VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/26/10 -- Secova Metals Corp. (TSX VENTURE: SEK) is pleased to announce that it has signed a Memorandum of Understanding ("MOU") with a private group to acquire up to a 90% interest in the Sergeevske Gold Deposit. The Project is located in east central Ukraine and is in close proximity to both transportation and power. Previous exploration on the property includes more than 200 diamond drill holes, geological & metallurgical studies and non NI 43-101 compliant resource calculations. Secova intends to aggressively drill the known mineralized zones with the goal of further delineating the deposit and completing a NI 43-101 compliant resource calculation. The Sergeevske deposit mineralization is open in all directions.
Terms of the MOU allow Secova to earn up to 90% of the deposit by spending five million US dollars in exploration over five years (for a 65% interest) and a ten million US dollar cash payment for a further 25% interest. Secova will direct all exploration activity on the property. A $100,000 cash installment is due at six month intervals to maximum of $1.0 million and is applicable towards the 25% payment. Secova has first right of refusal on the sale of the remaining 10% interest. The first year exploration work commitment is $1.5 million. There are no underlying production royalties or net profit interests. The MOU allows for a 60 day due diligence period; and is conditional upon receipt of TSX Venture Exchange approval to the transaction.
Sergeevske is accessible is by paved highway and dirt roads. The project is 40km southwest of Dniepropetrovsk (population greater than 1 million) with a railway line passing 8km to the northwest and a power line along the southern boundary of the exploration license area. Topography is flat and the property can be drilled year round.
The Sergeevske Gold Deposit was intensely explored by Ukrainian government agencies from 1992 to 1996. Exploration ceased in 1996 due to funding shortfalls, following the fall of the Soviet Union and the creation of an independent Ukraine. Deposit resource calculations completed in 2000 by Ukraine government experts delineated gold resources based on an underground mining scenario to a depth of about 200 metres, at various cut-off grades. Their results estimate a current deposit resource of 1.63 Mt at 6.8 g/t gold applying a cut-off grade of 1.8 g/t (approximately 356,000 ounces). At a cut-off grade of 1.0 g/t gold the resource is estimated at 3.85 Mt at 4.5 gpt (approximately 557,000 ounces). These resource estimates are classified as a 'GEO-3 Class 332 Indicated Resource' meaning that the resource is interpreted to be a preliminary geological-economic assessment stage for which the main geological features of size, shape, structure and grade are reasonably well determined. This Ukraine resource category is similar to various international standard inferred resource categories (NI 43-101 & JORC).
These estimates of gold resources are historical in nature, predate and are noncompliant with NI 43-101 standards. Secova is not treating the historical estimates as current mineral resources or reserves. Secova has not undertaken any independent investigation of the resource estimates nor has it independently analyzed the results of the previous exploration work in order to verify the resources and therefore the historical estimates should not be relied upon. However, Secova believes that these historical estimates provide a conceptual indication of the potential of the gold occurrences and are relevant to future exploration.
The Sergeevske deposit is the largest known Archean lode gold occurrence within the Surska Archean Greenstone belt of the Ukrainian Precambrian Shield and is analogous to other greenstone gold mining regions such as those found in central Canada. At Sergeevske, mesoarchean age volcanogenic-sedimentary and intrusive rocks host gold mineralization in a sheeted vein system bound within a shear zone measuring up to 1 km wide and at least 3.8 km long. The deposit consists of more than 30 mineralized zones, which contain linear quartz-carbonate-sulphide stringer zones and veins. Reports indicate that individual mineralized structures have average gold grades ranging 2.0 to 6.1 g/t. Government reports indicate that Sergeevske mineralization is estimated to contain 85-95% free gold, occurring mostly in quartz.
Ukraine is a mining-friendly jurisdiction and is a country with a long history in mining. Ukrainian law does not differentiate between mining rights for foreign and domestic parties nor does the mining law set any restrictions on foreign ownership of the companies that retain subsurface use rights. The principal law regulating subsurface land use in Ukraine was developed in 1994 with a subsequent principal law put into place in 1999. Mining in Ukraine is estimated to create over 23% of the annual Gross National Product.
A finder's fee maybe payable in connection with the transaction.
Michael Moore, PGeo, is the qualified person who has reviewed the technical information contained in this news release on behalf of the company.
Further information is available on the company's website www.secovametals.ca.
ON BEHALF OF THE BOARD
Michael Moore, President and CEO
Forward-Looking Statements: This Secova Metals News Release may contain certain "forward-looking" statements and information relating to Secova which are based on the beliefs of Secova management, as well as assumptions made by and information currently available to Secova management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events. Should any one or more of these risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein. The potential for Secova to replicate historical resource estimates or grades, or for new data to expand tonnage or grade, is conceptual and is based on historical reports which have not been verified by a qualified person. There is a risk that planned exploration and test work will not result in the delineation of NI 43-101 compliant resource estimates or verify historically reported grades.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Secova Metals Corp.
President and CEO
604-687-7178 or Toll Free: 800-398-5645