Kokanee Minerals Inc.

September 15, 2010 21:15 ET

Kokanee Minerals Inc.: Jackson Gold Project in the Bulyanhulu Region of Tanzania

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 15, 2010) - KOKANEE MINERALS INC. (TSX VENTURE:KOK). (the "Company") reports that it entered into an Option Agreement with Jackson Mpemba Nkwabi, Jumanne Kasonzo and J.J. Kasonzo & Nkwabi, Investment Ltd. (collectively, the "Optionor") for the grant of an option to purchase up to a 100% interest in the Jackson Gold Property (the "Property") with high grade gold prospects in the Bulyanhulu -Geita Area of Tanzania.

Company President Abby Farrage states, "We have an opportunity on this property to develop its potential in one of the world's most emergent gold districts. In the 1990's Tanzania only had approximately 1 million ounces of known gold reserves, now it has over 50 million ounces of reserves, placing it in third place in the African gold producing countries behind only South Africa and Ghana. Tanzania, even in this region of known mines has not been subjected to modern exploration methods. Kokanee through this acquisition and involvement in Tanzania has a significant corporate presence that will enable it to have substantial growth."

Pursuant to the Option Agreement, the Company will be acquiring the option for an initial 51% interest in the property for a total of US$375,000 to be paid in 3 instalments, with the final instalment to be paid on or before 180 days after TSX Venture Exchange approval of the Option Agreement. As well the Company, will undertake as part of its option to acquire its interest in the Property, to provide equipment to enable the Tanzanians to continue their small scale mining operations permitted under their Primary Mining License (PML). The Company's onsite consultant will monitor this operation to establish a more scientific recovery report.

The Company also has a further option to purchase an additional 29% interest in the property for an aggregate 80% interest by issuing 3 million common shares and paying an additional US$400,000 cash over on or before 2 years after TSX Venture Exchange approval.

Upon acquiring the 80% interest, the Company may also acquire an additional 15% interest in the property by making the following payments: US$750,000 for the first 5% interest, US$1,000,000 for the next 5% interest and US$1,250,000 for the final 5% interest. The Company will than have an option to convert the remaining 5% interest to a 1.5% net smelter return ("NSR") royalty in favour of Kokanee by paying an additional US$3,000,000 to the Optionor.

The initial property consists of one 49 km2 PML that covers the area of the operation. The PML will be converted to a Prospecting Licence ("PL") to be registered jointly in the names of the Company and Kokanee. The PML properties have had local Tanzanians, under the direction of the property owner digging by hand and chisel into the gold bearing formation, for the last 5 years. The rock material is processed mainly by hand, with some by a small ball mill type crusher, then by gravity water sluice box and final hand panning methods to recover the gold. They have reported recovering over 100 grams of gold per 25 kilogram bag of recovered rock (Approximately 40 bags of recovered rock would equal a tonne). The Company has no independent verification of this grade or recovery but a director of the Company, Laurence Stephenson, P.Eng., a geologist was able to estimate the amount of material processed and the size of the gold nuggets visible here suggests a high grade zone warranting further investigation. The local miners encountered water problems and because of the lack of equipment cannot continue their bulk sampling program.

In anticipation of completing the option, the Company has engaged Dr. Mathew Ball to complete a NI 43-101 compliant report. Dr. Ball visited the property in February 2010, to inspect the artesianal operations to review the geology and gather the information needed for his report.

The Company as part of its option and supplying the equipment during the earning of that initial 80% interest will be entitled to 70% interest in any recovered gold over the first 6 months of operations.

Kokanee Minerals Inc is new junior company with a seasoned board which will be able to develop projects in British Columbia, North Eastern Nevada, USA and in Tanzania.

This release has been reviewed by William Timmins PGeo. the designated Qualified Person for this project.

On behalf of the Board of Directors

Souhail Abi Farrage

President and Director

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

  • Kokanee Minerals Inc.
    Souhail Abi Farrage
    President and Director
    Kokanee Minerals Inc.
    Head Office Address
    809 27 Alexander Street,
    Vancouver, BC V6A 1B2