Geo Minerals Ltd.
TSX VENTURE : GM
FRANKFURT : 8G3

Geo Minerals Ltd.

September 14, 2010 09:00 ET

Geo Minerals Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 14, 2010) - GEO MINERALS LTD. (TSX VENTURE:GM)(FRANKFURT:8G3) ("Geo" or the "Company") wishes to provide the following corporate update.

Vanderhoof Claims, B.C.

The Company recently announced the acquisition of the Vanderhoof claims (see news release September 8, 2010), located approximately 100 kilometres south of Vanderhoof, B.C. These claims border Richfield Ventures (V.RVC) and are within 2.5 kilometres, west-northwest, of recent drilling by Richfield on its Blackwater deposit property, where Richfield has reported that it intersected 281.8 metres at 1.4 grams per tonne gold in drill hole BW-71 (see Richfield news release September 2, 2010).

Management is currently discussing work programs for this property. This property acquisition is subject to TSX Venture Exchange approval and therefore work will not commence until after such approval.

Chilcotin Claims, B.C.

Management is also discussing work programs for the near future on its newly acquired Chilcotin ground (see news release September 8, 2010). This acquisition is also subject to TSX Venture Exchange approval and work would commence after such approval is obtained. These claims are adjacent to, and in the vicinity of, both Amarc Resources Ltd's. (V.AHR) joint ventured Newton Property as well as the Prosperity porphyry copper-gold deposit, which has recently received Provincial Government Mine Approval, and is owned by Taseko Mines, (T.TKO).

Scotia Property

Scotia is a volcanogenic massive sulphide property which covers 8,366 hectares and is located 42 kilometres southeast of Prince Rupert, in the Skeena mining district of British Columbia. The Scotia property is a poly-metallic zinc, silver, lead, copper and gold massive sulphide project and has incurred previous drilling over its known mineralized zone called the Albere zone. A resource estimate utilizing a 1-per-cent zinc cut-off for the Albere zone conducted by Giroux Consultants Ltd. is incorporated into a NI 43-101 report for Geo Minerals Ltd. (available at www.sedar.com) and announced by Geo Minerals via a news release in Stockwatch on January 11, 2010. The measured plus indicated resource within the mineralized shell is 802,000 tonnes grading 4.87 per cent Zn, 13.87 grams per tonne Ag, 0.53 per cent Pb, 0.09 per cent Cu and 0.17 g/t Au. The total measured plus indicated resource for the Albere zone was calculated to be 876,000 tonnes grading 4.35 per cent Zn, 12.29 g/t Ag, 0.47 per cent Pb, 0.08 per cent Cu and 0.15 g/t Au. The same resource estimate includes an additional 702,000 tonnes within the mineralized shell at the Albere zone classed as inferred grading 4.47 per cent Zn, 13.74 g/t Ag, 0.45 per cent Pb, 0.10 per cent Cu, and 0.19 g/t Au. No economic parameters have been defined by the current resource estimate as to an appropriate cut-off for various types of mining. The Albere zone is open on strike to the northwest and open down-dip to the west. An airborne geophysical survey performed over the property during 2008 detected five new primary anomalies similar to the Albere zone and 10 additional secondary anomalies.

On July 9th, 2010, the Company entered into an option agreement with Hawkeye Gold & Diamond Inc. (V.HGO), whereby Hawkeye can acquire up to a 60% interest in Scotia upon the issuance of 1,000,000 shares and payment of $210,000 to Geo as well as incurring expenditures of $1,200,000 over three years on the property to earn a 51% interest and thereafter, can earn the remaining 9% interest by the issuance of an additional 500,000 shares plus incurring $500,000 in expenditures on the property until a positive bankable feasibility study is completed. This is still subject to TSX Venture Exchange approval. 

Hawkeye may carry out a work program on the property this month should Hawkeye get TSX Venture Exchange approval of the deal.

Middle Mountain, Arizona

Two holes have been drilled to date as part of a program to drill three test holes of 600 metres each (see news releases May 11, 2010 and June 30, 2010). The results from these drill holes did not warrant either of these cores being sent to the lab. It is anticipated, however, that drilling of the third planned test hole will resume shortly once a new drilling contract is secured.

