Sanatana Resources Inc.
TSX VENTURE : STA

Sanatana Resources Inc.

November 10, 2015 14:29 ET

Sanatana Reports Exploration Results on Clam Lake Property and Announces Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 10, 2015) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES

Sanatana Resources Inc. ("Sanatana" or the "Company") (TSX VENTURE:STA) announces that Trelawney Mining and Exploration Inc. ("Trelawney"), a wholly-owned subsidiary of IAMGOLD Corporation, completed further exploration and trenching on the Clam Lake Property in the summer of 2015. The preliminary results of the exploration program were recently received by Sanatana and are summarized below.

Sanatana also announces a non-brokered private placement to raise up to $600,000, all on the terms set forth below.

With respect to the exploration results Peter Miles President and CEO of Sanatana stated: "The results highlight both the prospectivity potential of the area around the Côté Gold Project and alternative geologic opportunities to the low to mid-grade Côté Deposit type. In addition, it is encouraging to see Trelawney react to the positive results and immediately initiate drilling of the target to test for strike potential of the Pyrite-Sphalerite Zone along with further drilling of the Hava Deformation Zone."

Summary of Clam Lake Property Exploration Results

The exploration program conducted by Trelawney focused on two areas of the Clam Lake Property. Specifically, the previously discovered high grade gold Hava Deformation Zone ("HDZ") and the Pyrite-Sphalerite Zone ("PSZ").

The HDZ was discovered during the 2013 drilling campaign (CLM13-02, 5 metres (2.5m true width) @ 63.2 g/t Au from 143 metres), was drilled again in 2014 and has been freshly exposed in 2015 through additional mechanical stripping and washing on surface. The HDZ is a ductile shear zone hosting sheeted sub-parallel to parallel lenses and pods of boudinaged quartz veins with semi massive fracture filling chalcopyrite-pyrite-pyrrhotite-bornite (on fracture faces) and also accessory telluride minerals, electrum and visible gold trending east-west along the contact between quartz diorite and tonalite country rocks (Map 1 below). The HDZ displays strong to intense pervasive sericite-biotite-chlorite and patchy carbonate alteration envelope in the host lithologies. To date the zone has been identified along 300 metres of strike length and to a vertical depth of 185 metres by drilling and exposed through mechanical stripping over a distance of 130 metres. Assay results from channel samples collected from the newly stripped outcrops have not yet been received, but a five diamond drill hole program totalling 1,085 metres has been initiated to test the mineralized zone 100 metres along strike to the east and to a vertical depth of 225 metres.

The Pyrite-Sphalerite Zone ("PSZ") was intersected in drill hole CLM14-08 as a gold bearing pyrite and sphalerite sulphide rich interval (0.8 metres @ 9.33 g/t Au from 73.6 metres). Hand stripping, mapping and sampling of outcrop in manually stripped old trenches over the surface projection of the PSZ resulted in the collection of 37 predominantly channel samples. Highlights of the sampling appear in Table 1 below. At this stage the PSZ can best be described as a series of narrow quartz sulphide and massive sulphide veins trending at 075° (Map 1 below). Despite the narrow nature of these veins, preliminary assay results reveal all vein material to be highly anomalous in Au, and the 075° trend of the veins has not been rigorously explored. The elevated Au in association with sphalerite and arsenopyrite as well as the trend of the veins suggest that this system may not be related to the HAVA deformation zone but rather to a separate base-metal and gold bearing structure that remains open and untested along strike. The PSZ is expected to be tested at generally shallow depths (50-60m vertical) with two holes totalling 275 metres. The objective is to confirm the possibility of a strike extension.

