Icon Industries Limited

Icon Industries Limited

March 02, 2009 09:00 ET

Icon Announces an Agreement to Option the Hog Ranch Epithermal Gold Project, Nevada, USA

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 2, 2009) - Icon Industries Limited ("Icon" or the "Company") (TSX VENTURE:ICN) is pleased to announce that it has entered into a letter of agreement with Seabridge Gold Inc. ("Seabridge") (NYSE Alternext US:SA) and its wholly-owned subsidiary, Seabridge Gold Corporation, for the acquisition by Icon of an option to acquire a 100% interest in Seabridge's claim groups known as the Hog Ranch and Estill property (the "Property"), located in Washoe County, northwest Nevada, USA. The property comprises 238 unpatented lode mining claims that cover approximately 4917 acres (1990 hectares), and a mining lease with Estill Ranches LLC ("Estill") on approximately 592 acres (239.6 hectares) of privately owned fee land. The property is subject to the following annual fees and royalties:

- A 3% net smelter royalty (NSR) is due to Platoro West Inc. ("Platoro") on production from the unpatented lode claims when gold is under $300 (US) per ounce, rising to 5% above $500 per ounce, 40% of which can be purchased by the property owner at any time for $2 million

- An advance royalty is due to Platoro of $20,000 (US) per annum, due in November

- Holding costs of approximately $30,000 (US) per year to the Bureau of Land Management

- Under the terms of a 20 year lease on the Estill claims which commenced on October 1, 2004, annual payments of $20 (US) per acre (total approximately $12,000) are due to Estill until 2009, subsequent to which payments of $30 (US) per acre are due

- Payment to Platoro a further $250,000 (US) in cash upon the earlier of (i) confirmation by an independent third party of a measured and indicated gold reserve of more than 1.0 million ounces, or (ii) completion of a positive bankable feasibility study which demonstrates a mine capable of producing at least 100,000 ounces of gold per annum

The transaction calls for the payment to Seabridge of $500,000 (CDN) and the issuance of 1 million common shares of the Company, upon which Seabridge shall grant the Company the option to purchase 100% of Seabridge's right, title and interest in the property. In order to exercise the option, the Company must pay Seabridge $525,000 (CDN) and issue 1 million common shares on or before 12 months from receipt of acceptance by the TSX Venture Exchange. The agreement is subject to the completion of financial, legal, and technical due diligence on the property; conclusion of a definitive agreement within 45 days and acceptance by the TSX Venture Exchange.

The Hog Ranch Property is a large gold-bearing hydrothermal system which is the westernmost of a series of gold deposits in the northern Nevada epithermal district, which includes bonanza grade gold deposits such as the Sleeper Mine (approximately 1.7M oz. production), Midas Mine currently operated by Newmont Mining with 1998 historic pre-mining reserves of 2.7 million tons grading 1.115 oz/ton Au and 12.82 oz/t Ag (Goldstrand and Schmidt, 2000) and Great Basin Gold Ltd's Hollister deposit (NI43-101 compliant reserves of 1.28 million tons grading 0.90 oz/ton gold and 4.8 oz/ton silver; Feb. 23, 2009 news release). The Midas reserves are historic and are believed reliable, but cannot be verified. The deposits are related to the northern Nevada Rift system, a series of faults associated with 17 to 14 million year old Miocene age volcanism that are associated with the Yellowstone hotspot.

Gold was first discovered at Hog Ranch in 1980 by Noranda Exploration, Inc. Subsequent explorers focused on open-pit deposits amenable to heap leach processing, which led to a production decision in 1986 by Western Goldfields. In 1988, Western Mining Corporation purchased the property and continued mining until 1993 when the mine was shut down. Total gold production during operations was approximately 200,000 ounces (6.22 tonnes) of gold from 7.71 million tonnes of ore that was derived from six separate open pit deposits with an average grade of 1.24 grams per tonne (g/t) gold. Final reclamation from the mining operations has been recently completed and approved.

