Zone Resources Inc.

Zone Resources Inc.

September 06, 2011 09:00 ET

Zone Resources Inc. Commences Drilling in the Labrador Trough, Northern Quebec (Infographic)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 6, 2011) -

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Zone Resources Inc. (Zone) (TSX VENTURE:ZNR)(FRANKFURT:7ZR) is pleased to announce the beginning of an extensive drilling program on its iron properties in the Nunavik Region of Northern Quebec. Zone has permit approval for 44 drill locations which were selected to expand the zones of iron mineralization previously defined and to test the new iron zones recently identified from the airborne magnetic survey. This initial drill program, in conjunction with ground gravity surveys, is designed to prioritize the numerous iron targets on the property. The ultimate goal is to determine which of the targets have world class potential and to aggressively drill these targets to prove up resources. Previous drilling outlined large zones of iron mineralization.

Labrador Trough Summary

Zone has begun an aggressive exploration program to evaluate the iron mineralization on its land package, totaling 41,500 hectares, in the Labrador Trough in Nunavik in Northern Quebec. Drilling in the 1950's had outlined a number of zones of iron mineralization. The properties are northwest of Adriana Resources' Lac Otelnuk project (wherein Wuhan Iron and Steel Corp. has paid $120-million for a 60-per-cent interest), and New Millennium's Kemag and Labmag projects (which have an option agreement with Tata Steel for a $4.9-billion development which includes the construction of a 750-kilometre slurry pipeline).

The company has a continuing consultation process with the Inuit of Nunavik. Work activities will be serviced out of the community of Kuujjuaq, where the company will strive to maximize the use of local businesses and local employment.

Property Description

Moore-Ross Iron property

Consisting of approximately 4,000 hectares the Moore-Ross Iron property covers historic iron formation mineralization, known as the Moore, Ross Mountain, Ross Mountain West, Eagle's Nest and Jasper Lake showings and several other unnamed areas of iron formation mineralization.

The recently completed airborne magnetic survey identified additional iron zones at the Moore-Ross iron property. The Ross Mountain Zone of iron formation is exposed for a strike length of 3 kilometres and a thickness of at least 80 metres. It has a dip that varies from 10 degrees to 45 degrees. The Creek Zone exposes iron formation that is at least 160 metres thick and corresponds to an airborne magnetic anomaly that is over 2 kilometres long. The North Slope Zone is exposed in one location where it is about 100 metres thick; the corresponding magnetic anomaly is 2 kilometres long with possible offset extensions that might add another 2 kilometres. The North River Zone is at least 95 metres thick and has a probable strike length of 1 kilometre, with an additional magnetic anomaly that appears to be a slightly offset extension, and is at least 3 kilometres long. There are also several airborne magnetic anomalies that have no outcrop, but are believed to be caused by other zones of iron formation.

Grab samples of the new zones have been collected and sent for assay.

These "new" zones are in addition to the historic zones - the Moore, Partington and Star zones that were partially delineated by drilling in 1951 to 1952, and have been referred to in previous news releases.Historical data indicates that the property covers iron showings, initially discovered in 1948, with exploration carried out by Fenimore Iron Mines Ltd., up to the mid-1950's. Several samples, from different areas within the present property area, returned values ranging from 21.84% to 56.5% Fe.

The Ross Mountain showings were described by Lucien Eaton in 1949 as "...two hills of iron formation with overlying slate more than two miles long...these hills stand 100 to 200 ft., above the plains....There are many outcrops of iron formation for two miles west of Ross Mountain, some of them showing considerable oxidation and enrichment."

The Moore showings, located approximately 2 miles NW of the Ross Mountain West area, were described in a 1948 report, by Corking, who summarized the visit to the Moore showings " examine what appeared, on aerial reconnaissance, to be a sizable area of oxidization...". The report describes the Moore Showing area as "The showing consists of iron formation of the "hard-ore jasper" type which has been oxidized to an advanced degree, to form one or two places, beds of hard, blue hematite are exposed...". Several grab samples from the Moore showings are tabulated in this report and range from 29.67% Fe to 67.35% Fe. Corking goes on to report "...The oxidized iron formation is exposed for perhaps 2000 feet along the flanks of a sharply V-shaped ravine which almost parallels the structure, and cuts it in such a way that the north side shows mostly oxidized iron formation and the south side, mostly red sandstone with some oxidized iron formation. The thickness of the exposed oxidized material is obscured by talus debris, but it probably exceeds 50 feet; if the structure has been interpreted correctly, there must be several hundred feet lying above which does not outcrop..."

Girard Iron Project

Consisting of approximately 7,200 hectares in three non-continuous properties, the property contains a minimum of 6 zones of iron mineralization that were identified in historic work which was completed by the Quebec Labrador Development Company Ltd. between 1947 and 1960.

