VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 31, 2013) - Pistol Bay Mining Inc. (TSX VENTURE:PST) reports that, subject to regulatory approval, it has entered into a Letter Agreement (LOI) with Actus Minerals Corp. ("Actus") whereby Actus has an option to acquire a 51% interest in the mineral claim known as the C3 claim block (#S-111223, comprising 274 hectares) located in the Athabasca Basin, in the Wheeler River area, Saskatchewan (the "Property").
Under the terms of the Agreement, and as part of its due diligence review Actus incurred $25,000 to have a technical report completed on the property which it anticipates being able to file shortly. Additionally, Actus, on or before January 31, 2013, must pay $10,000 and issue 100,000 shares upon receipt of regulatory approval; pay an additional $90,000 and issue 400,000 of its shares by March 30, 2013. In order to maintain the option and earn an undivided 51% interest in the property, Actus is required to incur an aggregate of $1,000,000 in exploration expenditures, make a final payment of $400,000 to Pistol and issue 2,000,000 common shares on or before March 30, 2014 (the "Final Payment"). At its election, Actus may make the Final Payment in four equal and annual installments of $100,000 and 500,000 shares.
Actus is able to earn an additional 10% interest in the property, for an aggregate interest of 61% by incurring a total of $5,000,000 in exploration expenditures on the Property on or before the fifth anniversary of the agreement; and in order to earn an additional 19% interest for an aggregate interest of 80%, Actus will complete a bankable feasibility study on or before the seventh year anniversary of the agreement. The Property is subject to an underlying 2% NSR of which the Company is able to acquire 1% for a onetime payment of $1,000,000.
The C3 Property lies in the eastern part of the Athabasca Basin where sandstones rest unconformably on basement rocks of the Wollaston Domain which contain by far the majority of the known high grade uranium deposits in the basin. The Property is situated within the regional-scale magnetic low that hosts all of the known deposits and lies within the regionally extensive illite and dravite alteration zones that are also associated with the MacArthur River and Key Lake uranium mines and the Millenium deposit.
The Property is located approximately 20 kilometers southwest of Denison Mines Phoenix Property and widely spaced shallow drilling in the 1980's (2 holes drilled by Noranda and one hole drilled by Minatco) all of which reportedly intersected alteration within the basement rocks with anomalous uranium levels (3.3 meters averaging 32 ppm U3O8) in the Minatco hole.
A VTEM survey flown in 2006 defined an extensive conductivity anomaly (within the C3 Property) interpreted as flat lying or shallow dipping graphitic meta-sedimentary rocksand an arcuate magnetic feature (similar to the setting of the Cigar Lake deposit) that may reflect paleo-topographic features within the basement rocks. Field work carried out in 2009 (boulder sampling geochemical analysis and reflectance spectroscopy) has confirmed the presence of alteration minerals and pathfinder elements associated with uranium mineralization.
Most of the known uranium deposits occur in close association with graphitic metasediments in the Wollaston basement rocks. The deposits often occur at the intersections between strike-parallel faults (or shear zones localized in graphitic basement units) and one or more set of cross-faults or associated with domes reflecting paleo-topographic irregularities in the basement rocks.
By current exploration standards the C3 Property has excellent potential to host high grade uranium mineralization and clearly warrants an extensive exploration program. Gravity and seismic surveys have been recommended to delineate alteration haloes within the overlying sandstones and define irregularities (domes, fault scarps etc.) in the basement rocks which are considered high priority drill targets in this part of the Athabasca Basin.
Technical information in this news release has been prepared and/or revised by Mike Magrum, P.Eng., a qualified person as defined in NI 43-101.
About Pistol Bay Mining Inc. (TSX VENTURE:PST) is a diversified Junior Canadian Mineral Exploration Company with a focus on precious and base metal properties in North America.
For additional information please contact Charles Desjardins at Pistol Bay Mining Inc. or visit www.pistolbaymining.com.
On Behalf of the Board of Directors
PISTOL BAY MINING INC.
Charles Desjardins, President and Director
This report contains forward-looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
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.