Matamec Explorations inc.
TSX VENTURE : MAT

Matamec Explorations inc.

July 16, 2009 15:10 ET

Matamec Releases NI 43-101 Technical Report on its Zeus Rare Earth Elements-Yttrium-Zirconium Property Containing the Kipawa Deposit

MONTREAL, QUEBEC--(Marketwire - July 16, 2009) - Matamec Explorations Inc. (TSX VENTURE:MAT) ("Matamec") is pleased to announce that it has received the NI 43-101 technical report titled "Technical Report on the Rare Earth Elements-Yttrium-Zirconium Zeus Property, Kipawa Alkaline Complex, Temiscamingue, Quebec for Matamec Explorations Inc." from Alex Knox, Leslie Heymann and Frederic Fleury, filed on SEDAR and Matamec's websites (www.matamec.com/Properties/Zeus).

This independent NI 43-101 report, together with SGS Geostat Ltd. independent re-sampling of four of Unocal Canada Ltd. (Unocal) thirteen historic trenches (see press release on June 30th, 2009), prepare the way for the planned NI 43-101 compliant resource report on the Kipawa Deposit. The next step towards that goal will be the proposed 2,000 metres HQ drilling program, which will establish Rare Earth Elements (REE) resources as well as verify the quantity and the quality of historic Y and Zr resources (including the possibility of increasing these resources). Following this program, Matamec will probably be able to begin a prefeasibility study on the Kipawa Deposit. This study will aim to continue the mineral processing and metallurgical testing begun in 1990, to verify the possibility to produce a mixed REE oxide concentrate, or, if economically viable, to produce individual REE oxide concentrates. It should be noted that, due to its favourable location, an open pit method of mining was contemplated for this deposit in 1990.

In addition, a possible short on the world supply of heavy REE (HREE) such as Terbium (Tb), Dysprosium (Dy) and associated Yttrium (Y), has been forecast for 2014 by end users as well as by Dudley J. Kingsnorth ("The Rare Earths Market: Can Supply Meet Demand in 2014?", PDAC, March 2009). As noted by Ron Mandel reporting points from D. J. Kingsnorth in "Rare earth metals: on the cusp of a rally?" (Northern Miner, June 22, 2009), the time estimate to bring a REE project to production is in the range of four to eight years. In view of the favourable REE distribution emphasizing HREE in the Kipawa Deposit (see Table 2) and considering both the work done on the deposit between 1985 and 1991 by REE companies such as Unocal and Molycorp and exploration work done by Matamec since 2007, Matamec believes that it is possible to complete the process for a 2014 deadline.

NI 43-101 Technical Report's Summary

Authors

The first author Alex Knox (M.Sc., P. Geo) led the 1986 to 1990 Unocal exploration campaigns and was involved as a geologist during the 1988 drilling campaign. The second author Leslie Heymann (P. Eng.) has expertise in chemical engineering and rare earths extraction processes. The last author, Frederic Fleury (B.Sc., Geo), led Matamec's 2007 and 2008 exploration campaigns on the Zeus property. His team discovered four new REE-Y-Zr showings.

Location

The 100% owned Zeus property is located in the Temiscamingue region of Quebec (see Figure 1: Location map), some 140 km south of Rouyn-Noranda, 50 km west of the town of Temiscaming and 90 km northeast of North Bay, Ontario. The property totals 15,244 ha in area and covers part of the Kipawa Alkaline Syenite Complex. The property includes the partially drilled Kipawa Deposit, site of an historic Y and Zr resource calculation by Unocal circa 1990.

Figure 1. Location Map: http://media3.marketwire.com/docs/fig1-eng.JPG

Logistics

Area topography is characterized by small hills with a total relief of about 100 m, while vegetation consists of a mixed forest which has been partially logged. Bedrock can be found under a moderate amount of overburden (0-30 m.). Access to the property via Temiskaming, Bearn or Val d'or is provided by a network of logging roads of variable quality. These towns are all connected by well maintained paved roads. In addition, Temiscaming is linked to North Bay and Sudbury via a railroad operated by the Ottawa Valley Railway Company.

