August 31, 2010 15:32 ET

J.A.G. Mines Ltd.: Fourth Year of Oil and Gas Research Program Completed on the Temiscouata Property

MONTREAL, QUEBEC--(Marketwire - Aug. 31, 2010) - J.A.G. Mines Ltd (JAG) (TSX VENTURE:JML) and Olitra Inc. announces that it has completed the fourth year of its oil and gas research program on its Temiscouata Property (Quebec), during which were performed a regional soil gas survey, gravimetric, radiometric and electrical conductivity surveys and geochemical and Rock Eval analyses on sedimentary rock samples. Surveys were conducted in the eastern part of the property which was not covered by earlier work. The gravimetric and electrical conductivity surveys are not published yet but should be soon.

Since the end of 2006, JAG is actively researching oil and gas in Lake Temiscouata area, where it holds nine research permits covering 193,587 hectares. JAG has developed a comprehensive two Phases research program which can be consulted on SEDAR. In Phase 1, JAG has chosen to use a step by step integrated interdisciplinary approach combining geology, subsurface geophysics, soil gas and other surface geochemical exploration methods, in order to determine the petroleum-generative potential of the sedimentary rock sequence and identify the surface expression of eventual hydrocarbon-induced soil and sediment alterations. Collected results during Phase 1 should enable JAG to define targets before conducting more detailed research and more conventional surveys during Phase 2.

Promising results obtained by JAG in 2008 and 2009 with its two previous soil gas surveys, conducted in the western part of the property, have brought JAG to use again this exploration method in the eastern part of it. So, JAG has conducted a third survey on research permits PG2006-851, 852 and 853 including analysis of 620 soil gas samples collected along twenty road sections of various lengths and orientations. The survey allowed location of soil gas anomalies located in and nearby the ZEC Owen area, where ethane and methane levels reach more than 1,000 ppb and more than 50,000 ppb respectively in 32 and 34 samples. Indeed, the highest ethane content obtained for a sample coming from the eastern part of the property is 17,713 ppb and the highest methane content, 1,017,861 ppb. The most interesting anomalies are located in the Lake Ango and Lake Asselin area. Soil gas anomalies appear to be controlled by late structures since they are preferentially located in NW-SE topographic lows perpendicular to the regional structural trend.

A thermogenic origin of soil gases is indicated by [methane / (ethane + propane)] ratios. Despite the relatively high level of thermal maturation of the organic matter contained in sedimentary rocks located in this part of the Appalachian Belt, the [methane / (ethane + propane)] ratios further suggest two sources for the soil gases: condensates for the central and southern parts of the ZEC Owen and natural gas for its northern part.

JAG has also conducted a regional radiometric survey (%K, eTh, eU) over the ZEC Owen area which has allowed identification of U and K anomalies. Like in the western part of the property, some of these radiometric anomalies roughly overly soil gas anomalies and may have been developed by hydrocarbon microseepage.

Locally dolomitized stromatoporoid reef limestone, likely part of the Chaleurs Group, was identified and sampled in the ZEC Owen area. These limestones were probably part of the reef belt present on the edge of the Silurian continental margin and could represented a possible hydrocarbon trap. Thus, the results obtained so far suggest the following model: (1) not found yet, potential source rocks may have been located in the underlying Ordovician sedimentary rocks, (2) reef limestone of the Chaleurs Group could represent a possible trap for hydrocarbon migrating from the Ordovician rocks towards the surface, and (3) this possible Silurian carbonate trap would have been thrusted by Devonian mudstone and shale of the Temiscouata Formation, where hydrocarbon microseepage was lately developed along fracture zones. Observed gas anomalies in soils overlying the Temiscouata sedimentary rock Formation may be the result of this whole process.

In the fourth year of its exploration program, the Company has invested some additional $ 390,000, bringing its total investment on Temiscouata Property at a million dollars. The Temiscouata Property is part of the Appalachian sedimentary basin (Lower St.Lawrence – Gaspé). Geology of the Temiscouata area is little known compared to that of the Gaspé Peninsula and the area remains largely unexplored for oil and gas. However, promising results obtained so far encourage JAG to carry on its research program.

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