class ID2 Cut-off
(Au g/t)
Tonnes Average Grade
(Au g/t)
Contained Ounces Au
Inferred 0.2 55,563,000 0.56 994,157
0.3 40,768,000 0.67 876,682
0.4 30,533,000 0.78 763,276
0.5 23,001,000 0.89 655,104
0.6 16,976,000 1.01 549,109
Indicated 0.2 5,814,100 0.63 117,672
0.3 4,514,500 0.74 107,522
0.4 3,516,700 0.85 96,400
0.5 2,807,200 0.96 86,194
0.6 2,251,400 1.06 76,383

A cut-off grade of 0.4 g/t gold was selected to tabulate the total resources based on the results of similar gold projects located in Ontario and Quebec. In addition, the following parameters were considered; 4:1 stripping ratio, operating costs of $14.30/tonne at 10,000 tonnes per day, long term gold price of $US1,139/troy ounce, $US to $Cdn conversion of 1.00, and gold recovery of 95%. The resources block considers the mineralization to start at surface down to a depth of 400 m vertical for the deepest zone.

Mineral Resources are not Mineral Reserves and by definition do not demonstrate economic viability.

Resource Classification and Description of Block Model

Several factors were considered in the definition of a resource classification including: National Instrument 43-101 requirements, Canadian Institute of Mining, Metallurgy and Petroleum guidelines, the report author's experience with Archean and Proterozoic gold deposits, and spatial continuity based on variography of the assays within the drill holes.

Individual block models were established in Datamine for the zones using one parent model as the origin. Drill hole spacing varies from 25 m to 50 m. A block size of 10 x 10 x 10 m was selected in order to accommodate the drilling spacing and the nature of the mineralization. Sub-celling of the block model was used to allow the parent block to be split once in each direction to more accurately fill the volume of the wireframes, thus more accurately estimate the tonnes in the resource.

The interpolations of the two zones were completed using the Inverse Distance Squared (ID2) estimation method. The global block model statistics for the ID2 model were compared to the Nearest Neighbour (NM) model and the Ordinary Kriging (OK) model. In general there is agreement between the three models and larger discrepancies were reflected as a result of lower drill density in some portions of the model.

A copy of the final Report will be filed on SEDAR within 45 days of the date of this news release.

To view Figure 1, visit the following link: http://media3.marketwire.com/docs/FDNfigure1.pdf

Qualified Person

Todd McCracken, P.Geo, is a Qualified Person ("QP") for purposes of NI 43-101. He is responsible for preparing the Report and the Resource Estimate disclosed in the Report. Mr McCracken is an employee of Wardrop, and independent from the Companies as described in section 1.5 of NI 43-101. He has read and approved the technical disclosure in this press release.

About the East Coldstream Gold Deposit

The East Coldstream Gold Deposit is only one of several areas of significant gold mineralization on the Coldstream Property. Other areas include Iris Lake, Span Lake, Goldie Zone and Burchell West. The Iris Lake area is located 1.5 north of the Deposit and drilling during the 2011 winter program intersected 8.39 g/t gold over 11 m (see news release dated March 22, 2011). Further drilling was carried out at Iris Lake as part of the recently complete 6,000 m summer program on the Coldstream Property. Results for the holes drilled in the Iris Lake area are pending.

The East Coldstream Deposit is hosted within mafic to intermediate metavolcanic rocks which have been intruded by dike/sill-like bodies of quartz-feldspar porphyries and gabbros. All these rock types have been variably altered (silica, hematite, carbonate, chlorite) and deformed by east- to east-northeast striking North Coldstream Shear/Deformation Zone. Gold is associated with 1 to 5 percent, fine-grained pyrite.

About the Coldstream Property

The 6,250 hectare Coldstream Property is located along the Trans Canada Highway 115 km west of the City of Thunder Bay, Ontario. The area is road accessible and has excellent infrastructure with a major power line and CN rail line passing just north of the property. Skilled labour is readily available locally.

For more details regarding the Coldstream Property, please visit our website at www.foundationres.com.

About Foundation Resources Inc.

Foundation is a mineral exploration company focused on exploration and development of gold and base metal properties in Canada and Mexico. Its flagship Coldstream gold project in the Shebandowan greenstone belt and Mitchell base metal property in the Birch-Uchi greenstone belt east of Red Lake occur within the Western Superior geological province of the Canadian Shield, noted for hosting prolific gold and base metal deposits in Ontario, Canada. The San Rafael gold-silver property is located approximately 150 km northwest of Durango in the Durango State, Mexico.

On behalf of the board,

Ike Osmani, President & Director

News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

CUSIP: # 350476107

ISIN CA3504761071

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

  • Foundation Resources Inc.
    Paul Chung, MBA
    CEO & Director
    604-681-0405
    604-687-4670 (FAX)
    info@foundationres.com

    Foundation Resources Inc.
    Ike Osmani, M. Sc, P. Geo
    President & Director
    604-681-0405
    604-687-4670 (FAX)
    info@foundationres.com
    www.foundationres.com

    Rain Communications
    Nelson Da Silva
    604-648-0523 (direct)

    Rain Communications
    Ralph Biggar
    604-306-2525 (direct)