Geology

The Zeus property covers most of the Kipawa Alkaline Complex (KAC): a concordant folded sheet of mildly peralkaline syenite and granite less than 200 m thick (see Figure 2: Geology and historical mineralization on the Zeus property). The KAC lies entirely in metamorphosed Precambrian gneiss of the Grenville Province, between a paragneiss unit and a quatzofeldspathic gneiss unit acting as the footwall. The KAC has been divided into two main units in the mineralized zone: a peralkaline granite gneiss unit and a syenite gneiss unit (with calc-silicates rocks interlayered within the syenite gneiss). The numerous REE-Y-Zr showings doting the property are centered in and around those syenites.

Figure 2. Geology and historical mineralization on the Zeus property: http://media3.marketwire.com/docs/fig2-eng.JPG

Project History

Exploration was initiated in the region after gold-uranium mineralization was found in 1957 at Hunter's point by Hollinger Quebec Exploration Co. Ltd. (Hollinger), some 26 km northwest of the Zeus property (best value of 0.97% U and 10 g/t Au over 22.5m of channel sampling). Subsequent exploration, along with the recognition of the KAC which underlies part of the Zeus property, can be divided in three broad periods.

Prior to 1985, most of the exploration work was oriented towards uranium and was concentrated near Sheffield Lake. Though only sporadic U values were discovered during this period, most notably on the Valdez-Nuspar Zone (0.07% U over 2 metres), REE minerals were identified by Hollinger, Imperial Oil and Sturdy Mines in the area east of Sheffield Lake while Valdez Resources and Nuspar Resources identified REE mineralization on the Valdez-Nuspar Zone, south of Sheffield Lake.

From 1985 to 1992, exploration focused on mineral containing rare metals. This wave of exploration was initiated by a study by Dr. Mariano (1985) on the presence of yttrium in eudialytes from varied geologic environments. The main interest in yttrium-bearing eudialyte came as a consequence of the discovery of ion-adsorbed Y and REE in the South China clays which had a profound effect on the sources and world market price of these elements. It was believed that easily-dissolved Y and REE in eudialyte would be a source that could compete economically with the south China clays. Unocal and its subsidiary Molycorp, owner of the Mountain Pass REE deposit in California (USA), were the sole claim owner and operator of this period.

Exploration work conducted by Unocal concentrated on three mineralized zones, which they identified as the Main Zone (identified here as the Sheffield Zone), the PB-PS Zone and the KR Zone (identified here as the Valdez-Nuspar Zone). Unocal's goal was to evaluate the Y-Zr potential of the property, including a general evaluation of its lanthanide potential. Exploration work included:

- Geological mapping, rock chip sampling, airborne radiometric-magnetic-VLF surveys on the KAC and adjacent metasediments, ground radiometric and magnetic surveys, a soil geochemical survey;

- Thirteen 100-meter overburden trenches were dug and channel-sampled on the Kipawa deposit in 1990 for a total of 666.5 meters sampled.

- Diamond drilling, mainly on Sheffield Zone (1988: 12 DDH on 980 m and 1990: 27 DDH on 1531 m, for a total meterage of 2,511 m; and 5 DDH on the PB Zone on 464m);

- A study of the yttrium-bearing minerals undertaken by Dr. Mariano;

- Six 300 to 800 lbs bulk samples and four 50 lbs bulk samples were also blasted from the trenches. Four of those samples were sent to Mountain States R&D International Inc. for preliminary metallurgical testing;

- These DDH, channel and bulk samples allowed Unocal to realize a first resource calculation on the Kipawa Deposit.

From 2001 to 2009, exploration work was oriented towards diamonds, uranium, uranium-gold, gold and REE-Y-Zr. Presently, the main exploration players in the KAC are Aurizon Mines Ltd. (Aurizon) and Matamec. Since 2005, Aurizon has announced that it delineated four gold dispersal trains following a till survey (till up to 16.9 and 100 g/t Au) and discovered the Eagle and Snake REE showings. Aurizon carried out a drilling program during the summer of 2008, mainly for gold, uranium and REE mineralization. Four DDH targeted the Snake REE Zone with the best intersection consisting of 38.1 m at 0.074% REE+Y. Since 2007, Matamec continued exploration work begun on the mineralized zones discovered in past, mainly the Sheffield Zone, and discovered in 2008 four new REE-Y-Zr zones, namely the Couleuvre, Falaises, TH and Surprise showings.

