Sanatana Resources Inc.

Sanatana Resources Inc.

April 20, 2012 09:11 ET

Sanatana Reports on Watershed Property Exploration Program-Highlights Include 2.2 m @ 11.67 g/t Au and 26.1 m @ 3.96 g/t Au

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 20, 2012) - Sanatana Resources Inc. ("Sanatana" or the "Company") (TSX VENTURE:STA) is pleased to provide assay results from the final four holes (SR-12-01 to SR-12-04), of the nine-hole Clam Lake claim drill program.

Hole SR-12-01 was designed to test the small IP target in the southwest part of claim 3011820 on line 13. Holes SR-12-02 and SR-12-03 were drilled on the southern portions of lines 14 and 16 respectively to test the interpreted up-dip occurrence of mineralization observed in holes SR-11-04 and SR-11-01 on the same lines. Hole SR-12-04 was an infill drill hole on line 15 between holes SR11-03 and SR11-05 targeting the IP anomaly and surface geochemistry at shallower depth to confirm continuity of the mineralization.

Gold mineralized downhole intervals are provided in Table 1 using a 0.3 g/t Au lower cut-off and details of collar locations can be seen Table 2 below.

Based on the observations and assay results from all nine drill holes reported on to date, gold mineralization is present as a lower grade disseminated zone hosted in an intensely silicified breccia. Within and immediately peripheral to these lower grade zones, high grade gold occurs variously associated with quartz veins, structures, and areas of the most intense alteration.

Quartz lode vein gold has been mined in the region in the past at operations such as Young-Shannon 2 km northeast of the mineral claim. The wider alteration system exhibits textures and mineralogy similar to that described by Trelawney Mining and Exploration Inc. (TSX VENTURE:TRR) ("Trelawney") at the Cote Lake deposit on Trelawney's adjacent property.

Based on assay results from the nine-drill hole program on the Clam Lake claim 3011820, the Company has defined a zone of gold mineralization with a lateral extent up to 300 metres wide in the north-south direction. Along strike, the mineralization extends from the Trelawney claim boundary in the east to the shores of Clam Lake in the west, a length of 300 metres and is open in both directions. The drilling has shown the mineralization extending to a vertical depth of approximately 400 metres and this also remains open at depth. Geological interpretation of the data indicates it is unlikely that this is a separate zone of gold mineralization confined to the boundaries of the mineral claim. The most probable conclusion is that this zone of gold mineralization is an extension of the Cote Lake gold deposit, based both on our results and observations of the drill core, and the fact Trelawney drill hole E11-82 has now been included in the Cote Lake deposit NI 43-101 resource estimate update (Trelawney news release February 24, 2012 and website updates since) located on the adjacent property only 250 metres due east of the boundary of the Watershed mineral claim 3011820.

Table 1: Gold Assay Results
From To Length Uncut Au Cut Au
Hole m m m g/t g/t
SR-12-01 24.8 27 2.2 11.67
SR-12-01 24.8 25.8 1 24.30
SR-12-01 61 81 20 0.35
SR-12-01 79.2 80 0.8 7.23
SR-12-01 143 153 10 0.57
SR-12-01 143 144 1 4.75
SR-12-01 193.4 194.2 0.8 0.60
SR-12-01 265 321.6 56.6 0.43
SR-12-01 294.7 295.7 1 5.37
SR-12-01 346.4 347 0.6 1.36
SR-12-01 358 359 1 0.38
SR-12-02 120.9 121.6 0.7 0.61
SR-12-02 137.4 143 5.6 0.75
SR-12-02 175 176 1 0.34
SR-12-02 198.8 217.1 18.3 1.25 1.14
SR-12-02 198.8 199.1 0.3 31.70 25.00
SR-12-02 203.1 203.5 0.4 13.60
SR-12-02 246 252 6 0.37
SR-12-02 261.6 262 0.4 0.42
SR-12-02 274 275 1 2.11
SR-12-02 284 286 2 0.43
SR-12-02 364.8 365.1 0.3 0.30
SR-12-02 372 373 1 0.47
SR-12-03 135.1 140.5 5.4 0.44
SR-12-03 155.5 156.5 1 0.42
SR-12-03 159.5 160.5 1 0.34
SR-12-03 175 176 1 0.30
SR-12-03 185 214 29 0.36
SR-12-03 236.5 259.5 23 0.42
SR-12-03 281.9 308 26.1 3.96 0.76
SR-12-03 285.3 285.8 0.5 192.00 25.00
SR-12-03 336 343.6 7.6 0.35
SR-12-03 379.9 387 7.1 0.30
SR-12-04 6.6 7 0.4 0.43
SR-12-04 62 83 21 1.10
SR-12-04 77.0 78.0 1.0 16.00
SR-12-04 182 186 4 2.72
SR-12-04 184.0 185.0 1.0 8.07
SR-12-04 291 297 6 1.55
SR-12-04 295.0 296.0 1.0 5.01
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.
Table 2: Drill Collar Locations and Orientation
Hole Line East North Projection Dip Azimuth Depth
SR-11-01 L16 428,665 5,266,760 UTM Zone 17 -60° 160° 575m
SR-11-02 L16 428,665 5,266,760 UTM Zone 17 -70° 160° 674m
SR-11-03 L15 428,565 5,266,750 UTM Zone 17 -60° 160° 491m
SR-11-04 L14 428,479 5,266,762 UTM Zone 17 -60° 160° 560m
SR-11-05 L15 428,626 5,266,615 UTM Zone 17 -60° 160° 401m
SR-12-01 L13 428,465 5,266,602 UTM Zone 17 -60° 160° 392m
SR-12-02 L14 428,522 5,266,608 UTM Zone 17 -60° 160° 401m
SR-12-03 L16 428,720 5,266,615 UTM Zone 17 -60° 160° 401m
SR-12-04 L15 428,585 5,266,705 UTM Zone 17 -60° 160° 300m

Peter Miles, Chief Executive Officer, stated, "We are encouraged that all nine holes in the Clam Lake drill program are mineralized. Gold mineralization has now been delineated right up to the eastern boundary of the mineral claim and likely extends beyond the claim area to the east. It is now considered less likely that this is an isolated mineralized zone. Based on our geological interpretation of these results and from information publically available on the Trelawney website and on SEDAR, we can state with increased confidence that we likely encountered the westernmost extension of Trelawney's Cote Lake deposit. If we have encountered the westernmost extension of Trelawney's Cote Lake deposit, these results indicate that the Cote Lake deposit likely extends more than 500 metres to the west of Trelawney's hole E11-82 and remains open both along strike and to depth. Sanatana expects to complete a 5,000 metre drill program, conduct a geophysical soil sampling program over the entire Watershed property and, as a result, have spent sufficient funds to earn a 50% undivided interest in the Watershed claims by December 31, 2012."

Current Exploration Activities

Drilling has commenced in the Chain of Lakes area, targeting a significant IP anomaly located approximately 1,500 metres west of mineral claim 3011820, where, late last year, a 25.1 g/t Au grab sample was collected from the Company's outcrop stripping program. One drill hole was completed for a total depth of 497 m and the drill was moved to the next setup before drilling was halted due to road access difficulties through spring break-up. Drilling should resume in the next few weeks. A 5,000 m drill program is planned for the initial testing of this area in 2012.

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 March 14, 2012 has incurred $2,372,000 in work costs (as defined in the Option and JV Agreement).

Pursuant to the terms of the Option and JV Agreement, if Santana 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, ON 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 ON 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 with interests in Ontario, Yukon and the NWT. 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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