Urastar Energy Inc.

Urastar Energy Inc.

July 15, 2011 07:56 ET

UraStar Signs LOI to Aquire Blackpoint Gold-Silver Project in Nevada's Battle Mountain-Eureka District

VANCOUVER, CANADA--(Marketwire - July 15, 2011) - UraStar Energy Inc. ("UraStar" or "the Company") (TSX VENTURE:URS)(OTCQX:OTCM)(FRANKFURT:3U3) announces that it has signed a Letter of Intent ("LOI") to purchase a 100% interest in the BlackPoint Gold-Silver Project located in the Battle Mountain-Eureka Gold Trend of Nevada from Mosquito Consolidated Gold Mines Limited (TSX VENTURE:MSQ)(OTC:MQCMF) ("Mosquito"). The Project consists of 896 acres and is located 7 kilometers north of the town of Eureka, Nevada as set out on a location map which can be found at www.urastarenergy.com

The area surrounding Blackpoint has numerous prolific Gold deposits with the Ruby Hill Gold Mine located to the southwest, and the historic Alligator Ridge Gold Mine to the east.

Pursuant to the LOI, UraStar can earn a 100% interest in Blackpoint by making the following payments consisting of cash and shares over a 5 year period (subject to TSXV approval):

Time Cash (USD) 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

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) which 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.

Charles (Bill) Reed, a director of Urastar and co-founder of Paramount Gold and Silver Corp (NYSE:PXG) stated "Urastar is very pleased to have aquired the Blackpoint Project in the most profilic Gold-Silver district in the world. An aggressive drill program will be commenced shortly to test targets and build a compliant resource."

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 in 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 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.

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

About UraStar Energy Inc.

UraStar Energy Inc. is a mining exploration and development company focusing on gold and silver exploration in Nevada, USA and 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.urastarenergy.com

The TSX Venture Exchange and its regulation service provider has not reviewed or approved the contents of this release.

Contact Information

  • UraStar Energy Inc.
    Thomas J. Kennedy, CEO
    604-685-6905 (FAX)

    Launch IR
    Matthew Harrington