The property still contains two deposits which were not mined by Western Mining which contain historical resources: the White Mountain deposit, containing 1.45 million tonnes grading 1.13 g/T gold, and the Airport deposit, containing 0.4 million tonnes grading 1.85 g/T gold. These resources are of a historical nature, are not in compliance with Canadian Institute of Mining, Metallurgy and Petroleum standards, and consequently should not be relied upon. In 1996 Cameco U.S. Ltd, continued exploration for the same target type - shallow, oxidized deposits amenable to heap leach processing - and discovered a further zone of mineralization for which no resources have yet been estimated. Drill hole intercepts there included 16.8 m grading 1.7 g/t gold, 7.6 m grading 3.53 g/t gold, and 6.1 m grading 57.9 g/t gold, although follow up drilling the following year by Gold Valley Resources failed to reproduce the latter result. True widths of these intercepts have not been determined.

Despite extensive drilling to define the shallow, low grade open pit resources, only a small proportion of drill holes were drilled to a depth greater than 200 meters on the property prior to 2001. The shallow drilling did not systematically test the potential for the discovery of high-grade gold mineralization associated with the high-angle, structurally-controlled feeder zones, such as is seen below near-surface low grade mineralization at the Midas, Sleeper, and Hollister deposits. Recognizing this potential, Seabridge Resources optioned the property in 2001, and drilled eight holes which followed up several previous holes that were drilled beneath two of the past producing pits, and along their strike extensions which had historically intersected gold values ranging from trace up to 177 g/t of gold. The program was successful in intercepting two different structures containing high-grade gold with a best intercept of 0.76 m grading 19.9 g/t gold, however, the deepest angled drill hole of their limited program was only 146 m, in which high-level silica textures, clay mineralogy and Au-Sb-As geochemistry still suggested a greater target depth.

The property was subsequently optioned to Romarco Minerals in 2003, who drilled 725 m in 3 Rotary Percussion holes in 2004. Results included 6 meters grading 13.1 g/t gold, 1.5 m grading 28.7 g/t, and 1.5 m grading 17.2 g/t gold (true widths unknown). A second phase program of six core holes (1,398 m) included 1.5 m that assayed 15.3 g/t gold, as well as numerous broad zones of lower grade gold mineralization. For example, HR 04-9, intercepted 10.7 m of 1.08 g/t and a separate interval of 25.9 m of 0.42 g/t gold (true widths unknown). Other Romarco drill hole results ranged from trace to the values discussed. Romarco relinquished their option on the property in 2005 to focus their exploration activities on other projects. No work has been done on the property since that time.

Icon Industries believes that the Hog Ranch property contains high exploration potential for the discovery of bonanza-grade epithermal gold mineralization comparable to that seen in other deposits of the northern Nevada epithermal district. The low grade and high level style of mineralization which was historically mined is comparable to that seen above many higher grade systems, including the Hollister deposit. The previous drilling results, and other high grade intercepts which lie beneath the historically mined pits, also indicate the potential for bonanza grade styles of mineralization, and the local occurrence of chalcedonic banded quartz-adularia veins intersected in some drill holes and pits are of the style seen in upper parts of productive epithermal vein deposits.

Icon intends to continue exploration on the property by initially reviewing and modeling of the exploration and historical mining data generated to date, and to conduct additional surface mapping of structural patterns and alteration zonation, which may help in the identification of potential faults that could host, or control deeper vein systems. Once prospective areas are better defined, ground geophysical surveys, particularly resistivity/induced polarization, which have been proven to be useful in aiding in targeting for veins in similar large alteration systems, will be undertaken, followed by drilling. Initial targets will be in the vicinity of historical mining and resources, however, given the large, greater than 50 km2 size of the zoned alteration system, and the restriction of past drilling largely to the deposit areas, the company believes additional targets may be defined during the program.

The technical information in this news release was reviewed by K. Ross, P.Geo., a Qualified Person as defined by N.I. 43-101.

A Finder's Fee is payable on the transaction based on the appropriate TSX Venture policy.

On behalf of the Board of Directors of Icon Industries Limited.

T. Barry Coughlan, President

Certain matters discussed in this press release may contain forward-looking statements. Investors are cautioned that all statements, other than statement of historical fact, involve risks and uncertainties, including but not limited to: exploration and mining risks and financing risks. There can be no assurance that such statement will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Investors are encouraged to review ICON's filings on SEDAR at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Icon Industries Limited
    T. Barry Coughlan
    Office: (604) 685-8666 or Cell: (604) 644-9561
    (604) 685-8677 (FAX)
    Website: www.iconindustriesltd.com