Portage Minerals Inc.
CNSX : RKX

Portage Minerals Inc.

May 25, 2012 09:00 ET

Portage Signs Letter of Intent for Partnership on Bald Hill Antimony Property, New Brunswick

ST. ANDREWS, NEW BRUNSWICK--(Marketwire - May 25, 2012) - Portage Minerals Inc. ("Portage") (CNSX:RKX) today announced that as part of its strategy to focus resources on its priority gold properties and develop other properties through disposition or strategic partnerships, Portage and its wholly-owned subsidiary Rockport Mining Corp. ("Rockport") have entered into a letter of intent (the "LOI") with Cervello Capital Inc. pursuant to which Global Antimony Corp. ("Global Antimony") will have the option to earn an 80% interest in the Bald Hill Antimony Property through a series of cash payments and exploration expenditures totaling $3.75 million and $7.5 million, respectively, over 3 years, as described below. Portage will retain a 20% participating interest and a 1% net smelter royalty. The Bald Hill Antimony Property is a significant new antimony discovery, set in a geological region proven to host major antimony deposits such as the past producing Lake George mine in New Brunswick and the producing Beaver Brook mine in Newfoundland. A summary of the Bald Hill Antimony Property is attached at the end of this news release.

According to Ken Hight, Chairman and Chief Executive Officer of Portage, "This transaction brings significant cash payments to Portage but more importantly the partnership with Global Antimony will allow the Bald Hill antimony discovery to be rapidly advanced towards the pre-feasibility stage while we focus on our advanced staged gold projects. In addition to the announcement on March 12th, 2012, to sell our 30% interest in the Clarence Stream gold project for approximately $3.1 million in cash and securities, this transaction will allow us to advance our priority gold properties without accessing the current equity markets and diluting our shareholders."

Portage's strategy is to:

  • Focus on the company's two, wholly-owned or majority controlled, advanced staged gold projects located in New Brunswick.
    • Golden Ridge (60% owned) and Golden Pike/Annindale (100%-owned) which have both consistently returned exciting drill results from recent resource expansion drill programs.
    • Progress these advanced gold projects to pre-feasibility stage.
  • Realize cash from non-core assets such as its 30% interest in the Clarence Stream project (as announced on March 12th, 2012) to invest into the above core gold assets.
  • Through joint ventures and strategic partnerships such as with Global Antimony on Bald Hill, advance the company's strategic, non-gold assets, to pre-feasibility stage and potential production while maintaining NSR and minority interests in the properties.

The Transaction

Under the terms of the LOI, Global Antimony has paid $50,000 as part of a $200,000 payment for an exclusive right to negotiate and finalize an agreement with Portage to obtain an 80% interest in the Bald Hill Antimony Property. Final payment for the exclusive right is due on or before June 15, 2012. The LOI outlines the general terms by which Global Antimony can earn its 80% interest which shall form the basis of the definitive agreement to be finalized by July 31, 2012. Under the terms of the LOI, Global Antimony will be required to make a cash payment of $1.3 million by July 31, 2012, subject to extension at Portage's discretion, and fund $2.5 million of drilling and related exploration expenses to be completed by July 31, 2013 to earn a 28% interest. Global Antimony can earn an additional 26% interest (54% total interest) by making an additional cash payment of $1.25 million by July 31, 2013 and funding a further $2.5 million for drilling and related exploration expenses to be completed by July 31, 2014. Global Antimony can earn a final 26% interest (80% total interest) by making a final cash payment of $1.0 million by July 31, 2014 and funding a further $2.5 million for drilling and related exploration expenses by July 31, 2015. In addition, the terms of the transaction provide that, concurrent with an initial public offering of Global Antimony, Global Antimony will, subject to all applicable laws and regulatory consents, issue to Portage 1,000,000 share purchase warrants with an exercise price equal to the initial public offering price Global Antimony and further provide Portage with a director nominee on its board of directors. These warrants shall have a maturity date of two years from the initial public offering date. Until Global Antimony has earned a 54% interest in the property, Rockport shall continue to be the operator of the property and shall receive normal operator fees. Rockport shall retain a 1% net smelter royalty on the property.

The completion of the transaction is subject to normal due diligence by Global Antimony and its advisors and the parties entering into a definitive agreement by July 31, 2012.

A summary of Portage's two advanced gold projects are provided below.

The Golden Ridge Project, New Brunswick

Portage completed 45 drill holes in 2010 and 24 drill holes in 2011 on the project. Recently announced drill results from 2011 drilling include: 2.37 g/t gold over 22.70m, 0.70 g/t gold over 167.40m including 1.37 g/t gold over 30.05m and 0.76 g/t gold over 154.10m including 1.12 g/t gold over 46.50m and 1.20 g/t gold over 24.97m. The mineralized system (1 km x 0.4 km) remains open for resource expansion. The 8 km by 3 km property covers a highly prospective gold target which remains virtually unexplored outside the drilled resource area. The mineral resource estimate of April 26, 2011, contains an Inferred Mineral Resource of 11,640,000 tonnes at a grade of 0.96 g/t gold yielding 359,300 ounces of gold. It is important to note that this resource estimate does not include the 24 drill holes completed in 2011 and Management expects the 2011 program to significantly expand the mineral resource for the Golden Ridge Property.

