RX Exploration Inc.
CNQ : RXEX

September 05, 2007 17:36 ET

RX Exploration Inc. Receives NI 43-101 Report on Drumlummon

TORONTO, ONTARIO--(Marketwire - Sept. 5, 2007) - RX Exploration Inc. ("RX")(CNQ:RXEX) is pleased to announce that it has received its technical report on its optioned Drumlummon Property. The independently commissioned report has been prepared in National Instrument 43-101 format by Timothy J. Beesley, P.Eng., of T.J. Beesley Geological Services Inc., a "qualified person" within the meaning of that instrument. The report ties together mining and geological data from the last 134 years to recent drilling carried out for RX and draws conclusions and makes recommendations to allow RX to proceed with exploration and development of the Drumlummon Property. Following are extracts of the highlights of Mr. Beesley's report. He has reviewed the contents of this news release and has authorized its dissemination.

Summary

The Drumlummon Property includes the Drumlummon Mine at Marysville, Montana, one of the larger former producers of gold and silver in the Western United States. Marysville lies 25 miles northwest of Helena, the state capital of Montana. The mine produced precious metal which included 1.1 to 1.2 million tons with an average grade of 0.5 ounce/ton gold. The Drumlummon mine is of the "bonanza"- type epithermal deposits which are very young and low temperature in origin and which can produce high grades over large widths. For a number of reasons, including a 20-year lawsuit between competing mining companies, there are substantial areas in the mine which have never been developed and have been flooded since 1901. Testing of virgin exploration areas containing the Drumlummon Lode and parallel and intersecting lodes is warranted and recommended down dip from the mined part of the Xmas Vein on the 800 Level. William Wade's activities in this part of the mine were curtailed in 1950 when his mill burned down. Potential here is considered excellent. At the same time the 'previously disputed ground' south of Wade's Xmas Vein is considered a prime target and should be tested, for the first time ever. A program of rehabilitation of the 400 Level, crosscutting to establish drill stations, and underground diamond drilling will test vertical sections of these targets in detail. It is estimated that an in-house company-managed exploration program budget will total $1,462,000, and the same program if carried out by a contractor would cost $1,939,800.

The Drumlummon mine is covered in its entirety by 26 contiguous surveyed, patented mineral claims dating to the early days of mining in the 1870's, and covering an area of approximately 290 acres. A group of 68 contiguous unpatented mineral claims was staked on behalf of RX in 2007. These claims overlap the southern part of the patented claims and extend for another 2 miles to the southwest covering a total area of approximately 1,390 acres.

History

The Drumlummon gold-silver veins were discovered by Thomas Cruse while following up quartz vein material occurring in gold placer deposits. The Drumlummon claim was patented in July, 1879. In 1883 the whole of the Drumlummon lode was transferred by Thomas Cruse to The Montana Co. Ltd. which mined the Drumlummon lode from 1883 until 1901. Between 1883 and 1910 a dispute between the St Louis Company and the Montana Company over apex rights on the St. Louis Claim, owned by the former company and the 9-Hour Claim belonging to the latter. The Drumlummon hanging wall vein strayed over the St. Louis claim boundary into the St Louis Claim from the 9-Hour Claim. The St. Louis claim had precedence over the 9-Hour claim. A jury trial was held in 1899 and the apex rights for 610 feet of the Drumlummon hanging wall vein was awarded to the St. Louis Company. In 1901 the Montana Company pulled the pumps on the Drumlummon mine and the mine flooded to the 400 level, where it remained until 1941. Five appeals were entered between 1901 an 1910, but the verdict remained the same and in 1910, rather than pay damages, the Montana Company gave the Drumlummon mine to the St. Louis Company. The St. Louis Company, lacking mining expertise and wherewithal, never mined the Drumlummon, but leased it out to tributors who mined above the 400 Level. Between 1941-1951 the Montana Rainbow Company under the direction of William Wade revived the Drumlummon mine and achieved successful production. The mine was dewatered to the 800 Level and new ore was discovered south of the No. 2 Shaft, in particular the Xmas Vein, which Wade discovered in the hanging wall of the Drumlummon vein by diamond drilling. Between 1946 and 1951, made mined and produced gold, silver, copper, lead, and zinc were recovered. Wade (7) describes gold results from the Xmas Vein. The ore shoot was 600 feet long, 12 to 14 feet wide and stoped $16.50 between the 800 and 700 (0.47 oz/ton) and $24 between the 600 and 700 (0.69 oz/ton) and above the 600 went to $35 (1.0 oz/ton) and up to $50 per ton (1.43 oz/ton). The Montana Rainbow Company ceased activity when the mill burned down in 1950 and no satisfactory custom milling and smelting could be arranged. During the 1980's, attempts were made to put the mine back into production. Diamond drilling exploration was undertaken but no production was achieved. Those efforts terminated when financing arrangements failed with the stock market collapse of October 1987.