Table 1

Trench Sample # Zone Type Descripton Au g/t Ag g/t Cu % Pb % Zn %
TRENCH-AP1 166802 West Side Trenches - along strike of CLM14-08 PSZ up dip surface projection Grab-Float Tonalite hosting 5cm Qtz-sulphide vein 066'/68'. Weak pervasive chlorite alteration, moderate pervasive silicification. 25% vein pyrite, 2% vein chalcopyrite plus trace disseminated pyrite. 17.0 - - - -
TRENCH-AP1 166803 Grab-Qtz Vein 14.2 36.6 0.08 0.03 0.87
TRENCH-AP2 166805 Grab-Float Tonalite hosting 5cm Qtz-sulphide vein 067'/74'. Weak pervasive chlorite alteration, moderate pervasive silicification. 30% vein pyrite, 5% vein chalcopyrite plus 5% disseminated pyrite and 2% disseminated chalcopyrite. 26.0 - - - -
TRENCH-AP2 166806 Grab-Qtz Vein 11.6 127 2.54 0.06 0.07
TRENCH-AP3 166808 Grab-Float Tonalite with arsenopyrite vein. Weak spt carbonate, Moderate pervasive chlorite and silicification. 4% disseminated pyrite, trace disseminated chalcopyrite, 1cm arsenopyrite vein. 8.74 5.56 - 0.01 0.39
TRENCH-AP7 166817 Grab-Qtz Vein Tonalite hosting 4cm Qtz-sulphide vein 066'/68'. Weak spt chlorite and biotite alteration, moderate pervasive silicification. 25% vein pyrite, trace vein chalcopyrite plus 3% disseminated pyrite. 8.73 13.5 - - -
TRENCH-AP7 166818 Grab-Float 12.6 60.2 1.88 0.02 -
TRENCH-AP8 166820 Grab-Qtz Vein Tonalite hosting 4cm Qtz-sulphide vein 066'/68'. Weak pervasive chlorite and spt biotite alteration, moderate pervasive silicification. 25% vein pyrite, 1% vein chalcopyrite and 1% vein pyrrhotite plus 3% disseminated pyrite. 77.5 - 0.36 0.04 0.13
TRENCH-AP8 166822 Grab-Float 11.6 15.2 0.37 0.01 0.07
TRENCH-AP9 166823 Grab-Qtz Vein + Wall Rock Tonalite wallrock plus 60% qtz-sulphide vein 066'/068'. Weak spt carbonate, weak pervasive chlorite, weak spt biotite alteration, moderate pervasive silicification. 15% vein pyrite, 2% vein chalcopyrite plus 3% disseminated pyrite in wallrock. 50.9 41.9 - - -
TRENCH-AP9 166826 Grab-Qtz Vein + Wall Rock 1.92 - - - -

To view 'Map 1', please visit the following link: http://media3.marketwire.com/docs/tana1110.pdf

Clam Lake Property Description

The Clam Lake Property consists of unpatented mining claims 4240522, 4241016 and 4220425 situated in Yeo and Chester townships, Ontario. The Clam Lake Property is held under the terms of a Mining Claim Acquisition Agreement (the "Acquisition Agreement") pursuant to which Trelawney holds a direct 80% interest. The remaining 20% undivided legal and beneficial interest in the Clam Lake Property (the "20% Interest") forms part of the Watershed Property and is held for the benefit of Sanatana and TAAC pursuant to the Option and JV Agreement. Sanatana currently holds a 10% interest in the Clam Lake Property and if Sanatana exercises its right to acquire a further 1% in the Watershed Property Sanatana will hold a 10.2% interest in the Clam Lake Property.

The 20% Interest is identified as a "carried interest" under the Acquisition Agreement and is defined to mean that until completion of a positive prefeasibility study, all costs and expenses of the exploration programs, preparation and filing of assessment reports and other obligations relating to the Clam Lake Property are the sole and exclusive obligation and liability of Trelawney and Sanatana will not have any obligation or liability in respect thereof. For additional information on the Clam Lake Property see the Company's news release dated July 25, 2013 (a copy of which is available under the Company's SEDAR profile at www.sedar.com).

Private Placement

Pursuant to a discretionary waiver of the $0.05 minimum pricing requirement granted by the TSX Venture Exchange (the "Exchange") Sanatana also announces that it intends to complete a non-brokered private placement of flow-though common shares and non flow-through units (together, the "Private Placement").

Sanatana intends to issue up to 11,428,572 flow-through common shares at a price of $0.035 per flow-through common share (the "FT Shares") for gross proceeds of up to $400,000. The FT Shares will entitle the holder to receive the tax benefits applicable to the FT Shares, in accordance with the provisions of the Income Tax Act (Canada).

Sanatana also intends to issue up to 6,666,667 non flow-through units at a price of $0.03 per non flow-through unit (the "NFT Units") for gross proceeds of up to $200,000. Each NFT Unit will consist of one non flow-through common share and one half of one non flow-through common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder to purchase one additional non flow-through common share of the Company at an exercise price of $0.10 for a period of three years from the date of closing.

