Sanatana Resources Inc.

Sanatana Resources Inc.

June 19, 2012 09:00 ET

Sanatana Provides Exploration Update on the Watershed Property

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 19, 2012) - Sanatana Resources Inc. ("Sanatana" or the "Company") (TSX VENTURE:STA) is pleased to provide this exploration update for the Watershed Property. The Company has completed a further five drill holes that were intended to test the existence of gold mineralization west of Clam Lake where the Company successfully completed a nine-hole drill program in April 2012. The current drill program encountered gold mineralization as discussed in further detail below.

The Company has been conducting a drill program around the Chain of Lakes prospect approximately 1.5 km to the west of the recently discovered gold mineralization on Clam Lake mineral claim 3011820. Gold mineralization at Clam Lake was hosted by strongly silicified and brecciated diorite - granodiorite rocks. The trend of the mineralization was delineated by ground Induced Polarization (IP) geophysical surveys. The drill program at the Chain of Lakes prospect was designed to test similar IP targets along strike from the primary anomaly drilled at Clam Lake.

All the drilling was angled at 60 degrees to horizontal towards the south, allowing for some slight drift to the west at times. SR-12-05 was collared on cut Line 2 to drill under a grab sample from surface outcrop stripping that returned a result of 25 g/t Au coincident with a subsurface apparent resistivity anomaly. SR-12-06 tested the same IP target on Line 3, 200m to the east along strike from SR-12-05. SR-12-07 was drilled 250 m south of SR-12-05 on Line 2 testing a parallel IP target. Hole SR-12-08 then moved 800 m north along Line 2 testing a third IP target. Hole SR-12-09 also drilled this same IP target along strike 200m east on line 3 (see Table 1).

Table 1:
Hole Line East North Projection Dip Azimuth Depth
SR-12-05 L2 426,800 5,266,500 UTM Zone 17 -60° 180° 497m
SR-12-06 L3 427,000 5,266,500 UTM Zone 17 -60° 180° 510m
SR-12-07 L2 426,800 5,266,250 UTM Zone 17 -60° 170° 508m
SR-12-08 L2 426,800 5,267,050 UTM Zone 17 -60° 175° 498m
SR-12-09 L3 427,000 5,267,150 UTM Zone 17 -60° 175° 506m

Observations from the first three drill holes of the program indicated a more mafic rock sequence of monotonous repetitive shear zones and very little alteration. Hole SR-12-08 provided the first indications of the same host rock type and alteration as was seen at Clam Lake. More substantial gold mineralization was first encountered in hole SR-12-09 (see Table 2) and the style and consistency of this mineralization is encouraging and re-enforces the concept of the Côté Lake - Clam Lake trend extending well beyond the currently defined boundaries. Interpretation of the data implies that these narrow zones of gold mineralization may represent stringers peripheral to the main lode.

