Pitchblack Resources Ltd.
TSX VENTURE : PIT

December 17, 2012 17:42 ET

Pitchblack Announces Acquisition of Australian Precious Metal-Enriched Base Metal Assets and Financing

2012 Drilling Returned Up to 3.66 g/t Au, 448 g/t Ag and 13.0% Pb+Zn, Over 46.2 m

TORONTO, ONTARIO--(Marketwire - Dec. 17, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

Pitchblack Resources Ltd. ("Pitchblack" or "Company") (TSX VENTURE:PIT) has entered into a binding letter of intent (the "LOI") with Crocodile Gold Corp. (TSX:CRK)(OTCQX:CROCF)(FRANKFURT:XGC) ("Crocodile") for the acquisition of a 90% interest in certain mineral properties located in the Northern Territory of Australia (the "Property").

Commenting on the deal John Taggart, President & CEO of the Company stated:

"There are 5 key reasons we consider these assets to be very attractive:

1) High grades of precious metal enriched base metals both in previous drill holes and in metal produced at the former mines (Gold, Silver, Zinc, Lead and Copper)
2) Established infrastructure: the proximity of roads, rail and a deep water port for accessing international markets.
3) Excellent jurisdiction with very low country risk
4) Projects can be quickly advanced
5) Projects offer significant upside - "metal-rich setting""

Pitchblack has the right to acquire six precious metal enriched base metal properties (Koolpin Project) totalling 253.7 km2, including the past producing Iron Blow and Mount Bonnie open pit gold-silver mines. This property group consists of six individual tenements of varying size with highlights as follows:

  • Iron Blow Mine - produced 35,000 tonnes grading 7.57 g/t Au and 328.6 g/t Ag (1)
    • Recent drill intercepts of 3.66 g/t Au, 448 g/t Ag, 13.0% Pb+Zn, 0.28% Cu over 46.2 metres and 6.03 g/t Au, 415 g/t Ag, 17.4% Pb/Zn and 0.6% Cu over 19.8 meters (2)

Well defined precious metal enriched base metal system with a VMS geological setting that is similar in character to Hecla's Greens Creek deposit, which has a global reserve, estimated to be 21.9 million metric tonnes with grades of 13.9% zinc, 5.1% lead, 547.19 g/t silver, and 4.67 g/t gold. (3) Further exploration on the Australian properties may not lead to the discovery or development of a deposit of this size.

  • Mount Bonnie Mine-produced 110,000 tonnes grading 7.0 g/t Au and 230 g/t Ag (1)
    • Drill intercepts of 2.30 g/t Au, 270.7 g/t Ag, 12.1% Pb+Zn over 10.4 metres

  • Mount Evelyn Mine - produced 83,000 tonnes at an average grade of 6.1% Zn, 5.8%Pb, 260g/t Ag in the 1960's
    • Shallow mine with limited to no recorded drilling to depth

  • Maud Creek - Oxide Copper breccia zone with grab samples assaying up to 5% copper
    • Associated with a 10 km long, untested multi-element geochemical anomaly
    • Not tested by drilling

  • Mt. Ellison - Produced 3,300 t at an average grade of 20% Cu and 0.1% Bi
    • No recorded drilling

  • Yeuralba (Eva Valley) - Copper Flower deposit, historic resource of 116,000 tonnes grading 2g/t Au and 1% Cu
    • Sediment-hosted with associated boron exhalite zone
    • A qualified person, as such term is defined under NI 43-101, has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Pitchblack is not treating the historical estimate as current mineral resources or mineral reserves

These properties lie in a mineral-rich part of Australia's Northern Territory in a region (See attached figure) where the recent focus on gold has, in management's opinion, all but ignored the potential for precious metal enriched base metal deposits.

The Iron Blow and Mount Bonnie projects lie at the same stratigraphic level, have high grade precious metal enriched oxide caps, and have well developed alteration pipes. These two properties lie at the top of a distinct stratigraphic cycle along a trend in excess of 10 km, along which management believes there is good potential for the discovery of additional precious / base metal zones.

