Red Rock Energy Inc.
TSX VENTURE : RRK

Red Rock Energy Inc.

January 26, 2011 20:10 ET

Red Rock Announces Discovery of Redox Uranium Zone at Uranium City

CALGARY, ALBERTA--(Marketwire - Jan. 26, 2011) - Red Rock Energy Inc. (TSX VENTURE:RRK) announced today that, with the conclusion of its 2010 exploration program and the continued geological compilation of historical work in the Uranium City area, it has discovered a new uraniferous mineralized zone. Dubbed the 'Redox Zone', the newly discovered zone is located in the hangingwall of the St. Louis Fault approximately 600 m east of Red Rock's 46 Zone resource and about 500 metres northeast of the former producing Verna Mine workings and the Bolger open pit. The zone was discovered during Red Rock's field mapping and geological reconnaissance activities conducted through the summer of 2010. Historic drill collars located in the field were later compiled against historic drill logs and location maps which form part of Red Rock's historic data set. Data available from source records indicate that the main uraniferous zone and the subsidiary zones that comprise the the Redox Zone are open to surface, laterally and at depth, thus providing several prospective drill targets. Red Rock is now finalizing an exploration drill program to further delineate this zone.

On Aug. 31, 2009 Red Rock announced an inferred resource at the 46 Zone of about 523,000 pounds U3O8 in 402,600 tonnes at a grade of 0.065% U3O8.

From the early 1950's to 1982, when Eldorado Nuclear Limited (ENL) was both actively mining and exploring at Beaverlodge District, extensive drilling northeast of Verna-Bolger along both sides of the geologically favourable St. Louis Fault was completed. This work resulted in, among other things, the discovery of the 11 (hangingwall deposit), 21 and Dubyna zones (both footwall deposits), all of which were mined by ENL. With respect to the Redox Zone, which exists between the Bolger and 11/21 zone deposits, a preliminary review of the assay data for numerous B-series drill holes drilled by ENL in this area, identified at least 10 holes that encountered uranium mineralization at depths ranging from approximately 60 m to 320 m below surface. Historically, the Verna mine produced a total of 14.26 million pounds U3O8 at a grade of 0.190% U3O8 and the Bolger open pit produced 752,700 pounds U3O8 at a grade of 0.240%. All of this historic production came only from the hanging wall side of the St. Louis Fault. As well, in the Eldorado Mine Closure report published in 1982 by Don Ward (former Eldorado Nuclear Chief geologist), it was determined that the unmined underground portions of the Verna-Bolger area uranium deposits contain a now historic resource of 8.99 million pounds U3O8 (this and all other historical resource estimates in this press release are non N.I. 43-101 compliant, but are believed by management of Red Rock to be relevant and reliable as having been prepared in accordance with the then current industry standards).

This historic surface and underground production from the Verna-Bolger area is within a few hundred metres of Red Rock's previously announced development prospect the 46 Zone or East Target, which is in footwall rocks and thus geologically similar to the Ace and Fay ore bodies that were historically mined to the southwest producing 35.39 million pounds of U308 and containing 7.99 million pounds of U308 in historical unmined resources, as identified by Don Ward in his 1982 Eldorado Mine Closure Report, (Non 43-101 compliant resources).

Based upon the results of the initial review, Red Rock staff constructed a 3D model of the Redox Zone, which consists of one main and several uraniferous sub-zones. Of the zones modeled, ENL holes B147 and B308 both intersected the main uraniferous zone; this zone has lateral continuity of greater than 150 m and has intercepts that assay 0.072 % U3O8 across 15.2 m (50 ft) and 0.079 % U3O8 across 17.0 m (55.8 ft), respectively, in these two holes. Within each of these intercepts there are higher grade intervals approximately 130 m to 230 m below surface that assay 0.171% U3O8 across 4.57 m (15 ft) in hole B147 and 0.116% U3O8 across 5.79 m (19 ft) in hole B308.

In reviewing this data, Sandy Loutitt, President of Red Rock, commented: "The discovery of the Redox Zone is another step forward in the realization of our strategic goal to define new ore bodies at the Uranium City camp. Once again we have successfully applied new and modern exploration techniques to evaluate areas on the periphery of older zones that have a known extent of existing mineralization. The financial and geological advantages are obvious with this approach given that the Redox Zone is within several hundred metres of approximately 9 million lbs of historic (Non 43-101 compliant) resources and within 1 km of approx 17 million lbs of total historic resource (Non 43-101 compliant) as defined by the 1982 Eldorado Mine closure report".

Reg A. Olson, Ph.D., P. Geol., a Qualified Person under NI 43-101 and supervisor Red Rock's 2010 and 2011 exploration programs, has reviewed and is in agreement with the contents of this release. Readers are cautioned that historical mineral estimates and resources referred to herein are non NI 43-101 compliant. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

READER ADVISORY

Statements in this press release may contain forward-looking information including expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company. These risks include, but are not limited to, the risks associated with the mining industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.

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

  • Red Rock Energy Inc.
    Sandy Loutitt
    President
    403-685-1047
    or
    Red Rock Energy Inc.
    Lara Cull
    Operations Manager
    403-685-1047
    www.redrockenergy.ca