Salmon River Resources Ltd.
TSX VENTURE : SAL

Salmon River Resources Ltd.

December 20, 2011 16:01 ET

Salmon River Resources Ltd.: Initial Resource Estimate for the Mt. Manning North (E77/1209) Iron Ore Deposit

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2011) - Salmon River Resources Ltd. (TSX VENTURE:SAL) -

HIGHLIGHTS

  • An initial mineral resource estimate for the Mt. Manning North iron ore deposit comprises 124 million tonnes at 25.4% iron (Fe). This is an Inferred Mineral Resource estimate prepared in accordance with the NI 43-101 disclosure standards.
Table 1: Total Inferred Mineral Resource Estimate at a 20% Fe cut-off
Category Domain Tonnes
(Mt)
Fe
(%)
SiO2
(%)
Al2O3
(%)
P
(%)
S
(%)
LOI
(%)
Inferred Oxidised 43 25.43 52.85 3.29 0.05 0.48 1.90
Fresh 81 25.31 52.85 3.27 0.05 0.62 1.35
TOTAL 124 25.35 52.85 3.28 0.05 0.57 1.54
  • Modelling and estimation for Fe concentrate is currently being undertaken and initial findings shows excellent potential for producing a saleable concentrate.
  • Reported Resource covers only about 4% of the approximately 60km total strike length of the BIF structures present within Treppo Grande iron ore tenements that have the potential to host both magnetite and hematite iron ore mineralization; and remains open along strike and at depth, which has been indicated by the recently-completed drilling program as well as previous ground and airborne and magnetic surveys.
  • Detailed resource definition drilling is planned in 2012.

Salmon River Resources Ltd. ("Salmon River" or the "Company) (TSX VENTURE:SAL) is pleased to announce the initial Mineral Resource estimate for the first phase drilling program at its Mt. Manning North Iron Ore project (E77/1209) in the Yilgarn region of Western Australia. This update should be read in conjunction with the previous update of 11 October 2011 which describes the tenement, geology and drilling program.

RESOURCE OVERVIEW

Modelling and mineral resource estimation undertaken by Mining Plus has resulted in a NI 43-101 reportable Inferred Mineral Resource of 124 million tonnes at 25.35% Fe and using a cut-off grade of 20% Fe.

The resource estimation validates the Company's belief that the Mt. Manning North Iron Ore prospect has the potential to host a significant magnetite deposit. Drilling to date has tested 2.8km of the approximately 20km of the banded Iron formation (BIF) structure present within E77/1209 with a strike continuity of at least 2.4km. The reported resource does not include any of the BIF structures at Mt. Manning South or the Barlee tenement and, thus, covers only about 4% of the total BIF strike length that have the potential to host both magnetite and hematite iron ore mineralization.

Resource Details

The resource data was obtained from 8 RC drill holes for 1,884 metres and were spaced at 400m along strike with one scout hole per line spacing, which was drilled and completed between June and July 2011.

Resource estimates using grade ranges from 20% to greater than 30% Fe is summarised in Table 2 below.

Table 2: Inferred Mineral Resource Estimate Inventory
Domain Grade
Range
Volume
(000)
Tonnes
(000)
Ave
Density
Fe
(%)
SiO2
(%)
Al2O3
(%)
P
(%)
S
(%)
LOI
(%)
Oxidised ≥ 30 2,220 7,383 3.33 32.41 48.32 1.08 0.04 0.09 1.57
20.0 - 29.9 12,423 35,984 2.90 23.99 53.77 3.74 0.05 0.55 1.96
Sub-total 14,643 43,367 2.96 25.43 52.85 3.29 0.05 0.48 1.90
Fresh ≥ 30 4,262 14,101 3.31 32.07 49.66 1.13 0.05 0.16 1.01
20.0 - 29.9 23,167 66,991 2.89 23.88 53.52 3.72 0.05 0.72 1.42
Sub-total 27,429 81,092 2.96 25.31 52.85 3.27 0.05 0.62 1.35
Oxidised & Fresh ≥ 30 6,482 21,484 3.31 32.19 49.20 1.11 0.05 0.13 1.20
20.0 - 29.9 35,589 102,976 2.89 23.92 53.61 3.73 0.05 0.66 1.61
GRAND TOTAL 42,072 124,460 2.96 25.35 52.85 3.28 0.05 0.57 1.54
Minor discrepancies may exist due to rounding.

In the above resource figures, Mining Plus has reviewed the drilling, sampling and QA/QC data supporting the resource estimate and believes that the data is of sufficient quality to support the resource classifications. Mining Plus has supervised the preparation of the resource modelling. Mining Plus has has relied heavily upon the information provided by Salmon River and, in particular, that all of the information available has been provided and none held back, however Mining Plus has, where possible, verified data provided independently and has undertaken site visits to view the initial drilling and sampling program of Salmon River.

The data capture, management and validation were undertaken in Surpac software while the modelling and statistical analysis using Vulcan specialised software.

