June 19 2008 - King's Bay Gold Corporation (TSX.V: KBG) is pleased to announce, subject to regulatory approval, that it has entered into a joint venture earn-in agreement with Mainstream Minerals Corporation (TSX.V: MJO) to acquire a 50% interest in the Phyllis Lake Project.
Summary of the Phyllis Lake Project
The Phyllis Lake high-grade Molybdenum / Copper Project is comprised of 12 claims totalling 64 claim units (2,560 acres) and is located near the Town of Ignace, Ontario. The property is accessible via the TransCanada Highway and a logging road.
A stripping program carried out by heavy equipment has recently uncovered large zones with impressive widths and strike lengths. Surface sampling has also yielded high-grade results that both companies believe could possibly be the beginning of a large mineral discovery on a new project that has never been explored before.
Surface sampling of this project has yielded results as high as:
0.690 % Molybdenum (Mo), 2.192 % Copper (Cu), 0.415 % Cobalt (Co), 0.393 % Nickel (Ni), 0.100 % Zinc (Zn), 9.60 g/t Silver (Ag), 2.81 g/t Gold (Au), 2.50 g/t Palladium (Pd) and 1.20 g/t Platinum (Pt).
A 3 metre channel sample from a zone with a strike length of approximately 500 metres returned high-grade values of 0.677 % Molybdenum.
Some of these metals are very valuable, for example, and in US dollars:
Moly is currently trading at over $33.00 per pound (lb)
Cobalt at over $48.00/lb
Nickel at over $9.90/lb
Copper at approximately $3.70/lb
Zinc at approximately 0.82/lb
Gold at approximately $900.00 per ounce
Silver at over $17.00 per ounce
Palladium at over $470.00 per ounce
Platinum at over $2,000.00 per ounce
Base metals values are reported in percentages. For example, one percent (1.000 %) is equivalent to approximately 22 pounds (lbs) per metric tonne.
East Zone Number 1
Of special interest is a newly uncovered VMS zone with a width of approximately 60 metres with a visible strike length of approximately 500 metres. The main mineralization is Copper, Zinc, and Molybdenum. A 3 metre channel sample taken within this zone returned values of 0.677 % Molybdenum.
The borders of this large zone have not been established as of yet and will need additional stripping to determine the actual width and strike length.
East Zone Number 2
Another area of significant interest is a shear zone that runs for 6 kilometres with a width of approximately 40 metres. Only one grab sample was taken from it to see if it carried gold and it yielded 2.811 g/t Au. This zone will need additional sampling and stripping.
The zone is approximately 30 metres wide and the strike length has not been established as of yet. Surface sampling has revealed that the mineralization in this zone consists of Copper, Nickel, Cobalt, Gold, Silver, Platinum and Palladium. Additional stripping and sampling will also be needed.
This zone appears to be a layered intrusive and again is large with a width of 50 metres and a strike length of approximately 700 metres. Surface sampling has revealed that the mineralization consists of Cobalt, Copper, Nickel, and Silver. The borders of this zone have not been established as of yet either.
Both companies are very pleased with the mineral potential of this project. King’s Bay, as the new Operator of the project, is planning on commencing an exploration program that will consist of a geophysical survey, sampling, stripping, washing and diamond drilling. Geologist John Archibald is the Qualified Person under National Instrument 43-101.
Both companies are also presently in the middle of a 15,000 metre drilling program at their joint ventured high-grade gold, rare earth elements Bobjo Mine project, Red Lake, ON.
King’s Bay has also commenced a 10,000 metre drilling program at its 100 % Sakoose Gold Mine project as announced on May 12th, 2008.
Summary of the Terms of the Phyllis Lake Joint Venture Earn-In Agreement
In accordance with their Joint Venture Earn-In Agreement of June 18th, 2008, Mainstream Minerals granted to King’s Bay the right to acquire a fifty percent (50%) interest in the Phyllis Lake property upon King’s Bay funding Earn-In Exploration Expenditures in an aggregate amount of $500,000. The Earn-In Exploration Expenditures must be incurred within 15 months from the date of the Joint-Venture Earn-In Agreement.
The scope of this Joint-Venture Earn-In Agreement will also include any and all additionally staked claims by either Mainstream Minerals or King’s Bay that come within a 5 kilometre radius of the 64 claim units currently covered under the Phyllis Lake Option Agreement dated May 30th, 2008 between Mainstream Minerals and Falcon Mineral Exploration Limited (the “Vendor”). The Phyllis Lake Option Agreement is subject to a two percent (2%) Net Smelter Return in favour of the Vendor.
Upon King’s Bay earning the Earn-in Interest, Mainstream Minerals and King’s Bay shall be deemed to have entered into a Joint Venture Agreement in respect of the development, management and further exploration of the Property, and, if deemed warranted, bringing all or a portion of the Property into production by establishing and operating a mine or mines thereon. The respective initial interests of Mainstream Minerals and King’s Bay in the Joint Venture will be fifty percent (50%) and fifty percent (50%), subject to the 2% Net Smelter Return interest in favour of the Vendor. King’s Bay will be the initial Operator of the Joint Venture during the earn-in period.
About Kings Bay Gold
King’s Bay Gold is unique in the industry in that it owns most of the equipment required to carry out the various phases of exploration. This includes diamond drills, bulldozers and other exploration equipment, which gives the company the ability to quickly adjust work programs as exploration results are realized and company strategies change. The Corporation is a very active and well financed Canadian mineral exploration company with mineral projects strategically located in Canada’s gold camps. Strategic properties include - (i) a property located directly adjacent to Canada’s richest gold mine, (ii) two past producing gold mines, and (iii) other locations that are in very close proximity to either past producers and / or recent discoveries.
KBG Shares Outstanding: 41,242,900
King’s Bay Gold Corporation
President & CEO
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe KBG’s future plans, objectives or goals, including words to the effect that KBG or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.