VANCOUVER, BC--(Marketwire - Jun 6, 2012) - Lori McClenahan, President of Intigold Mines Ltd. (TSX VENTURE: IGD) and St. Elias Mines Ltd. (TSX VENTURE: SLI) (PINKSHEETS: SELSF) (US Clearing Symbol: SELSF) (FRANKFURT: EKL), provides the following update with respect to the Cueva Blanca gold property located in northwest Peru. The property is owned 100 per cent by St. Elias Mines Ltd ("St. Elias"). Intigold Mines Ltd. ("Intigold") has an option to acquire a 60 percent interest in the property.
St. Elias and Intigold have initiated field studies in the Cueva Blanca area in preparation for diamond drilling. At this time, it is anticipated that very little fieldwork will be required prior to mobilizing drilling equipment and crews to the site. The initial drilling targets include the Cruz vein, the Cruz breccia bodies, and a stratiform silicified zone that has anomalous bismuth-mercury geochemistry. The economic targets at the property are gold and silver.
The first phase drilling program is budgeted at $2,500,000. This program will consist of approximately 10,000m of drilling and will commence as soon as required permits and permissions are received by the St. Elias and Intigold. The primary target of the drill program will be the gold-silver bearing Cruz vein system. The target areas are along strike and down dip from the previously drilled area of the vein. Infill and confirmation holes will also be completed in certain sections of the previously drilled areas of the vein system. In these areas, detailed information is lacking because rough terrain prevented the construction of drill platforms at the desired 50-metre spacing along strike. The planned program will utilize man-portable drills that can be sited almost anywhere, whereas the previous drilling used a Longyear LF-70 skid-mounted drill that required road access.
Please refer to previous news releases on the Cueva Blanca Property, including the news release dated May 1, 2012.
On May 31, 2012, Candente Copper Corp. announced that the Peruvian Ministry of Energy and Mines of Peru (DGAAM) has granted a drilling permit for its Canariaco property. The Canariaco property, adjoining the Cueva Blanca Property to the east, is a large-scale copper/gold porphyry system that is in the final stages of a feasibility study.
CUEVA BLANCA PROPERTY AGREEMENT
Intigold acquired an option to earn a 60-per-cent carried interest in the property, subject to a 1.5-per-cent net smelter return royalty, from St. Elias in consideration of Intigold making cash payments of $200,000 to St. Elias over a two-year period, issuing one million common shares in the capital of Intigold to St. Elias and incurring $1.5-million in exploration expenditures on the property over a three-year period.
In addition, Intigold has the right to purchase one-half of the 1.5-per-cent NSR from St. Elias for the sum of $1.5-million, thereby reducing the NSR payable from 1.5 per cent to 0.75 per cent.
CUEVA BLANCA PROPERTY
The property covers approximately 5,000 hectares (50 square kilometres) and is located in the Lambayeque department in northwestern Peru, within the northern Peru Miocene metallogenic belt. This belt is defined by a large number of world-class gold and copper-gold deposits of similar age (five million to 25 million years). Giant gold deposits within this belt include Yanacocha, Lagunas Norte and Pierina. Also of great importance are world-class copper-gold porphyry deposits, such as Rio Blanco, Canariaco, La Granja, Cerro Corona, Minas Conga-Galeno-Michiqillay, Magistral and Antamina. The giant gold deposits and the Cu-Au porphyries often occur in clusters (for example, Yanacocha-Conga-Galeno-Michiqillay). Discrete vein and breccia-hosted deposits of gold and polymetallic mineralization occur adjacent to some copper porphyry deposits.
The Cueva Blanca property is bordered to the south and southeast by mineral concessions of Vale S.A., and Barrick Gold holds extensive mineral concessions four kilometres to the north.
The property lies within the northern member of a pair of profound east-west tectonic warps that cross northern Peru. These flexures are marked by an abrupt change in the direction of the regional geological trend from northwest to east-west. Within the southernmost of these tectonic features are the multimillion-ounce Yanacocha gold mine and numerous Cu-Au porphyry deposits. Both the northern and southern structures are on the order of 60 to 80 kilometres wide; they extend right across the Andes from the Pacific Ocean to the Amazon River basin.
