UC Resources Ltd.

UC Resources Ltd.

June 08, 2006 14:37 ET

UC Resources Ltd.: Preliminary Results of Phase 2 Drill Program Confirm Potential for Bulk Tonnage Deposits at Copalquin Project, Durango State, Mexico

TORREON, COAHUILA, MEXICO and VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 8, 2006) - UC Resources Ltd. (TSX VENTURE:UC) (the "Company"). The Company is pleased to announce early results from the Phase 2 exploration program at the Company's 64,000 ha (640 sq. km) Copalquin Project, Durango State, Mexico.

The Company's concessions cover all of the historic mines and prospects that comprise the former Copalquin Mining District and the exploration program currently being carried out by UC Resources represents the first systematic modern exploration work ever carried out in this area. The Copalquin district is in the northern part of Mexico's prolific Sierra Madre Gold Belt which hosts several, multi-million ounce equivalent gold deposits such as Gammon Lake Resources' Ocampo Mine, Alamos Gold's Mulatos Project and Glamis Gold's El Sauzal Mine and management believes the project represents an exceptional early stage, prospect.

As previously announced, a limited drilling program carried out in 1998 by previous operator, Bell Coast Capital Corp., intersected significant gold and silver mineralization at two of the historic mines known as Refugio and Cometa. However market interest at the time was limited and the property was returned to its Mexican owners. In 2004, Planet Exploration Ltd. acquired the option on the core claims and entered into a joint venture with UC Resources. During late 2004 and early 2005 UC Resources completed an initial drilling program designed to verify the results reported by Bell Coast Capital Corp. and based on the results of Phase 1 UC Resources bought out the interest of the joint venture partner and has expanded the land package to more than 64,000 hectares.

As reported August 11, 2005, a total of 31 drill holes have tested mineralization in the area of the El Cometa Prospect and 5 drill holes have tested mineralization in the area of the El Refugio Prospect. Compilation studies indicate that many of the mineralized intervals reported by both UC and BCC from the El Cometa area actually represent only the highest grade sections within much wider zones of lower grade mineralization. For example, drill hole UC-14 reportedly intersected 11.6 meters of mineralization averaging 3.01 g/t gold and 300.6 g/t silver. An inspection of assay information shows that the overall mineralized zone in drill hole UC-14 actually averaged 0.76 g/t gold and 73.1 g/t silver over 51.2 meters. It is important to note that with the same conversion factor used by Gammon Lake (65:1) this 51.2 meter intersection averages 1.9 g/t gold equivalent. Other examples of drill holes from the Cometa area which intersected wide zones of mineralization include DDH UC-01 which intersected a 31.4 meter wide interval that averaged 0.41 g/t gold and 40.8 g/t silver. BCC drill hole EC-10 reportedly intersected 6.9 meters of mineralization averaging 17.03 g/t gold and 352 g/t silver. Core logs and drill hole assay information prepared by BCC show that the reported intersection actually forms part of a 23.5 meter wide interval that averaged 8.42 g/t gold and 192.5 g/t silver.

At Refugio, located 500 meters west of Cometa, Bell Coast reported completion of a single drill hole ER-31, which intersected a 78 meter wide zone that averaged 0.22 g/t gold and 5.8 g/t silver. Within the mineralized zones gold values ranged from 0.05 g/t to 0.90 g/t and silver values ranged from 1.0 to 10.0 g/t. Four drill holes, completed in 2005 by UC from a station approximately 50 meters southeast of BCC hole ER-31, confirmed the strike extension of the mineralized zone to the east of El Refugio. The last hole of the program, DDH UC-24 intersected a 17.9 meter wide zone that averaged 2.94 g/t gold equivalent.

According to technical reports prepared by BCC and Planet Explorations the gold and silver mineralization at Cometa and Refugio is localized within silicified breccias and stockwork zones; however, very little detailed geological work was completed and the relationships between the mineralized zones are uncertain. The primary objective of the current program was to determine if these breccias and stockwork zones are isolated occurrences or if they form part of a regionally extensive mineralized system.