The Mount Evelyn deposit is a high-grade lead, zinc and silver skarn zone that has seen limited production and exploration in the past. Past producing gold mines lie a few kilometers to the south in similar stratigraphy.

The Maud Creek, Eva Valley and Mt. Ellison zones display regionally anomalous copper values that are sometimes associated with gold and bismuth. The occurrence of these zones suggests potential for breccias-type and sediment-hosted copper-rich deposits.

Exploration work in 2013 will initially focus on extending and validating the high-grade zones at the Iron Blow and Mount Bonnie deposits. Pitch Black envisions a two stage exploration program with initial drilling on the Iron Blow and Mount Bonnie deposits with a goal of producing an initial resource estimate in 2013. Before additional drilling is undertaken, geochemical sampling, detailed mapping and additional geophysical interpretations will be carried out.

To view the map associated with this press release, please visit the following link: http://media3.marketwire.com/docs/Pitchblack-Resources.pdf.

The other properties contain exciting mineralized showings or significant geophysical anomalies in several instances in what are interpreted to be similar geological environments to that which hosts the Iron Blow and Mt Bonnie deposits. These properties will undergo geochemical sampling and geological mapping before being prioritized for subsequent drill testing.

The Company has agreed to acquire a 90% interest in the Properties for a cash consideration of $500,000, payable upon execution of a definitive agreement in respect of the acquisition (the "Definitive Agreement"), the incurring of $4,000,000 in exploration expenditures on the Properties within 48 months of the date of the Definitive Agreement, and the issuance to Crocodile of such number of common shares of the Company as is equal to 10% of the issued and outstanding common shares of the Company upon execution of the Definitive Agreement.

"From our perspective, this agreement represents a win-win arrangement for both parties, allowing Pitchblack to assess the full potential of these base metal properties while we continue to focus on the development of our gold properties," stated Chantal Lavoie, President & CEO of Crocodile Gold Corporation.

The acquisition of the Properties remains subject to certain conditions, including the execution of the Definitive Agreement, satisfactory completion of due diligence, and receipt of regulatory approvals, including approval of the TSX Venture Exchange.

Private Placement for Gross Proceeds of up to $3 million

The Company also announces a non-brokered private placement of up to 30,000,000 units (the "Units") at a price of $0.10 per Unit for gross proceeds of up to $3,000,000 (the "Offering"). Each Unit will be comprised of one common share of the Company and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to acquire one additional common share at an exercise price of $0.20 for a period of two years. The securities issued pursuant to the Offering will be subject to a four month hold period under applicable Canadian securities laws. Closing of the Offering is expected to occur on or before March 29 2013 and is subject to receipt of all applicable regulatory approvals, including approval of the TSX Venture Exchange. The Company may pay finder's fees in connection with the Offering, in accordance with the policy of the TSX Venture Exchange. The Company expects to use the proceeds for completion of the acquisition and working capital purposes.

Qualified Person

Don Dudek P Geo, an officer of Pitchblack and a "qualified person" as such term is defined in National Instrument 43-101, has reviewed and approved the scientific and technical information and data included in this press release.

Notes:

(1) Report prepared for Northern Gold NL, entitled "Mt Bonnie and Iron Blow Projects, January 2005 prepared by Northern Gold NL, January 2005"

(2) See Crocodile Gold press release of March 12, 2012

(3) USGS Professional Paper 1763

FORWARD LOOKING INFORMATION CAUTION

This document may contain or refer to forward looking information within the meaning of applicable securities laws, based on current expectations, including, but not limited to the completion of the acquisition, the completion of the financing, the proposed use of proceeds from the financing, future exploration expenses and plans. Forward looking information is subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking information. Forward looking information is provided as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances.

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

  • For further information or to register for distribution
    for future press releases, please contact:
    Pitchblack Resources Ltd.
    John Taggart
    President & CEO
    416-309-2690