Mineralized Zones

Seven REE-Y-Zr mineralized zones and showings are located on the property: the Sheffield zone, PB-PS, Valdez-Nuspar (eastern extension-last 600 m included in the Zeus property) and the Couleuvre, Falaises, TH and Surprise showings (see Figure 2: Historical mineralization).

Sheffield Zone (also known as the Kipawa Deposit)

The Sheffield Zone is the best mineralized of the existing zones and was defined over a length of 1,300 m with a width ranging from 10 to 80 m. The main characteristic of the zone is its three types of mineralization. From the upper syenite portion to the lower calc-silicate dominant part of the calc-silicate/syenite complex (see Figure 3: Sheffield Zone - Schematic cross section), we find an eudialyte dominated zone (REO Wt: up to 10%), then a mosandrite/yttro-titanite dominated zone (REO Wt: up to 65%) and finally a britholite dominated zone associated with the lower calc-silicate rocks (REO Wt: up to 62%). Zr is generally more uniformly distributed than Y in the Sheffield zone and occurs in some horizon independent of Y and REE. REE mineralization features enrichment both in LREE and in HREE and shows well-crystallized medium grains which are amiability to physical separation and easy chemical dissolution.

Figure 3. Sheffield Zone - Schematic cross section: http://media3.marketwire.com/docs/fig3-eng.JPG

Y and Zr mineralization on the Sheffield Zone has been the subject of an historical resource calculation which returned 2.27 Mt grading 0.11% Y and 0.78% Zr (see next section for details). It should be noted that REE content was not systematically measured in drill holes at the time since the main element considered was yttrium. REE mineralization is therefore known through the analysis of bulk samples. Four of these were analyzed for Y, Zr and Ce and three were analysed for Y, Zr and REE as shown in the following tables:



Table 1: Summary of Unocal bulk samples (%)
-----------------------------------------------------------
Location Sample Weight
number in kg Y% Ce% REE% Zr%
-----------------------------------------------------------
West Zone 88-K-1 20 0.53 - 0.86 -
-----------------------------------------------------------
90KBS-1 350 0.53 0.33 - 1.2
-----------------------------------------------------------
88-K-3 20 0.51 - 1.41 -
-----------------------------------------------------------
Central Zone 90KBS-3 350 0.25 1.01 - 0.32
-----------------------------------------------------------
90KBS-5 350 0.41 1.01 - 0.95
-----------------------------------------------------------
East Zone 88-K-4 20 0.23 - 1.75 -
-----------------------------------------------------------
90KBS-2 350 0.24 0.62 - 0.42
-----------------------------------------------------------



Table 2: REE distribution for three Unocal bulk samples
------------------------------------------------------------
Rare Earth 88-K-1 88-K-3 88-K-4
Elements (ppm) (ppm) (ppm)
------------------------------------------------------------
Trench # 1 2c 3
------------------------------------------------------------
Mineralized Zone Eudialyte Mosandrite/ Britholite
Yttro-titanite
------------------------------------------------------------
Y: Yttrium 5300 5120 2280
------------------------------------------------------------
La: Lanthanum 1280 2130 4600
------------------------------------------------------------
Ce: Cerium 2280 4640 7820
------------------------------------------------------------
Pr: Praeseodymium 330 660 830
------------------------------------------------------------
Nd: Neodymium 1200 2490 2490
------------------------------------------------------------
Sm: Samarium 340 690 430
------------------------------------------------------------
Eu: Europium 50 85 45
------------------------------------------------------------
Gd: Gadolinium 430 690 260
------------------------------------------------------------
Tb: Terbium 85 170 70
------------------------------------------------------------
Dy: Dysprosium 870 1050 350
------------------------------------------------------------
Ho: Holmium 175 260 85
------------------------------------------------------------
Er: Erbium 700 700 260
------------------------------------------------------------
Tm: Thulium 90 90 35
------------------------------------------------------------
Yb: Ytterbium 700 440 180
------------------------------------------------------------
Lu: Lutetium 90 55 25
------------------------------------------------------------
Th: Thorium 60 530 1,760
------------------------------------------------------------


