Honey Badger Exploration Inc.

Honey Badger Exploration Inc.

May 05, 2008 13:12 ET

Telkwa Gold Options Bronco Creek Exploration Property, Secures Major Land Position in the Yerington Copper Belt, Nevada

TORONTO, ONTARIO--(Marketwire - May 5, 2008) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICE

Telkwa Gold (TSX VENTURE:TKW)("Telkwa" or "the Company") is pleased to announce that it has entered into a Letter of Agreement(*) (LOA) with Bronco Creek Exploration (BCE), a privately-owned Arizona-based exploration and discovery corporation, pursuant to which Telkwa has agreed to acquire a 75% undivided right, title and interest in a new land position in the Yerington Copper Belt of Nevada. The new Property, "Roulette", consists of 168 Claims totaling 3,460 acres of Bureau Land Management (BLM) land, and is immediately south of Telkwa's Blackjack Property (formerly known as the Iron Cap Property), consisting of 358 claims, totaling approximately 7,066 acres. These two Properties comprise some 10,500 acres (16.4 square miles) of BLM land, and are collectively known as The "Yerington West" Project.

The Yerington Copper Mine located five miles to the east of Telkwa's Blackjack Property produced approximately 2 billion pounds of copper at a grade of 0.55% between 1953 and 1978. The district is now experiencing a major resurgence in mineral exploration, and the Company considers the timing to be ripe for exploration utilizing modern technology and employing contemporary geological concepts.

Kirk McKinnon, President and CEO of MacDonald Mines commented, "We are very pleased to have concluded a Letter of Agreement outlining the principle terms of agreement between BCE and Telkwa. The agreement effectively unites the BCE's Roulette Property and Telkwa's Blackjack Property into a single coordinated exploration project. The BCE team is a seasoned and very knowledgeable group, and are eager to bring their significant geologic expertise in the Yerington district to the partnership. We are looking forward to drill testing a number of geologic targets located within the combined BCE and Telkwa properties."

The Yerington Story - The "Big Four" Porphyries

The Yerington district exhibits multiple porphyry copper deposits associated with a complex swarm of Jurassic-aged igneous intrusions.

The "Big Four" deposits are;

1. Yerington Mine, 162 Mt @ 0.55% Cu (Closed 1978 - historic production)

2. Ann Mason deposit, 810 Mt @ 0.4% Cu (JORC - inferred resource - 2006)

3. MacArthur Mine, 29 Mt @ 0.28 incl. 13 Mt @ 0.44% Cu (historic oxide resource)

4. Bear-Lagomarsino deposits, (greater than)500 Mt @ 0.4% Cu (historic resource)

(*)Metal production figures and resources cited above are historical in nature and taken from the public record and so the Company has not done the work to verify the accuracy of individual citations and so assumes that they do not comply with current 43-101 standards for reporting.

Geological Setting

Perhaps the most striking aspect of the district, however, is that during the past 30 million years, the district has been extensively faulted and bedrock exposures have been rotated nearly 90 degrees. Thus, current day exposures effectively show cross-sectional views of the earth's crust, which has profound implications for exploration. Recognition of this history of extension and rotation has led to the identification of multiple new geologic targets in the district, and both BCE and Telkwa have taken up key land positions which include several of these target areas.

The remarkable geology and mineral deposits of the Yerington district have been the focus of intense geologic study. Many decades of work have been devoted to detailed geologic mapping and interpretation, leading to sophisticated and well-constrained geologic models of the district. Of critical importance is the structural reconstruction of the district (restoration of un-faulted and un-rotated views of the Yerington district) published by Dilles and Proffett in 1995 (Arizona Geological Society Digest 20, p. 306-315). Their reconstruction documents the presence of four separate swarms of porphyry igneous dikes and "cupola" environments with which the known major copper deposits are associated. These centers of mineralization have been dismembered and rotated by the subsequent faulting, and shifted to their current positions in the district.

The "Fifth" Big Porphyry?

A fifth dike swarm and locus of mineralization is shown by the Dilles and Proffett (1995) reconstruction in the vicinity of the Ludwig and Casting Copper Mines in the southern portion of the Yerington district. Although a porphyry-copper (and associated magmatic cupola) environment has yet to be identified in the Ludwig-Casting Copper area, extensive skarn mineralization and styles of alteration seen in the dike swarm indicate proximity to an undiscovered porphyry copper center. Detailed mapping, coupled with a clear understanding of well-constrained displacements of faults in the Yerington district, demonstrates that this porphyry source would now lie out in Smith Valley to the west-northwest of the Ludwig-Casting Copper area. Upon recognizing this, BCE quickly acted to acquire an extensive land position across the target area. Discovery of porphyry copper mineralization in this area would complete the pattern of discovery suggested by the Dilles and Proffett (1995) reconstruction, and would add a fifth porphyry deposit to the five major swarms of dikes and loci of mineralization currently recognized in the Yerington district.

Telkwa has acquired key data that further supports the interpretation of a fifth porphyry system on the Blackjack and Roulette Properties.

In addition to the target in Smith Valley, the Roulette Property also contains several high-grade skarn targets, including off-faulted portions of the Douglass Hill, Casting Copper and Ludwig deposits. In turn, the Telkwa land position contains significant potential for discovery of at least one new porphyry system in the district, in addition to off-faulted portions of other zones of known mineralization.

