Red Crescent Resources Limited
TSX : RCB

Red Crescent Resources Limited

February 25, 2011 10:53 ET

Red Crescent Provides Update on the Due Diligence on Sivas Copper Project in Central Turkey

TORONTO, ONTARIO--(Marketwire - Feb. 25, 2011) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Red Crescent Resources Limited (TSX:RCB) ("RCR" or the "Company") a mineral exploration and development company focused on base metals today provided an update on its due diligence activities associated with its recently acquired rights to the Sivas Copper Project ("SCP"). The Project, which will be operated through a joint venture company 75%, owned by RCR, is located in the Sivas Region of east Central Turkey and approximately 650km North West of RCR's other base metal assets.

"We are pleased with the progress of our due diligence efforts and are encouraged by our findings with respect to the Project's history, potential mineralisation estimates, data and information." Said Mr. Alan M. Clegg, Chairman and CEO of Red Crescent Resources. "Once the due diligence process is successfully completed we anticipate the initiation of a focused drilling program."

Project History

For a period of 14 consecutive years since 1991, and intensively between 2000 and 2006, there was extensive investigation of the SCP and related tenements. The conclusions by the independent engineers and Falconbridge/Noranda were that the SCP has the potential for delineation of potentially significant and economic mineralisation.

The documentation now held by RCR shows that prior to 1991 a Turkish company ATS acquired the SCP tenements. In 1992 ATS engaged independent engineers Agricola Metals Corporation ("AMC") of Princeton, New Jersey, USA, to survey the tenements and prepare a scoping report. AMC made an extensive investigation of the surface geochemistry under the direction of Professor Kenneth Deffeyes of Princeton University, USA. The grid pattern analysis concluded that there is sufficient evidence for the existence of Copper with Nickel mineralisation within a potentially large Copper Mineralised body and this potential was designated the "Main Zone" ("MZ"). Continued investigation revealed a second large geochemical footprint and potential mineralised body on the tenements and this potential was designated the "South East Zone" ("SEZ").

In 2000, following the SCP Geochemical Survey Results, ATS commissioned a shallow geophysical IP survey and the results confirmed and improved the confidence level that potentially significant mineralised anomalies existed in the tenement areas. 

In 2001 Falconbridge entered into an "Earn-in" option agreement with ATS to execute certain works including extensive exploration and in the 2002 season made a full detailed deep high power geophysical survey across the tenements and this resulted in confirmation of very strong anomalies. These results combined with a tenement wide geological survey (started by Falconbridge and then taken over mid-stream by Noranda) with trenching, sampling, mapping and three drill holes, resulted in an evaluation of the mineralisation and potential for the mineralisation identified and projection of the Copper grade expected. The full potential of the by-product Nickel mineralisation was not evaluated at the time.

The headline potential quantity and grade targeted, although conceptual in nature and insufficient detailed exploration has been completed to define a mineral resource and it is not certain that further exploration will delineate the full target(s) as a mineral resource. However there is sufficient critical mass within the land holdings and sufficient historical geological and geophysical data available on the tenements to justify the stated targets being made.

Technical & Operational Due Diligence - Project Potential Mineralisation Estimate & Conceptual Operation Definition

The Falconbridge evaluation resultant from the completed works and reported internally which, is illustrated in the attached presentation uncovered in the RCR due diligence process now underway, was that the potential mineralised anomalies were collectively estimated to be at least 300 Million tonnes in size, 200 Million tonnes in the MZ and 100 Million tonnes in the SEZ.

Falconbridge/Noranda reports concluded further that:

  • Copper mineralization is the product of large shear – zone hosted hydrothermal system;

  • Mineralization consists of Chalcopyrite, weathered chalcocite, malachite, cuprite, azurite and covellite;

  • Two target anomalies/areas identified were proposed for immediate drilling and that were the basis for the estimated potential to host in excess of 100m tonnes of mineralised material at grades >2.74% Cu and a further 200m tonnes at grades of >1.98% Cu, respectively, (grades estimated from systematic sampling & 3 holes drilled);

  • By products identified with potential positive economic value so far are Nickel and potentially Gold, but further work is required to generate any estimate of their significance; and

  • Furthermore, based on the data and information on the project resultant from the works and a conceptual study founded on the joint considerable experience within the Falconbridge/Noranda companies, the mineralised zones could be exploited via a single large scale open pit and mining with a maximum pit depth of approximately 300m to exploit potential estimated mineralisation containing 14 Billion lbs of Cu.

Information and documentation/correspondence provided by Red Crescent partner in the SCP, Gensay Mining, whose principals previously were operating as executives of ATS indicated that Noranda/Falconbridge was impacted by depressed market conditions and going through a financial re-structuring in the fall and winter of 2002 and one of the results was significant cuts in the exploration & business development budget. As a result in 2003 Noranda officially lost the option through specific elected non-performance of its obligations to maintain its "earn-in" rights.

Upon the option leave by Noranda this left ATS unfunded and unable to meet its basic obligations for the maintenance of its rights. Followed restructuring along with strong changes in the Mining legislation resulted in no opportunity for further SCP project development by ATS until 2007. Subsequently several failed attempts at entering into agreements to continue with other partners in Turkey, resulted in no progress to 2009. In 2010, after a period of review and re-confirmation of potential in the SCP through meetings and written confirmations from independent experts, Agricola Metals Corporation and others, Gensay Mining was formed and Red Crescent Resources approached as a new International but Turkey focused mining and resources development company to consider the Sivas Copper Project.

Data and Information

RCR has received Four (4) Volumes of data and information resultant from the consolidated works of AMC, Falconbridge and Noranda and consists of Volume I - Executive Summary and full geological and geophysical overview, Volume II – Geology, Geochemistry and Assay results, Volume III – All geophysical works reports and complete geophysical database, and Volume IV – All relevant Geological Mapping, Maps and relevant literature related to SCP. Neither the core from the three holes that were drilled, nor the sample pulps are available. The hole sites are accessible and known for future twinning within the upcoming drill season. Along with already completed site visits these form the basis of the technical due diligence.

Legal Due Diligence

RCR has completed a full legal due diligence and all rights and titles are confirmed within Gensay Mining and in good standing with the Ministry of Energy and Mineral Resources. The related Mining Licences and documentation for transfer of these rights to the new RCR/GM JV Co are completed and expected to be executed in full by Mid-March by which time the full Red Crescent due diligence should be completed.

2011 Exploration Program

Pending the successful completion of the due diligence and transfer of the licences for the SCP tenements to the JV Co, RCR intends to execute a drilling program with diamond core and reverse circulation drilling within the upcoming season between April and October 2011. The Goal is to prove up an initial independent NI43-101 inferred and indicated mineral resource estimate at grades within the range reported by Noranda, i.e. 1.28% to 2.73% Cu, with by-product assays completed also.

Alan Clegg, a Qualified Person as defined by National Instrument 43-101, has reviewed and verified the technical information contained in this news release.

The statements made in this press release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

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