RJZ Mining Corporation

June 10, 2005 13:35 ET

RJZ Obtains Conditional Approval for Purchase of Magadan Mining Company and Discloses Results of Technical Report

CALGARY, ALBERTA--(CCNMatthews - June 10, 2005) - Further to a press release dated September 3, 2004, RJZ Mining Corporation (TSX VENTURE:RJZ) announces it has received conditional approval from the TSX Venture Exchange Inc. for the acquisition by RJZ Services Limited ("RJZ Services"), RJZ's wholly owned subsidiary organized under the laws of Cyprus, of all the outstanding shares of Magadanskaiia Gornorudnaiia Kompaniia (Magadan Mining Company - "Magadan"), a public joint stock mining company organized and existing under the laws of the Russian Federation (the "Transaction").

The primary asset of Magadan is a 100% interest in a large exploration and mining licence centred about 130 kilometres east of the city of Magadan at about 59.3 N, 153.2 E in the Olsk District, Magadan Region, Far East Province of the Russian Federation (the "Nakhatandzhinskaya Licence"). The Nakhatandzhinskaya Licence area encompasses 5,250 square kilometres from which some 528 square kilometres have been selected for more intensive exploration and contains six properties or prospects known as the Talnikovy, Krutoi, Ryzhik, Lora, Guron and Gorely prospects.

RJZ has received a National Instrument 43-101 compliant technical report dated January 24, 2005 prepared by Peter Webster, P.Geo of Mercator Geological Services Limited entitled "Technical Report on Selected Mineral Properties in the Nakhatandzhinskaya Licence Magadan Region, Russian Federation" (the "Technical Report"). Mr. Webster has concluded in the Technical Report that the Nakhatandzhinskaya Licence area is a very large tract containing geological environments that are prospective for mineral exploration. The Nakhatandzhinskaya Licence encompasses a number of mineral prospects with signs of copper, molybdenum, gold, and platinum mineralization that have not been tested by drilling. Mr. Webster recommends a three phase exploration program (phase 1 - $150,000, phase 2 - $200,000 and phase 3 - $450,000) that begins with extensive, but inexpensive, confirmation of the 'Russian' work previously performed on the Nakhatandzhinskaya Licence. If the results of that work are confirmed, at least one prospect (Talnikovy) will be ready for drilling.

Based on the results of the limited investigation carried out by Mr. Webster, it is concluded that the Nakhatandzhinskaya Licence and in particular the Talnikovy prospect and the Krutoi prospect represent legitimate early stage exploration projects that have potential for economic mineral discoveries.

Access to the Nakhatandzhinskaya Licence is by helicopter or by a network of bulldozer trails and winter roads. The climate is marked by short warm summers and long cold winters. The terrain is characterized by low rounded hills, small mountains and muskeg areas dissected by numerous streams that are similar to northern Quebec, Labrador or Newfoundland.

Mineralization in the Nakhatandzhinskaya Licence is commonly associated with intrusives of the Sredninsky magmatic arch located in the internal zone of the Okhotsk-Chukotka Volcanic Belt ("OCVB"). The OCVB is host to a wide variety of gold, silver, copper, molybdenum, tin and tungsten mineralization and includes one of the world's largest silver deposits at Dukat located 350km to the northeast.

The best near term potential for an economic discovery on the Nakhatandzhinskaya Licence is the Talnikovy anomaly, which appears to be an overburden-covered Cu-Mo porphyry system. Elsewhere on the Talnikovy prospect, early stage exploration in the Povortny area has located Pt-Pd mineralization in stream boulders, suggesting an additional, distinctly different type of mineralization.

Based on the results of work completed to date, Mr. Webster has recommended a three phase exploration program, with subsequent phases contingent on positive results of the preceding phase. Phase 1 includes completion of an independent, comprehensive verification sampling program to confirm mineralization levels reported by Magadan geologists. Phase 1 also includes construction of a 'fair weather' road into key areas of the Talnikovy and Krutoi properties which will allow for the completion of geological, geochemical and geophysical surveys in addition to trenching. These activities will focus on extending the zones of known mineralization and finalize targeting of new drill holes. Phase 2 of the program includes a minimum of 1000 metres of diamond (core) drilling recommended to test anomalies outlined by these surveys. Phase 3 recommendations include completion of an additional 2500 metres of diamond drilling at a spacing that will enhance the understanding of the outlined zones of mineralization.

For further mining technical information please see the Technical Report filed on SEDAR in conjunction with the filing of this press release on SEDAR.

The following is selected financial information for Magadan taken from the unaudited management prepared financial statements that have been translated from Russian and converted to Canadian dollars.

As at December 31
Item 2004 2003
Cash 6,099 50,752
Accounts Receivable 207,286 208,803
Fixed Assets 23,448 31,126
Total Assets 246,954 290,955
Accounts Payable 7,816 223,499
Long Term Liabilities 914,172 701,943
Retained Earnings (675,034) (634,487)

For the Year Ending December 31
Item 2004 2003
Sales 239,861 313,136
Cost of Goods Sold 255,538 532,208
Operating Income (Loss) (15,677) (219,072)
Expenses 31,265 2,921
Net Income (Loss) (46,942) (221,993)

Pursuant to the purchase and sale agreement for Magadan previously disclosed in the September 3, 2004 press release, approximately $200,000 of current liabilities was converted to long term liabilities, as reflected in the above financial information. All long term liabilities are non-interest bearing and are payable only after a feasibility study has been completed on the Nakhatandzhinskaya Licence and a mining permit has been issued for a mine on the Nakhatandzhinskaya Licence.

Mr. Peter Webster, P. Geo., of Mercator Geological Services Limited is the independent geologist to RJZ who is the Qualified Person who has reviewed and verified the technical information contained in this release.

The TSX Venture Exchange does not accept responsibility for the accuracy of adequacy of this release.

Contact Information

  • RJZ Mining Corporation
    Alan Johnson
    Chief Executive Officer
    (403) 239-0730
    (403) 239-4268 (FAX)
    Email: aajohns@attglobal.net
    RJZ Mining Corporation
    538 Hawkside Mews
    Calgary, AB T3G 3R9