The Company has granted Inmet Mining Corporation (T.IMN) the option to earn a 70% interest in the Company's Middle Mountain claim group as well as a 70% interest in the Company's Red Hills claim group, both located in the Globe-Miami district of Arizona by making cumulative cash payments of $675,000 and exploration expenditures of $2,000,000 over 5 years on each of the projects. (See news release November 17, 2009 for details of the option agreement.) The drill program was budgeted by Inmet and forms part of the exploration expenditures to be incurred as part of the option agreement.

Red Hills, Arizona

The Company completed a geophysical survey on the Red Hills property in May 2010 (see news release May 11, 2010). Upon completion of the current program at Middle Mountain, crews will mobilize and begin a program at the Red Hills property at which time program details will be announced. 

The Red Hills property is also subject to an option agreement with Inmet Mining Corporation (see news release November 17, 2009). 

Silver Bell, Arizona

The Company completed its first phase of drilling at the Silver Bell West property in June 2010 (see news releases May 25, 2010 and June 24, 2010) and the mineralization and alteration observed in drill holes SB-1 and SB-2 were considered to be consistent with the possibility that base and precious metals-bearing veins may exist at depth. Assays of the core indicate that elevated base metal values are present in some intervals, but low overall values indicate that this target is not worth further pursuit. The primary target of base and precious metals mineralization has not been drilled, which is potential skarn mineralization on the western portion of the property where the quartz monzonite would be in contact with reactive sedimentary rock at depth.

The Company has a lease/option agreement with Bronco Creek Exploration for the Silver Bell property, pursuant to which the Company is required to incur $2,000,000 in work expenditures, pay cumulative advance royalty payments of $705,000, and issue 800,000 common shares over a five-year term. A royalty of 2.5% is included, with a provision to buy back 0.5% for $1,000,000 on or before the seventh anniversary. (See news release August 27, 2009 for the terms of acquisition.) 

The Company is currently assessing its options on the Silver Bell property.

Copper Springs, Arizona

The Company also has a lease/option agreement with Bronco Creek Exploration for the Copper Springs property, pursuant to which it is to incur $2,750,000 in work expenditures, pay cumulative advanced royalty payments of $505,000, issue a total of 3,000,000 common shares plus issue 1, 200,000 share purchase warrants over the 5 year term of the agreement. A royalty of 2.5% with a provision to buy back 0.25% for $1.5 million anytime before a feasibility study and a further 0.25% buy back for $3.5 million any time prior to production will apply. (See news release August 27, 2009 for the terms of acquisition.) 

Drilling carried out on the property last winter encountered native copper in conglomerates (see news release February 4, 2010) and results from the drilling assays were announced on June 7, 2010. 

The Company is currently assessing its options on the Copper Springs property.

Saskatchewan Coal

The Company has released all of its interests in the coal properties located in Saskatchewan and is no longer pursuing those interests.

Financing

The company has arranged a non-brokered private placement of up to 10 million flow-through units at a price of five cents per unit for gross proceeds of up to $500,000.

Each unit consists of one flow-through common share and one-half non-flow-through common share purchase warrant. Each full warrant will entitle the holder to purchase an additional share at a price of 10 cents per share for a period of 24 months from the date of issuance.

The proceeds from the private placement will be used for work programs in British Columbia and is subject to acceptance for filing by the TSX Venture Exchange.

The technical contents of this release were approved by Technical Advisor to Geo Minerals and qualified person as defined by National Instrument 43-101, Dr. Tom E. McCandless, P. Geo.

Finders' fees may be payable on the private placement. Geo Minerals is a junior exploration company actively seeking mineral opportunities for the benefit of all its stakeholders. For further information we invite you to visit us at www.geominerals.ca.

ON BEHALF OF THE BOARD, 

Michael England, President

Neither 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

  • Geo Minerals Ltd.
    Michael England
    President
    1-604-683-3995 or Toll Free: 1-888-945-4770
    1-604-683-3988 (FAX)
    www.geominerals.ca