One large magnetic anomaly was identified from the recently completed airborne magnetic survey caused by an iron formation that appears to be 220 metres thick. The anomaly is 9 kilometres long, and is one of many as yet untested anomalies on the Girard property.

The 6 zones of historical iron mineralization on the property, from south to north, are; the MacDonald, Gagnon, Big Dome, Ball No.1, Ball No. 2 and Girard Lake. The zones of iron mineralization are located over a length of 19 km and a width of up to 5 km. Outcrop is limited and overburden is up to 25 feet (7.6 meters) deep. As a result, the property was not extensively worked during the period that the major iron mines of the Labrador Trough were developed near Schefferville and Labrador City.

The MacDonald Zone had been exposed by hand trenching, pitting and small x-ray sized core drilling with holes to a maximum of 100 feet. The MacDonald Zone was discovered because of a prominent rust covered area, one and one half miles long and widths exceeding 600 feet. Trenching, pitting and drilling on the North Zone, where the overburden was the thinnest, extended the iron zone by at least 2,600 feet. Assays from trenches and pits, outlined in a report dated 1950 by K.C. Burwash of the Quebec Labrador Development Company Ltd., ranged from one sample assaying a low of 28.37% iron to a high sample assaying 65.24% iron, with 6 (out of 41) samples assaying from 33.25% iron to 39.50% iron, and 20 (out of 41) samples assaying from 40.37% iron to 49.23% iron, and 12 (out of 41) samples assaying from 50.16% iron to 59.75% iron, and 2 (out of 41) samples assaying from 62.41% to 65.24% iron, with the full range of assays from 4 separate trenches and 13 separate pits. There is no reference to whether the samples were chip or grab.

The Ball No. 1 Zone is approximately 8 km north of the MacDonald Zone. The Ball No. 1 Zone is in an area of overburden at least 25 feet (7.6 meters) thick and was originally discovered due to the soil discoloration. The following excerpts are from a 1949 report by W.P. Corking for the Quebec Labrador Development Company Ltd.; "...the Ball No. 1 showing is iron formation...analysis of nine samples showed iron content ranging from 28% to 43%...the work done to date consists of 15 test pits covering a length of 800 feet and a width in one place of 600 feet. The actual dimensions of the oxidized zone are not known because of glacial covering: on the evidence of the soil colouration however, it is estimated that not more than 10% of the zone has been test pitted."

Between the MacDonald and the Ball No. 1 Zones, the Big Dome and the Gagnon Zones were identified. In a 1952 report by Burwash, it is reported that Dr. Sandefur had; " located a very prominent and deep fold in the iron formation....this trough has been outlined by Dr. Sandefur for over a length of 4 miles of which the Ball No. 1 forms the eastern extremity."

The Ball No. 2 Zone lies 6 km to the north of the Ball No. 1 Zone. The Ball No. 2 Zone had 8 test pits and trenches over an area of ½ mile by ½ mile and returned from 35.67% iron to 45.52% iron as reported in 1950 by Burwash.

The Girard Lake Zone is 5 km northwest of the Ball No. 2 Zone. The Girard Lake Zone consists of iron formation and magnetite and was reported by Bergeron in 1952 as; "...A preliminary sampling showed an iron content varying between 60% and 68%." The zone was outlined by pits and trenches along a length in excess of 400 feet and with widths varying from 12 to 40 feet.

Knob Hill

Consisting of approximately 2,000 hectares, this property is approximately 12 kilometers north of the Moore-Ross Iron property.

The Knob Hill iron property covers an area of extensive iron formation outcropping and is described in several historic reports as a discovery of iron formation on a dolomite footwall, with overlying sediments, called the Red Knob Hill property. The discovery was made in the late 1940's. A 1950 report, describes a large favorable structure identified in the Red Knob Hill area, as "a sharp the iron compressed in a tight synclinal fold 1500 ft across..." and within the same report, maps indicate that intermittent outcrops of iron formation were mapped from Red Knob Hill to the Melezes River for a distance of over 5 km. A 1948 report, describes the outcropping iron formation width as "...their width varies from a few hundred to around one thousand feet...there are scattered piles of broken oxidized material along this iron formation which should be investigated by digging pits..."

Bob Lake

Containing approximately 7,500 hectares, the Bob Lake property is situated between the Moore-Ross Mountain Property to the north and the Girard Lake Property to the south.

Technical information in this news release has been reviewed by Mike Magrum, PEng, a qualified person as defined in National Instrument 43-101.

About Zone Resources Inc.

Zone Resources Inc. is in the business of evaluating and acquiring mining and oil and natural gas properties for exploration and development. The Company's shares trade on the TSX Venture Exchange under the symbol ZNR.

Cautionary note:

This report contains forward looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

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