Table 2:
Hole From
SR-12-05 143.0 144.0 1.0 0.59
SR-12-05 167.0 170.0 3.0 0.32
SR-12-05 241.0 242.0 1.0 0.96
SR-12-07 152.5 153.0 0.5 0.53
SR-12-08 488.0 489.0 1.0 0.44
SR-12-09 21.5 22.5 1.0 1.08
SR-12-09 33.0 34.0 1.0 0.86
SR-12-09 134.0 135.0 1.0 0.63
SR-12-09 158.0 159.0 1.0 0.46
SR-12-09 224.0 225.0 1.0 0.43
SR-12-09 257.0 258.0 1.0 2.20
SR-12-09 331.0 334.0 3.0 0.39
SR-12-09 363.0 364.0 1.0 0.79
SR-12-09 415.5 416.5 1.0 1.30
SR-12-09 433.0 434.0 1.0 2.83
SR-12-09 500.1 500.5 0.4 1.78
1. True widths of intersections are unknown at this time.
2. Mineralized intervals are calculated using the weighted Au average based on length of sample, a lower cut-off of 0.3 g/t Au and an upper cut-off of 25.0 g/t Au, including low grade zones no greater than 20 metres in length.
To date, Sanatana has completed 14 drill holes of which ten have encountered significant gold mineralization with the best intersections shown in the table below.
Hole From
SR-11-01 238.5 257.0 18.5 1.16
SR-11-02 110.0 124.0 14.0 0.67
SR-11-02 401.0 446.0 45.0 0.48
SR-11-02 472.0 480.0 8.0 1.21
SR-11-03 404.0 421.0 17.0 0.39
SR-11-04 114.5 129.5 15.0 0.42
SR-11-04 153.0 203.0 50.0 1.33 1.23
SR-11-04 252.5 273.0 20.5 0.87
SR-11-04 451.0 454.9 3.9 16.23 10.35
SR-11-05 166.0 225.0 59.0 0.30
SR-11-05 259.0 274.0 15.0 0.48
SR-11-05 321.0 359.0 38.0 0.48
SR-12-01 24.8 27.0 2.2 11.67
SR-12-01 265.0 321.6 56.6 0.43
SR-12-02 198.8 217.1 18.3 1.25 1.14
SR-12-03 185.0 214.0 29.0 0.36
SR-12-03 236.5 259.5 23.0 0.42
SR-12-03 281.9 308.0 26.1 3.96 0.76
SR-12-04 62.0 83.0 21.0 1.10
1. True widths of intersections are unknown at this time.
2. Mineralized intervals are calculated using the weighted Au average based on length of sample, a lower cut-off of 0.3 g/t Au and an upper cut-off of 25.0 g/t Au, including low grade zones no greater than 20 metres in length.
3. See the Company's news releases dated February 9, 2012, March 1, 2012 and April 20, 2012 for the first time disclosure of the above results. Copies of the news releases are available under the Company's SEDAR profile at

Peter Miles, President and CEO commented: "We are pleased by our drill results to date. In the Clam Lake area, Sanatana has likely extended Trelawney Mining & Exploration Inc.'s ("Trelawney" or "TRR") Côté Lake Deposit some 500 metres to the west. With our current drill program, we have now encountered gold mineralization another 1,500 metres west along strike of the Côté Lake Deposit. Although it is too early to draw any firm conclusions about the results from the current drill program, we are encouraged that, in the Chain of Lakes area, we are once again targeting the host lithology similar to the known Clam Lake gold mineralization."

Peter Miles further commented: "We have also noted the plan of arrangement between Trelawney and a wholly-owned subsidiary of IAMGOLD Corporation ("IAMGOLD"). We are pleased to see IAMGOLD'S interest in the Côté Lake Deposit and we look forward to working with IAMGOLD once IAMGOLD successfully completes the plan of arrangement with Trelawney expected to close June 21st."

Future Plans

Future drill plans will target four primary areas. Firstly, drilling in the Chain of Lakes area will continue towards the north and east attempting to traverse the host rock stratigraphy and test for wider zones of mineralization and potentially the main gold-bearing lode.

The Company will undertake exploratory drilling on mineral claim 3018412 west of Clam Lake and infill drilling on mineral claim 3011820 to better define the extent of mineralization identified in the earlier drill program.

Finally, Trelawney's latest interpretation of the Côté Lake Deposit indicates an almost due-north strike direction towards the Company's property boundary with TRR north of Côté Lake. Future drilling will also include this area north-east of Côté Lake where TRR has been drilling close to the Watershed Property boundary.

