Simberi Gold Corporation
TSX VENTURE : SAU

Simberi Gold Corporation

July 04, 2005 16:05 ET

Simberi Gold Corporation: News Release

TORONTO, ONTARIO--(CCNMatthews - July 4, 2005) - Simberi Gold Corporation (TSX VENTURE:SAU) - Simberi Gold Corporation ("Simberi") Simberi is pleased to announce that it has completed a Letter of Intent ("LOI") with Mongal Gazar Resources Limited ("MGH") of Mongolia to acquire an initial 22% interest in its Olon Ovoot gold project in the South Gobi district of Mongolia. MGH will form a new company Mongolian Gold Mines Company ("MGMC") that will hold all the Olon Ovoot assets. Simberi will be the Manager of the Joint Venture and MGH will be the on-site operator however the exploration programs will be conducted through joint cooperation of the two parties.

Simberi will invest US$ 0.5 million in MGMC and pay MGH US$1.85 million and 9.3 million shares for its interest. Simberi will also pay a finders fee of 700,000 shares to The Balloch Group of Bejing. Simberi will have an option to purchase up to a 100% interest in the Olon Ovoot project from MGH with the purchase price being a discounted value based on the resources delineated at the time of the purchase.

The Olon Ovoot gold deposit is situated in the Southern Mongolia fold belt, a geologic terrain of considerable complexity containing a wide variety of mineral deposit types. Gold mineralization on the property is a combination of auriferous quartz veins, veinlets and stringers together with gold associated with sulphides such as pyrite, etc. within alteration haloes bordering the veins. In some areas these combine to produce mineralized zones of substantial grade and thickness. The dominant host rock within the deformed assemblage is the Lower to Middle Devonian diorite. The main mineralized areas of current interest are located within the surficial zone of oxidation, which is up to 100 metres deep.

The Property contains three significant gold occurrences along with several additional zones of mineralization that have not been explored in any detail. The three main areas are; the Olon Ovoot Gold prospect, the Diorite, and the Burkhan Del prospecting areas. The Olon Ovoot contains four gold-bearing zones have been partly delineated by exploration; the Khuren Tolgoi, Tsagaan Tolgoi, Central and Eastern Zones. The exploration completed to date includes:



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Trenching 15,000 m3
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Diamond Drilling 10,800 m
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RC Drilling 10,500 m
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Total Samples 26,500
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Surveying 25,000 ha
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Geophysical Surveys 25,000 ha
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Geochemical Surveys 7,500 ha
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The exploration work by MGH has delineated significant mineralized zones that can be mined by open pit however the resource estimates are not in compliance with western standards. MGH has constructed a 600 tonne per day concentrator on site and is in the process of completing a CIP plant to process the ore. It is anticipated that some test mining will commence later this year while the exploration program and subsequent mine planning is being completed.

MPH of Toronto has been engaged to manage a detailed drilling exploration program that includes geophysics. MPH will also prepare a NI 43-101 report on the project.

Simberi is now completing its due diligence on the project and proceeding to prepare the formal documentation for the transaction.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are Canadian dollars unless otherwise noted.

The TSX Venture Exchange Inc. has neither approved nor disapproved the information herein contained.

Contact Information

  • Simberi Gold Corporation
    Mike Newbury
    (416) 815-8666