In addition, on June 16th, 2009, Matamec received SGS Geostat independent report on the re-sampling of four of Unocal's thirteen historic trenches (see Matamec's press release on June 30, 2009). These four channels were reproduced by Matamec in order to verify previous historic results and to test REE distribution over their entire length. Two trenches tested the width of the Western Sheffield Zone (trenches T-1 and T-3), one tested the Eastern Sheffield Zone (trench T-8) and the last tested the zone between the two which has no calculated historic resources (trench T-11). It should be noted that on trenches T-8 and T-11, sites of 3 historic blast sites (KBS-2, KBS-3 and KBS-5), could not be re-sampled due to highly-irregular trench floors (total length of 5 m in T-8 and 20 m in T-11, see Table 1 for those intersections). Results are presented in Table 3 (for sampling Quality Control and selection of the most appropriate analysis method, see SGS report, appendix III to the NI 43-101 technical report).

Table 3: Summary of 2008 channeling results (%), averaged by trench

Table 3 is available at the following address: http://media3.marketwire.com/docs/tab3-eng.pdf

Y and Zr Historic Resources on the Sheffield Zone

In terms of historic resources, the Sheffield Zone is composed of the West Main Zone (1.26 Mt @ 0.15% Y2O3 and 0.96% ZrO2) and the East Main Zone (1.009 Mt @ 0.14% Y2O3 and 1.17% ZrO2). Please note that as a qualified person has not done sufficient work to classify the historical estimates as current mineral resources, the issuer is not treating the historical estimates as current mineral resources and the historical estimates should not be relied upon.

Unocal's drill holes were designed to be short and only a few penetrated into the lower calc-silicate dominant part of the unit (12 DDH on a total of 34) and none tested the down-dip extension of the deposit at depth (i.e. towards the south-west).

In addition, the central part of the Sheffield Zone, 620 metres long, has been trenched (1990) and drilled (1988) only at very wide spacing and therefore has no established resources. However every drill hole and trench in this zone contains mineralization of potentially economic grade and width. In addition,

For the 1990 resource calculation, J.F. Allan, a geologist contracted by Unocal and Molycorp, used the homogeneous block method based on channelling and drilling assays. Each homogeneous block is based on surface sampling from one trench and core sampling from 2 or 3 underlying drill holes at a spacing of 50-75 metres. Due to its favourable location, an open pit method for the mining of yttrium mineralization was contemplated at the time.

The Kipawa deposit is presently considered open both laterally and at depth.

Metallurgy conclusion on the Sheffield Zone

According to Leslie Heymann, REE mineral processing expert, the Kipawa deposit is a potential source of heavy rare earths. It will compete with the South China clays and the dissolution of Xenotime at the high value end of the rare earth market. If the liquid/solid separation step can be solved, it is anticipated that production costs per kg of rare earth oxide produced will fall somewhere between those of the two processes identified above.

Six other REE-Y-Zr zones and showings found to date

As well as the Sheffield zone, six other REE-Y-Zr mineralized zones are located on the property: PB-PS, Valdez-Nuspar (eastern extension-last 600 m included in the Zeus property) and the Couleuvre, Falaises, TH and Surprise showings (see Figure 2: Historical mineralization). Exploration by Unocal to the end of 1990 delineated two zones of Y and Zr mineralization: PB-PS and Valdez-Nuspar. The PB-PS zone rest at the base of the KAC, in syenite gneiss and calc-solicate rocks, while the Valdez-Nuspar zone is thought to be a sill intruding the overlying metasedimentary gneiss. The mineralized zones are conformable with the layering of the enclosing rocks.

The PB Zone is located 2.5 km south-east of the Sheffield Zone and corresponds to a radiometric anomaly caused by boulders and fine fraction of till containing britholite enriched in thorium. Two of the five holes drilled in 1990 nearest to the Kipawa River intersected significant Y and Zr values contained in a fairly thick calc-silicate horizon. As for the PS Zone, it is located on the north of the Kipawa River, facing the PB Zone. It too corresponds to a boulder field, though of a more syenitic nature.

The Valdez-Nuspar Zone consists of a series of east-west sills on the south shore of the Kipawa River, 2 km south-east of the PB and PS Zone. The presumed eastern extention of those sills, as defined by one of Nuspar Resources's historic radon surveys, rests within the Zeus property boundary.