It is not possible to present mineral resource and mineral reserve estimates as estimates in accordance with section 2.4 of National Instrument 43-101 are not in existence.

Interpretation and Conclusions

The Drumlummon mine represents the largest accumulation of precious metals in the Marysville mining district, due to the coincidence of a number of key structural and metamorphic factors. The Drumlummon vein fissure system is developed along the southeastern contact of the Marysville stock where it is vertical. The contrasting competence of the Marysville stock quartz diorite and the contact metamorphic siliceous, brittle hornfels formed a locus for large scale faulting and facilitated the development of the wide Drumlummon breccia-fissure veins and large intersecting vein sets into which the low temperature epithermal precious metals were deposited. Because of the length and continuity of the vein fissure system the Drumlummon mine has a produced on average an order of magnitude (10X) greater value of precious metals than the various other mines in the district. Consequently undeveloped sections of the Drumlummon mine and extensions to the north (Last Hope claim) and south (beneath and south of the 9 Hour workings) are considered the best places in the Marysville district to developed grade and width of precious metal mineralization.

The 'previously disputed area', between Shaft No. 2 and the 9 Hour workings, beneath the 400 Level to beneath the 1600 Level has the best potential to develop precious metal resources. This area has been out of play since 1901 when the Montana Company flooded the mine to the 400 Level after receiving adverse court rulings. Technical opinion at the time and more recently is overwhelmingly in favour of the theory that the width and grade of the precious metal veins would continue into this area from the stopes to the north. The Montana Company said the area was barren, but appealed their negative verdict three times in the State Supreme court and twice in the U.S. Supreme Court to no effect, before handing the mine over to the St. Louis Company in 1910 as settlement of judgment. Some of the widest and richest fissure vein material was mined in the lower part of the 9 Hour workings. This area and the area immediately to the south are considered prime ground to test. Ropes (1935) recommended testing of the Last Hope claim at the north end of the Pixley workings. This area was never tested because of divided ownership. Wade's Xmas vein extended from Shaft No 2 600 feet to the south on the 800 Level. Mining on this level and over narrower lengths of stopes on the 700 and 600 Levels on this vein discovered by Wade in the hanging wall of the Drumlummon Lode was productive and lucrative, with grades and widths typical of the main part of an epithermal system.

Recommendations

Mr. Beesley stated that testing of virgin exploration areas containing the Drumlummon lode and parallel and intersecting lodes is warranted and recommended down dip from the mined portion of the Xmas vein on the 800 Level. Wade's activities in this part of the mine were terminated in 1951 when his mill burned down. Potential here is considered excellent. At the same time the 'previously disputed ground' south of Wade's Xmas vein is a prime target and should be tested, for the first time ever.

Testing will be carried out by diamond drilling, alternatively from the surface or from underground. Drilling from underground, to be carried out from the unflooded 400 Level, would require rehabilitation of sections of the level and preparation of crosscuts and diamond drill stations and would require more lead time. Mr. Beesley recommended underground diamond drilling. The superior advantage to underground diamond drilling would be shorter holes and better control to the target. The patterns shown are 100-ft centers, thought adequate for establishing resources. The drill can be fanned in either direction to reproduce this pattern at 100-ft intervals along strike of the veins.

Now that the report is available, RX will continue discussions regarding the financing necessary to complete the program recommended by Mr. Beesley. No arrangements have been concluded at this time.

RX Exploration Inc. (CUSIP # 78347W107) is a reporting issuer in good standing in the Province of Ontario whose shares are listed on CNQ (Symbol: RXEX). There are currently 23,033,675 common shares issued and outstanding.

Forward Looking Statements: Statements made in this news release that relate to future plans, expectations, events or performances are forward looking statements. Such statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

CNQ has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • RX Exploration Inc.
    Murray R. Nye
    President and Director
    (204) 989-2434
    (204) 989-2433 (FAX)