Strike Minerals Inc.

Strike Minerals Inc.

July 13, 2012 12:28 ET

Strike Minerals Announces Successful Underground Development and Temporary Suspension of Operations to Finalize Mining Plans and Financing Including a Private Placement of Up to $3,000,000

TORONTO, ONTARIO--(Marketwire - July 13, 2012) - Strike Minerals Inc. (TSX VENTURE:STK) ("Strike" or the "Company") is announcing that it is starting a 2 to 4 week temporary suspension of the underground exploration at the Edwards mine property. This suspension will allow the Company sufficient time to finalize plans for the commencement of mining of the Edwards #1 vein. Included in this process is: 1) completing a milling agreement; 2) finalizing a mining plan for the Edwards #1 and; 3) securing adequate financing for the commencement of mining and the continued underground development of the Edwards Mine project.

On the 60m level the Edwards #1 quartz vein that had significant gold values (See P.R. May 23, 2012 and June 6, 2012) has been followed for a total distance of 21m. Face chip sampling indicates a weighted average grade of 25.45 g/t Au over an average 1.5 metre mining width. The underground sampling consisted of continuous back and face sampling along the drift after every drill round.

The geological interpretation indicates that this vein is the downward extension of a zone that was intercepted on the 30m level drifting from the old Edwards shaft. That zone is reported historically to grade 0.407 oz/t with a 6.5 foot width over a drift length of 80 feet.

To date development mining has produced and placed on surface a total of 638 tonnes of material with an average grade of 12.8 gpt from the Edwards #1 vein and 325 tonnes grading 10.9 gpt from the Edward #5 vein. All assays were conducted underground by face sampling. Processing this material is pending a milling arrangement.

All assays were conducted at the Wawa Assay Lab operated by Westdome Gold Mines (not certified) located in Wawa, Ontario and performed by fire assay technique.

A feasibility study has not been completed and there is no certainty the current operations will be economically viable.

Michael Newbury, P. Eng. (ON), a "qualified person" as such term is defined by National Instrument 43-101 and a Director of Strike has verified the data disclosed in this news release, and has otherwise reviewed and approved the technical information in this news release on behalf of Strike.

The Company also announces that it will offer on a best efforts basis a non-brokered private placement of up to $3,000,000 in common share units and flow through units (the "Units Offering").

Strike will offer a combination of up to 10,000,000 Flow-Through Units ("FT Units") at a price of $0.10 per FT Unit and up to 23,529,412 common share units ("Common Unit") at a price of $0.085 per Common Unit. The proceeds from the issuance of FT Units will be used for Canadian exploration expenses (as defined under the Income Tax Act (Canada)) and will be renounced for the 2012 taxation year.

Each FT Unit consist of one (1) Flow-Through share of the Company ("Flow-Through Share") and one half (1/2) of one common share purchase warrant of the Company (a "Warrant") and each Common Unit consists of one (1) common share of the Company (a "Common Share") and one Warrant. Each full Warrant entitles the holder to acquire one Common Share of the Company at a price of $0.12 per Common Share for a period of 12 months from the closing date. Agents will be entitled to a cash commission in the amount of 8% of the gross proceeds received from the sale of the Offering, and broker warrants ("Broker Warrants") equal to 8% of the aggregate number of Common Units and FT Units issued in the Offering. Each Broker Warrant will be exercisable into one Common Unit at an exercise price of $0.12 for a period of 18 months from the closing date.

The proceeds of the Offering will be used to fund the initial underground mining at the Edwards Mine project and that will focus mainly on the mining of Edwards #1 and Edwards #5 veins. Surface exploration will focus on the Company's Schreiber property including drilling on the western extension of the Afric gold mineralized zone, and for general working capital purposes.


Strike Minerals is a TSX-V listed company that is engaged in the exploration and development of precious metal properties in Canada. Its primary property is the former producing Edwards Gold Mine property in the Goudreau - Lochalsh Gold Camp near Wawa Ont. Historic production in the camp between 1930 and 2001 is estimated at 500,000 ounces. Between 1996 and 2001 underground development was completed through a decline to a depth of approximately 290 m and mining over the period resulted in 145,000 oz being produced from the Edwards property at an average grade of 0.39 opt. Subsequent drilling on the property has delineated an additional five zones that have significant gold mineralization. At present Strike has dewatered the underground workings below the 140m level and is now continuing underground drifting on both the 60m and 90m level and is drifting on both the Edwards #1 and #5 zones with the plan to be in production in 2012.

Strike also has a large land position in the Hemlo West area near Schreiber, Ont. The property has a number of historic producers that produced small tonnages of very high grade gold mineralization, averaging approximately 18-25 g/t gold, between 1935 and 1937 generally associated with shear zones in the region. These shear systems have seen very little modern exploration, and drill testing at or near a prominent syenite volcanic contact is considered highly prospective for the discovery of additional gold mineralization. Strike will conduct an initial program of surface geological and alteration mapping on the Property with a goal of increasing the understanding of the geologic and structural relationships on the Property in preparation for drill testing to assess the extent and value of the mineralization.

Forward-Looking Statements:

Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Strike, including, but not limited to, the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of exploration results and estimates and that the resource potential will be achieved on exploration projects, currency fluctuations, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing and exploration risk. There is no assurance that the company's exploration projects will add to Strike's resource base in the short-term, or at all. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither the 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.

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