|By Marketwired .||
|September 19, 2013 05:22 PM EDT||
OTTAWA, ONTARIO -- (Marketwired) -- 09/19/13 -- Red Ore Gold Inc. ("RXX"), or the Company, is pleased to announce that it has approved a non-brokered private placement of its common shares, at $0.10/unit, to a maximum of $500,000 (5 million units). Each unit consists of one common share and one non-transferable share purchase warrant, with each whole warrant being exercisable at a price of $0.15 per share for a period of two years. The warrants will have a Forced Exercise Provision whereby, if the closing price for the Company's common shares is $0.25, or greater, for a period of 10 consecutive trading days from the date of issue, the warrant holders will have 30 days to exercise their warrants; otherwise, the warrants will expire on the 31st day. The Company is not currently listed for trading on any Canadian Exchange; this provision will only have effect subsequent to successfully listing on an Exchange. The proceeds of the private placement will be used to conduct an exploration drill program on the Company's Rye Patch property; to conduct a share buy-back and cancellation; to cancel an outstanding convertible debenture; to conduct further exploration programs, as warranted; and, for general corporate purposes.
Share Buy-Back and Cancellation of Convertible Debenture
On September 9, 2013, Red Ore Gold Inc. and Galahad Metals Inc. (TSX VENTURE:GAX.H) signed an agreement for the repurchase and cancellation of 6,609,088 common shares of Red Ore Gold currently held in the Galahad treasury. The agreement also includes the cancellation of a convertible debenture held by Galahad, in the amount of $184,319.19.
The transaction will close upon the payment of $135,000 to Galahad, the funds to be obtained from the proceeds of the current private placement.
Upon cancellation of the Galahad shares, and assuming completion of the maximum offering in the current private placement, Red Ore will then have 18,654,851 common shares issued and outstanding.
Larry Hoover, CEO, is pleased to update shareholders of Red Ore with respect to recent events, and plans for the future. "Since becoming CEO and President in September 2012, I have been working hard to build a solid foundation for the currently proposed exploration program. Significant debt settlements have been signed, and are detailed in our annual audited financial statements (filed to SEDAR on August 28), as events subsequent to our financial year end (April 30). Other smaller debt settlements are pending. Administrative costs have been slashed. Furthermore, with complete subscription of the current private placement, and upon completion of the share buy-back agreement, the company's issued and outstanding balance will be lower than before the private placement began, with a clean balance sheet, and a fully funded exploration program for the coming financial quarters. The Rye Patch lease and Bureau of Land Management fees on the property are paid for the coming year. The Rye Patch project is now fully permitted for drilling, and the related BLM reclamation bonds have also been paid. We are ready to go to work immediately."
The Company has conducted two field prospecting programs on the Rye Patch property. The first was conducted during due diligence inspections prior to signing the lease on the property, in 2011. Two grab samples obtained from mine dumps adjacent to the historic Rye Patch Group Mine returned 4,350 g/t silver (Ag), 0.9 g/t gold (Au), 0.54% copper (Cu), 0.54% antimony (Sb), 1.65% lead (Pb), and 0.19% zinc (Zn); and, 2530 g/t silver (Ag), 0.36% copper (Cu), 0.34% antimony (Sb), 0.09% lead (Pb), and 0.83% zinc (Zn), respectively. (Please refer to the news release dated November 2, 2011.) Historical records indicate that the Rye Patch Mine produced 600,000 ounces of silver before 1870, and that some of the ore graded 10% silver by weight (100,000 g/t Ag). These historical records are anecdotal in nature, are not 43-101 compliant, and cannot be relied upon. They are included here only for their historical context.