Mining Plus interpreted the iron mineralisation envelope using the geological logs provide by Salmon River and the support from geological mapping and magnetic survey data. Mineralised volumes were estimated using block modelling while in situ density values were assigned to the model blocks based on assigning values based on rock type derived core measurements. Fe and other elemental grades were estimated within the mineralised wireframe using the inverse distance weighing method. Confining the resource modelling and estimation parameters within the interpreted mineralised envelope as supported by the geologic mapping and magnetic survey, along with an assessment of the level of confidence in the understanding of both the geological and grade continuity the resource modelled has been classified in the inferred category.

Salmon River has established and maintains a comprehensive quality assurance and quality control (QAQC) sampling and geological database protocols as per industry standards.

Assaying of RC drill samples was completed on one metre intervals, with DTR testwork undertaken on two metre composite samples.

All initial one metre RC drill samples were analysed by Genalysis-Intertek in Perth, Western Australia using a sub-sample of the prepared pulp and fused into a glass disc using a Lithium Borate flux. The fused bead is then subjected to XRF Fluorescence Spectrometry for Extended Iron Ore Suite.

All two metre composite samples were sent to Amdel-Bureau Veritas in Perth, Western Australia for Davis Tube Recovery (DTR) testwork utilising an agreed DTR process stream.

To view Figures 1, 2 and 3 associated with this news release, please click the following link: http://media3.marketwire.com/docs/SAL_Figs_123.pdf.

Future Work

Salmon River will shortly report on its recent 2-hole scout diamond drill programme into apparent massive high-grade hematite outcrops present within the "J- Hook" area at its E77/1208 (Mt. Manning South) tenement.

Further exploratory drilling is planned with the goal of upgrading the current resource estimate and further delineation of the deposit. Additional analysis is also planned for density measurements and geotechnical study to complete a scoping study.

Salmon River's Chairman, Doug Betts commented:

"This initial resource estimate for the Mt. Manning North iron ore project is a validation of the company's belief in the potential for massive iron ore deposits within our Treppo Grande ore tenements. We are confident that the future exploration work will further delineate the potential for both magnetite and DSO hematite and expand the size and quality of the BIF-hosted iron ore resources."

Qualified Persons

Mr. Hector Galam, B.App.Sc. (Hons) (App. Geology), M.Sc. (Geology), a Member of the AIG and the AusIMM, is a Qualified Person as defined in National Instrument 43-101. He is a full time employee of the Company as the Exploration Manager and responsible for the geological programmes on all the EL's referenced in this document.

Mr. James Llorca, BSc (Geology), a Member of the AIG and the AusIMM, is full time employee of Mining Plus and a consultant geologist who is independent of Salmon River. He is a Qualified Person as defined in National Instrument 43-101 and provides specialist technical advice and input for exploration on Salmon River's iron ore projects in Western Australia. He is responsible for the preparation of the technical information contained in this news release and has reviewed and approved the scientific and technical information contained in this news release.

About Salmon River Resources Limited (TSX VENTURE:SAL)

Salmon River Resources Limited is a mineral exploration company engaged in the exploration for and development of commercial deposits of iron ore in Western Australia. It exercised its option to acquire five tenements in the Yigarn region of Western Australia including the Treppo Grande iron ore project, approximately 210 kilometres northwest of Kalgoorlie, comprising two tenements covering Mt. Manning (298 km2) and the Barlee tenement (98.7 km2). Completion of the acquisition of the tenements is subject to certain conditions, including payment of A$100 million to the optionor. Salmon River believes the Treppo Grande project has the potential to be a world-class iron ore deposit with early development potential. Salmon River has recently announced the signing of a Memorandum of Understanding with General Steel Holdings Inc. ("General Steel", NYSE:GSI) providing for substantial future financing, off-take arrangements and the provision of management oversight (see press release dated 4 November 2011). The shares of Salmon River are listed on the TSX Venture Exchange under the symbol "SAL".

For further information see our website at www.salmonriverresources.com.

On behalf of the Board of Directors of SALMON RIVER RESOURCES LTD.

J.G. Stewart, President

Cautionary Language and Forward-Looking Statements: This press release contains forward-looking statements that are based on the beliefs of management and reflect Salmon River's current expectations. This press release relates to the exploration and resource measurement programmes of Salmon River. All statements in this discussion, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results, performance or developments may differ materially from those in forward-looking statements. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Factors that could cause actual results to differ materially from those in forward looking statements include the fact that the Company must complete the acquisition of the tenements (which requires regulatory and shareholder approval, execution of a definitive agreement with GSH, completion of a minimum of $110 million in financing, all prior to April 30, 2012), the risks that mineral resources are not as estimated, the actual results of exploration activities not being as anticipated, fluctuations in commodity prices in general and iron ore prices in particular, and the availability of capital and financing, and general economic, market or business conditions. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.

Neither 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.

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