Current Active Exploration in Yerington Region

Quaterra Resources Inc.

- actively expanding the MacArthur copper oxide deposit, contiguous with the northeast boundary of Telkwa's Blackjack Property.

- Identified a new Copper Oxide prospect approaching eastern boundary of

Blackjack Property

PacMag Metals Ltd.

- Ann Mason deposit is located 2 miles to the east of Telkwa's Blackjack Property's eastern boundary

- Reported ore reserves of 810 million tonnes @ 0.40% copper and 0.004% molybdenum (0.30% copper cut off) with higher grade zones, including 221 million tonnes @ 0.51% copper and 0.004% molybdenum (at a 0.43% copper cut off).

- Announced discovery of a new porphyry copper-molybdenum mineralization on their Blue Hills project, intersecting 240 feet of 0.40% copper and 168 ppm molybdenum, which included 60 feet of 0.60% copper and 60 feet of 0.42% copper with 439 ppm molybdenum. This significant hole is located approximately 2,000 feet of Telkwa's claim boundary.

The Agreement

Telkwa can acquire a 75% undivided right, title and interest in and to the Property. Telkwa will acquire its interest in the Property free and clear of all encumbrances, by making payments to BCE in the following amounts and by the dates indicated, subject to Regulatory approvals and appropriate due diligence including a site visit:

a) making a cash payment of $150,000 to Bronco Creek Exploration as

follows:

- $10,000 within 5 days of signing the Letter of Agreement (LOA);

- $40,000 within 5 days of the Permit Approval Date (PAD); and

- $50,000 on the six-month and first year anniversary of the PAD.

b) Issue securities of 3,000,000 TKW common shares and 1,500,000 warrants to BCE as follows:

- 2,000,000 common shares and 1,000,000 warrants within 30 days of the PAD. Warrants are exercisable at $0.20 CDN per share for a period of 24 months from date of issuance;

- 500,000 common shares and 250,000 warrants on the first year anniversary of the PAD. Warrants are exercisable at $0.25 CDN per share for a period of 24 months from date of issuance;

- 500,000 common shares and 250,000 warrants on the second year anniversary of the PAD. Warrants are exercisable at $0.30 CDN per share for a period of 24 months from date of issuance; and

- For the time during which the project is active, BCE has the right to participate in all future financing events of Telkwa on a pro-rata basis and may elect to assign this right to a third party of their election.

c) Incur an aggregate work commitment of $1,500,000 on the property as follows;

- Incur an aggregate work commitment of $350,000 on or before the first anniversary of PAD.

- Incur an aggregate work commitment of $750,000 on or before the second anniversary of PAD.

- Incur an aggregate work commitment of $1,500,000 on or before the third anniversary of PAD.

d) BCE shall have a fully carried interest as it relates to exploration expenditures on the joint venture Properties until such time as a Bankable Feasibility Study (BFS) is delivered from Telkwa. Upon delivery of a BFS being presented to BCE, then each party will be responsible for contributing to future exploration expenditures based on their respective participating interests in the joint venture arrangement. The starting participating interests will be as follows:

Telkwa = 75% and BCE = 25%.

Nevada

Telkwa's current exploration focus is Nevada, the third largest gold producing area in the world, producing some 11% of the annual world gold production worth in excess of 2 billion dollars annually and containing some of the largest and richest gold mines in the world. Nevada has a long history of mining a variety of metals including copper, gold, silver, zinc, iron, molybdenum. It is a very mining-friendly jurisdiction in a politically stable environment. Access in Nevada is well developed and fieldwork is possible year-round.

Nevada is important to the mining industry for several reasons:

- The state ranks among the most favorable jurisdictions in the world to find, develop and operate mines.

- There is a long history of mining, providing a strong base of mining skills and expertise.

- The infrastructure for mine development in Nevada is better than any place on the planet.

- Existing milling facilities have unused capacity, meaning that mines can be brought to production quickly and inexpensively.

- Nevada has one of the richest endowments of gold of any region in the world.

- Vast areas of the state remain under-explored and new approaches are leading to big discoveries.

Administration

The Board of Directors of the Company granted 465,000 stock options on May 2, 2008 to directors, officers and consultants of the Company under the terms of the incentive stock option plan of the Company filed with the TSX Venture Exchange and approved by shareholders at the last annual general meeting of shareholders of the Company held on June 28, 2007. The options are exercisable at a price of $0.10 per share for a period of four years and are subject to a four-month hold period from the date of the issuance thereof.

Bill Nielsen, P. Geo, Director is the designated qualified person for the technical information contained in this release.

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, receipt of property titles, 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 statements.

This news release is not for dissemination in the United States or to any United States new service, and does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction. The common shares of Telkwa Gold Corp will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption there from.

Contact Information

  • Telkwa Gold Corporation - Toronto Office
    Brent Nykoliation
    Director of Business Development
    (416) 364-4986

    Telkwa Gold Corporation - Toronto Office
    J. A. Kirk McKinnon
    President and CEO
    (416) 364-4986

    Telkwa Gold Corporation - Toronto Office
    Richard Schler
    Vice President and CFO
    (416) 364-4986
    (416) 364-2753 (FAX)
    info@telkwagold.com
    www.telkwagold.com

    Telkwa Gold Corporation - Calgary Office,
    Michael Marchand, Ph.D., P. Geol.
    Vice-President of Exploration
    (403) 282-5105