The second field program employed soil geochemistry, specifically the Mobile Metal Ion (MMI) methodology. MMI provides information about differences in the dissolved mineral ion content in soil samples. Localized soil mineral "hot-spots" are believed to arise from mineral ions weathering out of bedrock sources, and forming higher concentrations in soil samples vertically above their source. The ratio of the metal ion concentrations of a mineral to its normal background level is the "response ratio", or RR. Utilizing this method, the Company located what is interpreted to be a fault offset of the silver mineralized zone hosting the Rye Patch Mine workings. A significant gold anomaly appears to also be associated with the new offset zone. The RR in silver ranges up to 86 times background along the new zone, and in gold, up to 2,400 times background. (Generally, a RR of 40 or higher is considered to be a significant anomaly.) MMI relative responses cannot be used to infer grade, but are instead, useful for drill targeting. Please refer to page 17 of the corporate presentation, available at www.redoregold.com, for details of the MMI soil program.
Larry Hoover, commenting on these results: "Although we know the big deposits in the area often have variable gold-rich or silver-rich zones, it came as a complete surprise to be prospecting a known and historically high-grade silver deposit, only to discover that the interpreted extension also showed a high MMI gold response overprinting the silver zone. As the new gold/silver target is only 150 meters to the north of, and directly on strike from the historical high-grade Rye Patch Mine silver workings, we are quite excited to be conducting the first exploration drill program the property has ever seen. This high-priority gold/silver target, discovered last year, has motivated me to restore the Company to solvency, in order to advance this work program at our earliest opportunity."
About the Rye Patch Property
The Rye Patch property, including the historic Rye Patch Group Mine, is believed to host the potential to develop both additional high-grade veins and also large gold-silver bulk mineable mineralization similar to the adjacent Florida Canyon and Standard open pit/heap leach mines, hosted in carbonate rocks of the Triassic age Grass Valley, Natchez Pass and Prida Formations. The Rye Patch property is comprised of 75 unpatented lode claims and one patented lode claim, covering approximately 600 hectares (1,500 acres) and 4 km (2.5 miles) of prospective strike length over the productive Humboldt Thrust Fault. Also located on this mineralized trend are the Standard Mine 8.3 kilometers (5.2 miles) to the north, and the Coeur Rochester Mine 17.3 kilometers (10.8 miles) to the south.
Discovered about 1860, the Rye Patch Mine is reported by the Nevada Bureau of Mines and Geology to have produced more than 600,000 ounces of silver by 1870. In 1954 they reported that 80 tons of high grade tungsten ore was produced and also that minor high-grade antimony was produced during the 1960's. The gold-silver target zone has been traced for more than 4 km (2.5 miles), and occupies a north-south trending structural corridor 120 to 300 m (400 to 1,000 feet) in width along a major thrust fault. Previous explorers have reported that mineralization on the south end of the corridor is silver dominated, progressively becoming enriched in gold to the north, where historic surface grab samples range from 1.25 to 3.44 grams per tonne (.04 to .11 ounces per ton) gold in the mineralized zone in the Prida and Rochester Rhyolite Formations. Antimony-rich veins are frequently associated with gold mineralization and historic surface grab samples from the central portion of the main corridor have yielded results to 1.25 grams per tonne (.041 ounces per ton) gold and 291 grams per tonne (9.3 ounces per ton) silver.
Extensive mine workings exist to only a depth of 61 meters (200 feet) near the southern portion of the property in the vicinity of the Rye Patch Group Mine. Additional small mine workings are present along the entire strike of the mineralized corridor. Most of the historic workings below surface are accessible but none have been adequately mapped or sampled. The Rye Patch property claim group was fairly recently consolidated from a collection of smaller claim holdings, explaining the lack of modern exploration activity. The property is a 100% leasehold, without earn-in requirements, with lease payments considered to be advances against the NSR held by the lessor. The property has never been drilled.
Garry K Smith, P. Geo. is the Qualified Person, as defined by National Instrument 43-101, for the Rye Patch Project, and has approved the contents of this news release.
For further information, please go to www.redoregold.com.
The statements in this press release may contain forward looking statements that involve a number of risks and uncertainties. Actual events or results could differ materially from RXX's expectations and projections. Neither the 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 press release.