Grayd Resource Corporation

Grayd Resource Corporation

July 11, 2005 08:30 ET

Newmont Proceeds with Grayd's La India Gold Project in Mexico

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 11, 2005) - Grayd Resource Corporation (TSX VENTURE:GYD) is pleased to report that Newmont Mining Corporation (NYSE:NEM) has notified Grayd that it will proceed with the earn-in agreement on Grayd's 100% owned La India high sulphidation epithermal gold project located in the Mulatos belt of Sonora State, Mexico. Newmont's decision was made after reviewing the results of a 3-month due-diligence exploration program. Under the terms of the agreement, Newmont must spend US $7 million on exploration and development over a 4 year period to earn a 51% interest in the property. This includes a firm commitment to spend US $1 million in year 1 of the agreement (US $750,000 of this must be spent by the end of 2005). Newmont can earn an additional 19% interest (to a total of 70%) by completing a bankable feasibility study. Grayd will act as operator for the first 2 years of the earn-in.

During the recently completed due diligence period, Newmont completed a surface exploration program including: geological mapping, surface sampling (735 surface rock samples), 1,000 line kilometres of airborne geophysics as well as 20 line kilometres of ground geophysics. Grayd will provide its shareholders with an update on the findings from Newmont's work as soon as the two companies meet to review the results. The first year exploration program will be initiated shortly.

Marc Prefontaine, President and CEO of Grayd states: "After completing its review, Newmont's decision to proceed is a major vote of confidence for the La India Project and a milestone for Grayd. The arrival of the world's largest gold mining company to the Mulatos belt is also a very positive indication of the potential for the entire district."

The Mulatos District has similar geological characteristics to Newmont's Yanacocha district in Peru, the largest gold producer in South America. Both are tertiary aged volcanic-hosted high-sulphidation gold districts with multiple mineralized zones. The Mulatos belt has one known deposit (the Mulatos Deposit) and numerous gold occurrences that are at an early stage of exploration. The La India Property covers a 10 km long by 3.5 km wide, northwest trending, belt of highly altered volcanic rocks with associated high sulphidation gold mineralization. With a land package totaling approximately 75 square kilometres, Grayd is the second largest landholder in the Mulatos District after Alamos Gold Inc. (TSX: AGI), which is currently developing the 3 million ounce Mulatos gold deposit located 6 km from the La India Property boundary.

About Grayd Resource Corporation

Grayd Resource Corporation is a natural resource company engaged in the acquisition, exploration and development of mineral resource properties. It has a gold project in Mexico, a copper-gold porphyry project in British Columbia and a gold enriched base metal project in Alaska.

The TSX and the TSX Venture Exchange have neither approved nor disapproved of the information contained herein.

Contact Information

  • Grayd Resource Corporation
    Marc A. Prefontaine, M.Sc., P.Geo.
    President and CEO
    604-684-9877 (FAX)
    Freeform Communications Inc.
    778-371-9100 x 1220