About the Watershed Property

Sanatana entered into the option and joint venture agreement for the Watershed Property with Augen Gold Corp. (as then was) on February 14, 2011 (the "Option and JV Agreement"). Augen Gold Corp. was subsequently acquired by Trelawney and renamed Trelawney Augen Acquisition Corp. ("TAAC"). The mineral claims comprising the Watershed Property are located within the Townships of Yeo, Chester, Neville and Benneweis in Ontario and total approximately 19,006 acres (the "Mineral Claims"). As summarized in the Company's news release of February 16, 2011, Sanatana has the option to earn a 50% undivided interest in the Claims (the "50% Interest") by paying to TAAC (formerly Augen Gold Corp.): (i) $150,000 in cash, (ii) issuing 5,000,000 common shares over a two year period and (iii) incurring $5,000,000 in exploration expenditures over a three-year period. Sanatana has the right to accelerate the above payments and expects to do so by the December 31, 2012. Sanatana has (i) paid TAAC $150,000 in cash, (ii) issued TAAC 3,500,000 common shares and (iii) as at May 24, 2012 has incurred $3,372,000 in work costs (as defined in the Option and JV Agreement).

Pursuant to the terms of the Option and JV Agreement, if Sanatana earns the 50% Interest in accordance with the provisions set forth above, it will have the right to earn a further 1% interest in the Mineral Claims for a total undivided interest of 51% by completing and delivering to TAAC a pre-feasibility study on or before March 23, 2016. The parties will enter into a joint venture agreement for the Mineral Claims in accordance with the terms of the Option and JV Agreement upon the earlier of the date that (i) Sanatana vested the 50% Interest but has elected by notice to TAAC not to proceed to earn the 51% Interest and (ii) Sanatana earned the 51% Interest.

About the Sampling

Samples were collected from split NQ2 drill core at a nominal 1 metre interval breaking at major geological boundaries such that no sample interval was less than 0.5 metres or greater than 1.5 metres. The samples were submitted to AGAT Laboratories (AGAT), Sudbury, Ontario for drying, crushing and pulverization in preparation for analysis of gold by Fire Assay and a suite of trace elements by ICP methods at the Mississauga, Ontario facility. Gold assay results measuring over 10 g/t are re-analyzed by Fire Assay using a gravimetric finish.

AGAT is accredited by the Standards Council of Canada, the Canadian Association for Laboratory Accreditation and QMI-SAI Global and is an ISO 9001 and 17025 certified analytical laboratory.

A rigorous QA/QC program was implemented as part of the sampling procedures throughout the drill program. Duplicate, standard and blank samples were inserted into the sample stream prior to being sent to the laboratory and the adherence of results to strict parameters was monitored.

Now that a significant number of QA/QC samples have been submitted and assay results received, review of the duplicate sample data has revealed significant variation in gold values above 0.1 g/t. This is indicative of coarse gold having an effect on collecting a representative aliquot of the crushed and pulverized sample. To gain a representative assay result, samples that return greater than 0.1 g/t Au will be re-submitted for "Pulp Metallic" analysis. This method involves pulverizing the entire coarse residue of the original sample down to 95% passing through the 75-micron screen. The entire plus size fraction is then analyzed by Fire Assay with a gravimetric finish and two aliquots of the minus sized fraction are analyzed by Fire Assay - ICP/MS finish. The resultant gold value is the weighted average of all three sub-samples. The Company will be re-submitting the coarse residues from all previously received drill sample assay results with gold greater than 0.1 g/t to obtain more accurate gold values of mineralized drillhole intervals.

About the Company

Sanatana Resources Inc. is a Canadian mineral exploration and development company focused on its Watershed property in Ontario. Sanatana has entered into an option and joint venture agreement with Trelawney Augen Acquisition Corp. (formerly Augen Gold Corp.) that grants Sanatana an option to acquire up to 51% of the Watershed property. With an experienced management team and board of directors, the Company has the ability required to identify, develop and fund economic mineral properties. Sanatana is based in Vancouver and is listed on the TSX Venture Exchange (TSX VENTURE:STA).

The technical portions of this news release were reviewed and approved by Troy Gill, Exploration Manager for the Company, a "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects.


Peter Miles, President and Chief Executive Officer

Cautionary Statement Regarding "Forward-Looking" Information

Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "plans", "expects", "intends", "is expected", "potential", "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond Sanatana's control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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