The locations of the giant Yanacocha gold mine and other gold deposits and Cu-Au porphyries of the Cajamarca district may be controlled or at least influenced by east to northeast structures within the large-scale southern tectonic flexure. The Cueva Blanca property, as well as the Canariaco and Rio Blanco Cu-Au porphyries and gold prospects such as Las Huaquillas (Inca One) and Rio Tabaconas (Golden Alliance), appear to be with the northern tectonic flexure.
An important feature of the Cueva Blanca property is the Cruz gold/silver epithermal vein system. Some examples of exceptional classic epithermal deposits with geologic characteristics similar to the Cruz vein system are Kupol (Russia), El Penon (Chile), and Tayoltita, Guanajuato and Pachuca (Mexico).
Exploration at Cueva Blanca has followed a classic pattern: acquisition based on geologic reasoning, property-wide prospecting and subsequent discovery of precious metal showings, detailed surface exploration of mineralized zones and preliminary diamond drilling. The historical results provide an indication of the potential of the property and are relevant to continuing exploration.
The previously announced exploration and confirmation work program that was conducted in 2011 consisted of sampling of outcrops and trenches at the Cruz vein system. Fire assays of irregularly-spaced samples along a strike length of 850 metres returned a length-weighted average grade of 2.84 g/t gold across an average width of 4.3 metres. These results are not representative of the true grade, width, or length of the vein system, because the sample locations were restricted to natural outcrops and trenches excavated in areas of shallow overburden, at arbitrary points along an 850-metre strike interval of the vein system. However, the results are consistent with historical sample results in the same area, and at the least they provide an incomplete and preliminary indication of the dimensions and grades of the exposed sections of the vein system.
Historical exploration work on the Cruz vein system included 91 trenches and 18 drill holes totaling 1,860 metres. This work established that the Cruz quartz veins have consistent anomalous gold and silver grades, and that the vein system appears to be a classic epithermal gold-silver deposit. Historical results of gold assays from drill core samples taken during the 1997 Cruz vein drill program include core intervals (not true widths) of 6.0 metres of 2.31 grams per tonne, 6.0 metres of 2.96 grams per tonne (including 1.75 metres of 7.45 grams per tonne), 1.5 metres of 22.68 grams per tonne, 9.5 metres of 8.09 grams per tonne (including 1.5 metres of 35.84 grams per tonne), 10.8 metres of 2.4 grams per tonne and 1.2 metres of 6.95 grams per tonne. The vein intersections contain virtually no sulfides. The vein system is open to depth, and along strike to the southeast and northwest of the drilled area (Summary report, Sivertz, 1999).
While the Companies have no reason to doubt the accuracy of the historical results, the existing data should not be relied upon until the Companies' own exploration work confirms that the data meet National Instrument 43-101 standards for disclosure. Historical results and the work that generated them predate the enactment of National Instrument 43-101, and may not meet the requirements of that policy.
The technical content of this news release has been verified by George Sivertz, P.Geo, a Canadian geologist with extensive experience in Peru who is a "qualified person" as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects.
"The boards of directors of Intigold and St. Elias are excited at the prospect of beginning a new phase of advanced exploration of the Cueva Blanca property, which is known to host gold-silver mineralization in epithermal vein systems," states Lori McClenahan, President and Chief Executive Officer.
For additional information about Intigold Mines Ltd. and its projects, please visit us at www.intigold.com or call 1-888-895-5522 (toll free US and Canada). For information about St. Elias Mines Ltd. visit www.steliasmines.com or call 1-888-895-5522 (toll free US and Canada).
INTIGOLD MINES LTD. AND ST. ELIAS MINES LTD.
(Signed "Lori McClenahan")
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this document.
This News Release may contain forward-looking statements including, but not limited to, comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statement