Urastar Gold Corp. (formerly Urastar Energy Inc.)

Urastar Gold Corp. (formerly Urastar Energy Inc.)

August 24, 2011 09:30 ET

Urastar and Mosquito Complete Option Agreement for Blackpoint Au-Ag Property in Nevada

VANCOUVER, CANADA--(Marketwire - Aug. 24, 2011) - Mosquito Consolidated Gold Mines Limited (TSX VENTURE:MSQ)(OTC:MQCMF) ("Mosquito" or the "Company") and Urastar Gold Corp. ("Urastar") (TSX VENTURE:URS)(OTCQX:URNRF)(FRANKFURT:A1JFEE) wish to announce that the previously announced letter of intent (see news release dated July 15, 2011), whereby Urastar agreed to purchase a 100% interest in the BlackPoint gold-silver property located in the major Battle Mountain-Eureka Gold Trend of Nevada, has been finalized.

The definitive agreement allows Urastar to earn a 100% interest in Blackpoint by making the following payments consisting of cash and shares over a 5 year period:

Time Cash Payments Common Shares
On Signing LOI $25,000.00 Nil
At Closing $225,000 250,000 shares
Year 1 from Closing $350,000 250,000 shares
Year 2 from Closing $1,000,000 250,000 shares
Year 3 from Closing $1,500,000 250,000 shares
Year 4 from Closing $2,500,000 250,000 shares
Year 5 from Closing $4,400,000 250,000 shares
TOTALS $10,000,000 CASH PAYMENTS 1,500,000 SHARES

Mosquito has received the first payment of $225,000.

The property has a long history dating back to 1864. Available records indicate production between 1933 and 1941, from the near surface zones on the property, grading 400 gms Ag/ton to 3,700 gms Ag/T (12 to 108 ounces per ton) was sent to a mill located at McGill, Nevada. More recent work in 1971 concentrated on surface sampling and several short drill holes looking at the continuity of the higher grade silver portions of the deposits. Table 1 lists some of the historic intersections from the 1971 drill program. These intersections are historic and the qualified person has been unable to fully verify the results and thus these results should not be relied upon.

Table 1: Historic Intersections from shallow Drilling at Blackpoint.

hole hole hole zone zone zone Ag zone zone Ag grade
name length length name top thickness grade top thickness gms/T
feet meters feet feet oz/t meters meters gms/T
Sl-2 112 34.14 Condor 28 84 1.83 8.53 25.60 62.74
SL-3 112 34.14 Condor 32 60 2.26 9.75 18.29 77.49
SL-7 84 25.60 Condor 28 27 6.64 8.53 8.23 227.66
SL-6 200 60.96 Condor 36 24 2.06 10.97 7.32 70.63
SL-17 88 26.82 Condor 0 52 2.04 0.00 15.85 69.94
SL-18 300 91.44 Condor 52 24 2.41 15.85 7.32 82.63
SL-22 120 36.58 Condor 44 16 1.22 13.41 4.88 41.83
ER-7 136 41.45 Eagle Ridge 12 74 2.13 3.66 22.56 73.03
ER-4 200 60.96 Eagle Ridge 44 84 1.34 13.41 25.60 45.94
ER-16 108 32.92 Eagle Ridge 40 24 1.14 12.19 7.32 39.09
ER-17 180 54.86 Eagle Ridge 64 18 1.40 19.51 5.49 48.00
TRENCH 20 6.10 Eagle Ridge 0 20 21.00 0.00 6.10 720.01
ER-9 136 41.45 Dot 80 20 11.53 24.38 6.10 395.32
ER-3 160 48.77 Dot 96 32 1.46 29.26 9.75 50.06
ER-11 100 30.48 Dot 24 76 4.04 7.32 23.16 138.52
TRENCH 50 15.24 Dot 0 50 7.10 0.00 15.24 243.43

No other assays are reported, although gold, copper, lead and zinc mineralization has been described.

Examination of the surface geology shows Blackpoint hosts a silica-sericite (or "low-sulfidation") epithermal silver-gold system with extensive silica-sericite alteration, high grade silver bearing veins, stockwork and breccia and scattered gold values. This style of mineralization is typical of that found at the active and historic mines in the area. The property is divided into two distinct halves by an east west orientated structure with the Condor zone in the north and the Eagle ridge and dot zones in the south. All the previous work was centered around the silver mineralization with no work done on looking for the gold bearing part of the system that may be located more towards the centre or at depth of the peripheral silver zones.

Geological work completed in 2007 by Mosquito Consolidated Gold Mines Ltd. determined that the property had not been properly explored, the presence of asymmetrical alteration zones, the large east-west orientated structure offsetting the mineralized zone and the presence of fall out breccias to the southwest, all indicate an unrecognized southwest plunge to the system. Additional detailed mapping confirmed a significant increase in the intensity and thickness of the silicification toward the central area. This resulted in the previous drill programs failing to explore the main exploration targets beneath the exposed silica breccia zone.

Urastar will begin an aggressive exploration program of detailed surface mapping, sampling and drilling to define and test these highly prospective, previously unexplored exploration targets, concentrating on finding the gold bearing portion of the system at depth, while continue to develop the near surface silver mineralization. Drilling is expected to begin in the next two months.

Mr. Shaun M. Dykes, M.Sc. (Eng), P.Geo., is a designated Qualified Person pursuant to National Instrument 43-101 and prepared the technical information contained in this news release.

On Behalf of the Board


Brian McClay, President

On Behalf of the Board


Tom Kennedy, President and CEO

About Mosquito Consolidated Gold Mines

Mosquito Consolidated Gold Mines Limited is a mining exploration and development company with a diverse portfolio of high potential precious and base metals projects, located in low political risk environments in North America. The Company's primary focus is developing its Idaho-based CuMo project, one of the world's largest molybdenum deposits. For more information about the company, please visit www.mosquitogold.com and www.cumoproject.com

About Urastar Gold Corp.

Urastar Gold Corp. is a junior mining exploration and development company focusing on gold exploration in Mexico's Sierra Madre gold belt targeting areas containing former producing properties. The Sierra Madre Gold Belt is one of the richest gold belts in the world hosting several world class mines and many major recent discoveries. For more information, please visit www.urastargold.com

This news release includes certain statements that express management's expectation or estimates of future performance and may be deemed "forward-looking statements". These forward-looking statements include plans, estimates, forecasts and statements as to management's expectations regarding the CuMo Project. These forward-looking statements involve assumptions, risks and uncertainties and actual results may vary materially. For these reasons shareholders should not place undue reliance on such forward-looking information.

United States residents are cautioned that some of the information that may be published by Mosquito may not be consistent with United States Securities and Exchange Commission disclosure rules and may be materially different from what the Company is permitted to disclose in the United States and therefore United States residents should not rely on such information.


Contact Information

  • Urastar Gold Corp.
    Tom Kennedy
    President and CEO
    604-685-6905 (FAX)