Sanatana may pay a finder's fee on the Private Placement in cash, securities, or a combination of both, within the maximum amount permitted by the policies of the Exchange.

The Private Placement is open to all existing shareholders of the Company as well as pursuant to other available prospectus exemptions. The Private Placement is subject to Exchange final acceptance. The Private Placement is subject to a minimum $5,000 aggregate subscription from each subscriber.

Assuming the Private Placement is fully subscribed, the Company intends to allocate the net proceeds as follows: (1) $400,000 associated with exploration work on Sanatana's exploration properties and (2) the balance for general working capital purposes.

Although the Company intends to use the proceeds of the Private Placement as described above, the actual allocation of net proceeds may vary from the uses set forth above, depending on future operations or unforeseen events or opportunities. There is no minimum offering size and if the Private Placement is not fully subscribed, the Company will apply the proceeds of the Private Placement to the above uses in priority and in such proportions as the Board of Directors and management determine is in the best interests of the Company.

All securities issued in connection with the Private Placement will be subject to a four month hold period in accordance with applicable securities laws.

Existing Shareholder Exemption

Depending on demand and regulatory requirements, a portion of the Private Placement may be made in accordance with the provisions of the existing shareholder exemption (the "Existing Shareholder Exemption") contained in Multilateral CSA Notice 45-313 Prospectus Exemption for Distributions to Existing Security Holders, and the various other corresponding blanket orders and rules in each of the provinces and territories of Canada, such to the terms and conditions therein. In addition to conducting the Private Placement pursuant to the Existing Shareholder Exemption, the Private Placement will also be available under other prospectus exemptions, including sales to accredited investors and to close personal friends and business associates of directors and officers of the Company.

Sanatana has set November 9, 2015 as the record date (the "Record Date") for the purpose of determining existing shareholders entitled to purchase Shares pursuant to the Existing Shareholder Exemption. Subscribers purchasing FT Shares or Units under the Existing Shareholder Exemption will need to represent in writing that they meet certain requirements of the Existing Shareholder Exemption, including that they were, as of the Record Date and continue to be as of the date of closing for their subscription, a shareholder of Sanatana. The aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot exceed $15,000 unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment.

Unless Sanatana determines to increase the gross proceeds of the Private Placement and receives Exchange approval for such increase, if subscriptions received for the Private Placement based on all available exemptions exceed the maximum Private Placement amount of $600,000, subscriptions will be accepted at the discretion of the Company such that it is possible that a subscription received from a shareholder may not be accepted by the Company if the Private Placement is oversubscribed.

In accordance with the Existing Shareholder Exemption, the Company confirms there is no material fact or material change related to the Company which has not been generally disclosed.

Existing shareholders of Sanatana are directed to contact the Company for further information concerning subscriptions for Shares pursuant to the Existing Shareholder Exemption.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities issued, or to be issued, under the Private Placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About the Company

Sanatana Resources Inc. is a Canadian mineral exploration and development company focused on its Watershed Property in Ontario. Sanatana entered into an option and joint venture agreement with Trelawney Augen Acquisition Corp. (formerly Augen Gold Corp.) ("TAAC") which grants Sanatana an option to acquire up to 51% of the Watershed Property consisting of 46 mining claims totalling approximately 19,006 acres and located within the townships of Yeo, Chester, Neveille and Benneweis. As at November 28, 2012, Sanatana exercised its first option and is the legal and beneficial owner of 50% of the Watershed Property. Sanatana has until March 23, 2016, to exercise its right to acquire a further 1% in the Watershed Property.

In June 2012, IAMGOLD Corporation completed its acquisition of Trelawney Mining and Exploration Inc. and became the sole indirect shareholders of TAAC. In 2013, Sanatana expanded the Watershed Property by acquiring, for the sole benefit of Sanatana and TAAC, a 20% interest in three additional mining claims located in Yeo and Chester Townships, Ontario.

In addition to the Watershed Property, Sanatana also has exploration property in Saskatchewan. 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).

Technical Review

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

SANATANA RESOURCES INC.

Peter Miles, President and Chief Executive Officer

Cautionary Statement Regarding "Forward-Looking" Information

Some of the statements contained in this news 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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