Full disclosure of Portage's 2011 drill programs and the Golden Ridge resource estimate are available within the Portage news releases dated March 2, 2011; April 26, 2011; June 8, 2011; October 24, 2011; January 31, 2012 and March 1, 2012. An NI 43-101 compliant technical report on the Golden Ridge Property describing in detail, among other things, the resource estimate, QA/QC, database validation and geologic model, was filed on SEDAR on June 9, 2011.

The Golden Pike Property, New Brunswick

In 2011 Portage completed 17 holes plus the extension of 4 existing holes for a total of approximately 2,700m drilled. The program focused on delineating and expanding the high grade gold zones on the South Trend deposit where previous drilling returned gold intersections such as 43.07 g/t gold over 13.00m, 32.26 g/t gold over 10.06m and 8.08 g/t gold over 7.72m. Recently announced drill results from 2011 drilling include: 6.93 g/t gold over 10.62m, 9.09 g/t gold over 3.35m, 19.47 g/t gold over 2.20m, 9.42 g/t gold over 3.80m and 33.30 g/t gold over 1.41m.

The South Trend mineral resource estimate as of August 19, 2011 contains an Inferred Mineral Resource of 214,800 tonnes at a grade of 9.60 g/t gold (13.48 uncapped). The resource estimate does not include the results from drill holes completed in 2011 and Management expects the 2011 program to expand the mineral resource estimate for the Golden Pike Property.

Full disclosure of Portage's previous drill programs and the Golden Pike Property resource estimate are available within the Portage news releases dated November 12, 2010; August 24, 2011; December 21, 2011 and February 13, 2012. An NI 43-101 compliant technical report on the Golden Pike Property describing in detail among other things, the resource estimate, QA/QC, database validation and geologic model, was filed on SEDAR on September 8, 2011.Roger Dahn, P. Geo. (New Brunswick), Vice President-Exploration of Portage, is designated as the Qualified Person under National Instrument 43-101 and has reviewed and approved the contents of this news release.

Portage Minerals Inc. is a mineral exploration corporation exploring for gold in Eastern Canada. Further information about Portage can be accessed on the Company's website at www.portagemineralsinc.com and on the SEDAR website at www.sedar.com. The common shares of Portage trade on the Canadian National Stock Exchange ("CNSX") as a mining issuer under the trading symbol "RKX".

To receive Company news releases via e-mail, please advise aman@chfir.com and specify "Portage News" in the subject line.

Bald Hill Antimony - Project Summary

Project Summary

The Bald Hill antimony project is a significant new discovery as previously reported set in a geological region proven to host major antimony deposits similar to the past producing Lake George mine in New Brunswick, as well as the Beaver Brook mine in Newfoundland. The main antimony trend at Bald Hill has now been defined over 700 metres of its indicated +1.5 kilometre length and remains open in all directions. Previous results released included:

  • Potential Quantity and Grade of the Main Zone, which is the target of further exploration, is in the 725,000 to 1,000,000 tonne range grading 4.11% to 5.32% Sb. (NI 43-101 compliant report prepared by Conestoga-Rovers & Associates, see news release dated November 10, 2010).
    • Highlight intercepts (core width) from previously announced diamond drilling include 11.70% Sb over 4.51 metres, 6.74% Sb over 3.30 metres and 5.53% Sb over 6.00 metres including 14.49% Sb over 2.03 metres.
    • Mineralized zone remains open in all directions for expansion.

  • Initial trenching of the southern extension of the Main Zone returned significant assay results of 2.90% Sb over 8.18 m including 5.79% Sb over 1.75m and 8.47% Sb over 1.53 m (see news release dated March 15, 2011).
    • Soil geochemical results suggest a large mineralized system, +1.5 km in length, with anomalous antimony and gold evident.

  • Another high grade antimony target is located approximately 3 km east of Bald Hill on Portage's 100% owned East Property. Here, prospecting samples collected from angular boulders, assayed up to 53.00 % antimony and 1.86 g/t gold. Of the eleven (11) anomalous samples collected seven (7) returned assay results greater than 15% Sb. The source of these high grade boulders is hypothesized to be local and thus represents an exciting exploration target for further exploration (see news release dated November 10, 2010).

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. The forward-looking statements contained in this news release are made as of the date hereof and Portage undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The CNSX has not approved and does not accept responsibility for the adequacy or accuracy of this news release.

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