The other four showings are recent discoveries by Matamec. The TH showing (Y-Zr-REE) is located in the north section of the property, in the same area as the Eagle showing of Mines Aurizon. The TH showing lies at the centre of a 200m east-west by 700m north-south soil anomaly and consists of 4 outcrops on the eastern face of a low-lying hill trending north-south. The showings does have interesting REE, Y and Zr values (7.19% REE, 2.16% Y and 2.9% Zr). The distribution of outcrops combined with the size of the soil anomaly indicates at least the possibility of an economic extension for this showing. The Surprise showing (Y-Zr-REE-Nb) is located in the far eastern section of the property and is hosted in biotite and amphibole-rich rocks with large quantities of associated garnets. It is interesting to note that this new type of mineralization shows greater relative enrichment of more valuable HREE versus the LREE as compared with the classic Sheffield Zone type. This makes it a valuable exploration target should significant volumes be located.

Of lesser importance but potentially leading to mineralization of greater volume, the Couleuvre (Y-Zr-REE) and Falaises (Zr-REE) Zones are located in the heart of the property and are associated respectively with a thin intermediate sill and with marbles.

Samples of these four new Y-REE-Zr showings were sent to Universite Laval in Quebec City in order to identify Y-REE-Zr bearing minerals. The results of this work will be known later this summer.

Conclusions

REE mineralization is spatially and genetically associated with the KAC. Whereas REE mineralization is widespread within the KAC, the best occurrences discovered to date are associated with two horizons: the base of the KAC and an horizon of sills intruding the overlying meta-sedimentary gneiss. The vast majority of the REE occurrences, both in bedrock and in boulders, are under-explored and need further exploration work. Given the widespread REE mineralization present within the KAC and the very poor bedrock exposure, it is concluded that there is very good potential for the KAC to host additional, yet undiscovered REE deposits. Finally, the Zeus property possibly holds a potential for precious metals Au, Pt, Pd, as well as U, mineralization associated with unrecognized hydrothermalism or small magmatic system.

Recommendations and budget

The two most economically significant areas (where potentially ore grade values are widespread and concentrated) are the Sheffield Zone and the PB-PS Zones. A two phase exploration program with a budget of 1.35 M$ targeting REE, U and Th associated with the Y-Zr bearing KAC, and possible Au mineralization on the Zeus property. The phase I ($974,800) consists of a systematic re-evaluation and resource consolidation on the Sheffield Zone including data-compilation, trenching ($40,000), channel sampling ($16,000), definition drilling (2,000 metres HQ proposed drilling: $400,000, see Figure 4 for location of the proposed 1,305 metres drilling program on Sheffield Zone), laboratory assays ($156,000), and extractability study ($250,000). Altough the entire Zone will be covered, emphasis is to be directed on the following known targets:

- the Central Zone, part of which is under-explored, correlation work done by the first author suggesting that the mineralization zones could be semi-continuous in this area;

- the lower part of the syenite unit, under-explored by Unocal's 1988 and 1990 drilling campaigns;

- Additional drilling ("twinning" of existing holes) in the eastern and western zone to confirm previous results and extends assays to the entire suite of REE;

- Excavating, mapping and channel sampling new trenches;

- Mineralogical and metallurgic testing with a consideration of metal extractability with regards to metal ratio (e.g. U, Th) and REE mineralogy.

If possible, Phase II ($377,000) should be run concurrently with Phase I to cover the entire property. Emphasis is to be directed on known targets.

Figure 4. Sheffield Zone - Proposed drill holes: http://media3.marketwire.com/docs/fig4-eng.JPG

The geological data in this press release was prepared by Aline Leclerc, geologist and Matamec's Vice-President Exploration, a Qualified Person as defined by NI 43-101.

About Matamec

Matamec is exploring for significant gold deposits in the Timmins mining camp in Ontario, of which the three main targets are the following: Matheson JV with Goldcorp Canada Ltd and Goldcorp Inc., Montclerg and 2W properties. In Quebec, the Company is exploring mainly for precious and base metals on Lesperance/Wachigabau with Northern Superior Resources Inc., Sakami, Tansim, Valmont and Vulcain properties, rare metals and uranium on Tansim, and REE on Zeus property.

"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."

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