Geochemical surveys carried out in December, 2005 identified potential strike extensions of Cometa to the southwest and north of the areas that were previously drilled (see NR dated February 24, 2006). Three 100 meter deep holes have been completed from southwest of Cometa and two 150 meter deep holes have been drilled from a station north of the Cometa. The first drill station was approximately 100 meters southwest of the nearest previous hole. The first two holes DDH 06-01 and DDH 06-02 were drilled to the north at inclinations of 85 and 45 degrees and the third hole was drilled to the northeast at an inclination of 45 degrees. All holes intersected silicified breccia and stockwork zones similar to the mineralization encountered in ER-31 over core lengths ranging from 50 to 80 meters. The gold values in DDH 06-01 and 06-02 range from 0.05 g/t to .34 g/t and silver values range from 1.0 g/t to 5.9 g/t. Although grades for the first two holes were disappointing the width of the mineralized zone encountered clearly supports the exploration model that these zones form part of a more extensive mineralized system than was previously recognized.

In the area north of the Cometa Prospect two drill holes, 06-04 and 06-05 have been completed. These holes were drilled to the east and northeast at an inclination of 50 degrees and also encountered 90 to 100 meter wide intervals of silicified breccia and stockwork type mineralization. A drill hole completed in this area by Bell Coast Capital in 1998 (EC-25) returned a 49.0 meter wide interval that averaged 0.43 g/t gold and 14.4 g/t silver or a gold equivalent gold grade of 0.65 g/t. All of the mineralized intervals from 06-03, 06-04 and 06-05 have been submitted for assay and results will be released as soon as they are available.

In summary results of the Phase 2 program clearly confirm that the mineralized zones at Cometa and Refugio represent parts of the same mineralized system. Satellite imaging, preliminary geological work and geochemical surveys suggest potential extensions of the mineralized zones for up to four kilometres to the east of Refugio and up to two kilometres to the west of Cometa. Geological maps published by the CRM (Mexican Department of Mines) show gold and silver occurrences extending even further along the projected extent of the known zones and suggest the target area for Phase 3 is approximately ten kilometres in length. A schematic geological map available on the Company's website shows the potential extensions of the main target area.

The drill is now testing a third prospect located approximately 300 meters north of Cometa known as the La Soledad area. The La Soledad is the largest of the historic mines at Copalquin and according to Wilkins, 1998 total production from the mine is approximately 200,000 ounces of gold and 8,000,000 ounces of silver from an estimated 136,000 tons of material. As part of the 1998 program Bell Coast attempted to test the down dip extent of the mineralized zone developed by the mine workings however drill sites were located at too high an elevation and the holes that were drilled intersected the underground workings. The current drill pad is located roughly 60 meters lower in elevation than the previous drill pads and represents the first drill program to test the extent of this mineralized zone. It is important to note that the La Soledad zone is hosted within rocks which appear to have been down dropped relative to the breccia and stockwork zones that host gold and silver mineralization at Cometa and that there is potential to intersect these zones at depth below the mine workings.

The technical information contained in this release was prepared by Carl von Einsiedel, P.Geo. who is the Qualified Person.

Like many of the other success stories in the Sierra Madre, Copalquin has a history of gold and silver production going back hundreds of years and the work presently being carried out by UC represents the first modern, systematic exploration in this district. UC's focus is solely in Mexico and the Company is actively searching for additional quality assets so that UC can become a producing gold and silver exploration and development company in 2006.

Subject to TSXV acceptance, the Company has entered into a Financial Advisory Services Agreement with the CPM Group of New York. CPM Group is a leading commodities market research, consulting, asset management, and investment-banking firm and they will offer UC advisory and capital raising services. Based on CPM's twenty years of experience and exposure to its international contacts and professionals, they are able to add significant value. CPM is to be granted options to purchase 100,000 shares at $0.32 per share, to vest as to 25,000 shares each three months. The Agreement is for a term of one year, at a monthly compensation of US$7,000. (see: www.cpmgroup.com).

On behalf of the Board of Directors,

Richard J. Hamelin, President/Director

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings what are available at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • UC Resources Ltd.
    William Elston
    VP Corporate Development, Officer
    Toll Free: 1-800-366-8566 (Canada & USA)