StoneShield Capital Corp.
TSX VENTURE : STS
FRANKFURT : 5XS

StoneShield Capital Corp.

January 25, 2012 03:01 ET

StoneShield Executes Option to Acquire Drill-Ready Panamint (Goldtooth) Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 25, 2012) - StoneShield Capital Corp. (TSX VENTURE:STS)(FRANKFURT:5XS) ("StoneShield" or the "Company") is pleased to announce that it has entered into a definitive Option Agreement with Bronco Resources Corporation ("Bronco") under the same terms and conditions as the Letter of Intent ("LOI"), previously announced by the Company on October 3, 2011, to acquire the Panamint Gold Project adjacent to the Briggs Gold Mine, Inyo County, CA. The Company has since changed the name of the Panamint to that of the Goldtooth Project ("Goldtooth").

Goldtooth consists of two main claim blocks totaling 162 lode mining claims and 10 associated placer mining claims which cover a combined 2003 hectares of land. These claims lie in the same mineral belt as the Briggs Gold Mine ("Briggs") owned and operated by Atna Resources Ltd. Current known gold at Briggs totals some 1.13 million ounces of gold (NI 43-101 Technical Report, Briggs Project). Prior production at Briggs is 550,000 ounces of gold.

"StoneShield is pleased with the very reasonable terms of the Goldtooth option agreement and is eager to explore and drill the Goldtooth Project. It is the most advanced-stage project the Company has yet acquired and lies next to a profitable, operating mine." commented StoneShield President/CEO Kris Kottmeier. "The Company has retained the services of a top, new consulting geologist familiar with Briggs-style geology and mineralization to assist with the Goldtooth exploration. StoneShield's Chief Geologist has direct experience in this prolific mining region and, along with the Company's three geologist board members, agrees the potential for the discovery of significant, new gold deposits at Goldtooth is excellent."

The southern Goldtooth claim block is located approximately 600 metres from the Goldtooth pit, which is the southernmost production pit at Briggs. Drilling across the Goldtooth Fault feeder structures adjacent and beneath the Goldtooth pit on the Briggs mine property has intercepted potentially underground mineable mineralization such as 87 metres of 12.88 grams per tonne ("g/t") gold and 38m of 12.75 g/t gold. Canyon Resources was the discoverer of the Briggs deposit and former owner/operator of the Briggs mine. (http://www.canyonresources.com/projects/goldtooth.php).

Similar potential for both open pit and underground mineable gold deposits exists on the Goldtooth property. The Goldtooth Fault is believed to run the entire length of the southern Goldtooth claim block along the range front beneath thin alluvial cover. High-grade surface grab rock samples collected by Bronco on the Goldtooth claims near the range front include 18 g/t gold, 30 g/t gold, 37 g/t gold, and 61 g/t gold. East-west cross faults control formation of gold deposits at Briggs, are inferred to intersect the Goldtooth Fault in numerous locations of the southern Goldtooth claim block and represent attractive, permitted drill targets. Despite excellent surface indications, the southern Goldtooth claim block has never been drill tested.

The northern Goldtooth claim block is located just to the west of the Goldtooth Fault and contains several areas of widespread gold mineralization. Surface grab rock samples assay up to 27.0 g/t, 3.3 g/t and 1.7 g/t gold. A total of nine shallow drill holes have been completed during the 1990s by previous companies on the northern Goldtooth claim block. All holes contain gold mineralization, including 20 metres of 2.33g/t gold, 15 metres of 1.6 g/t gold and 24 metres of 1.16 g/t gold. StoneShield is evaluating options for a geophysical survey in the area and will begin the process of permitting a drill program for the 2012-13 field season.

The western slope of the Panamint Mountain range is composed of rocks ranging in age from Precambrian to Quaternary. Prior exploration in the area has focused on both Precambrian-age rocks and rocks thought to represent Tertiary-age volcanic units. Both rock types have undergone significant amounts of deformation. Mineralization in both rock types is thought to be epithermal, and consists of a simple assemblage of gold, pyrite, Fe-rich dolomite and quartz. Although the gold mineralization is a replacement phenomenon, the distribution of mineralization is structurally controlled. The mineralization is controlled by both high- and low-angle faults. The Goldtooth exploration model is based on favorable district wide geology and gold mineralization already discovered immediately adjacent to the property. StoneShield believes that the Goldtooth claims have potential for both large, open pittable, heap-leachable gold deposits as well as for structurally-controlled, high-grade gold deposits mineable by underground mining methods.

StoneShield is pleased with the very reasonable terms of the Option Agreement. Under the terms of the Option Agreement, StoneShield will acquire a 100% interest in Goldtooth by making cash payments totalling US$900,000 over the next eight years and incur a minimum of US$2.1M in exploration expenditures over the next five years commencing on the first anniversary of the execution of the Option Agreement as follows:


Date of
Payment
Advance
Minimum
Royalty
Cash
Payments
Work
Commitments
Prior to
Anniversary
Date
Upon signing of Option Agreement $15,000 -
1st Anniversary $30,000 $200,000
2nd Anniversary $40,000 $300,000
3rd Anniversary $50,000 $500,000
4th Anniversary $75,000 $500,000
5th Anniversary $100,000 $600,000
6th Anniversary $150,000 $0
7th Anniversary $200,000 $0
8th Anniversary $235,000 $0
100% Earn In -Total: $900,000 $2,100,000

As previously announced, US$5,000 was paid to Bronco upon execution of the LOI. Within 10 business days of the execution of the agreement StoneShield will make a further payment of US$15,000 and thereafter agreed to amounts on the anniversary of the execution of the definitive agreement. Bronco shall retain a 2.5% net smelter returns royalty that can be acquired by StoneShield for US$500,000 cash for each 0.5%.

StoneShield is a publicly traded exploration company focused on the discovery of high-value precious metals deposits in North America. The Company's experienced management team boasts multiple discoveries, and brings over 145 years of combined experience in the mining and exploration sector. Please visit the Company's web site address at www.stoneshieldcapital.com.

ON BEHALF OF THE BOARD OF DIRECTORS OF STONESHIELD CAPITAL CORP.

Kris Kottmeier, President/CEO

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • StoneShield Capital Corp.
    Benjamin Curry
    Investor Relations
    (604) 689-2881 or toll free at 1-877-689-2881
    www.stoneshieldcapital.com