June 29 2009 FAU News Release
Turn key mining operation
Mine fully permitted and bonded
Excellent potential for near term production
Significant exploration upside
Complete re-evaluation of the mine, mill, and resource in progress
Canada. Fire River Gold Corp. (the "Company", "FAU") (CNSX: FAU) is pleased to announce the signing of a letter agreement pursuant to which it has acquired an option to purchase a 100% interest in Mystery Creek Resources, Inc.
(MCR), a wholly owned Alaskan subsidiary of Pacific North West Capital Corp. (PFN)
MCR's assets include the Nixon Fork Gold Mine, located 56 kilometres northeast of McGrath, Alaska. FAU will pay US$50,000 on signing of the agreement.
Subject to regulatory and shareholder approval as may be required, FAU may exercise the option to pay a further US$450,000 over a six month period and a total of US$2.5 million in FAU shares at a deemed price of $0.45 per share. FAU will also issue PFN 1 million share purchase warrants shares at an exercise price of $0.50 for a period of twenty-four months from the date of issue entitling the Company to purchase an additional 1 million common shares. FAU will also refund all expenses incurred by PFN from May 1st 2009 until the finalisation of this transaction which will not exceed CDN$1,250,000.
Currently, PFN is expending a 2009 budget of CDN$1.25 million with the objective of conducting a comprehensive re-evaluation of mine reserves/resources, metallurgy, tailing production scenarios, completion of updated NI 43-101 technical report, financial analysis and update the mine plan. These studies will form the basis for a planned re-start of mining operations. In addition, FAU believes the current resource is not fully explored. Management plans to complete its due diligence by August 5th 2009 and establish the appropriate strategy to continue the development of the project.
PFN will remain the operator of the Nixon Fork Gold Project until the closing of this transaction. FAU's acquisition of the Nixon Fork Gold Mine is subject to regulatory and shareholder approval as may be required.
Nixon Fork Production History
Nevada Goldfields Inc. (NGI) constructed and operated the Nixon Fork Gold Mine high-grade underground gold mine from 1995-1999, recovering 137,749 ounces of gold and 2.1 million pounds of copper, with additional silver credits. The average production grade was 42 grams per tonne
(gpt) of gold, with an average production cost of US$266 per ounce. The mine was closed in 1997 due to declining gold prices.
St Andrew Goldfields Ltd (SAS) purchased the property in 2003. From 2004 through 2008 approximately US$54 million was expended on upgrades to the processing facilities and mine infrastructure and new equipment. During this time, 9,381 meters of reserve-resource definition drilling was conducted, an updated reserve-resource estimate was completed and additional metallurgical testing was completed. Limited production in 2007 resulted in recovery of 6,775 ounces of gold and 78,644 pounds of copper. The mine has been on care and maintenance basis since late 2007.
SAS commissioned Roscoe-Postle Associates of Toronto to complete NI 43-101 technical reports in 2003, 2005 and 2006, which reviewed the mineral reserve-resource of the property and completed a financial analysis of proposed mining operations. These reports are available from SAS reports filed on Sedar, technical report dated Oct. 4, 2006, (6.1 MB-98 pages).
Facilities at the Nixon Fork Gold Mine include a 200 tpd floatation plant with a gravity gold separation circuit, a sulphide floatation circuit.
In 2008, a CIL gold leaching circuit was purchased and approximately 60% installed. The mine also includes a fleet of mining vehicles, a self-contained power plant, maintenance facilities, drilling equipment, an 85 person camp, office facilities and a 1.5km long landing strip.
Mining and processing operations at Nixon Fork are fully permitted and bonded. Approximately 150,000 tonnes of mill tailings that a previous study showed averaged 8.1 grams per ton are being evaluated with the objective of being processed in the CIL circuit.
As the last two operators of the project focused most of their financial efforts on underground development, the mine infrastructure, equipment, permitting and bonding, only a limited amount of their budget was spent on the exploration upside on the Nixon Fork project. However, several new exploration targets were identified and FAU management plans to focus on these and other areas throughout the claim block with the objective of outlining new resources.
The acquisition of the Nixon Fork Gold Mine allows FAU to continue the development of a near term gold production opportunity. In addition, FAU is completing Phase I exploration on its 100% owned Draken Project and it is scheduled to be concluded by mid August. In addition, management is reviewing the data on its newly acquired Kansas Creek Gold Project.
Management's objective is to continue to aggressively acquire advanced stage gold projects.
Curt Freeman M.Sc., P.Geo. is the qualified person responsible for this press release.
About Fire River Gold
Fire River Gold is a public company focussed on gold exploration in North America and is currently advancing its 100% owned Draken Project in Alaska. FAU is also reviewing and compiling historic exploration data on its 100% owned Kansas Creek gold project in Alaska to develop a 2009 exploration program. Fire River trades on the CNSX under the symbol FAU.
Fire River Gold Corp. and Pacific North West Capital Corp. share directors in common who have abstained from voting on the Nixon Fork transaction.
On behalf of the Board of Directors
The Canadian National Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release
Disclaimer: This news release may contain certain "forward-looking statements". All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the British Columbia Securities Commission and available at www.sedar.com or filed with the Canadian National Stock Exchange. Any forward-looking statements are not guarantees of the Company's future performance and are subject to risks and uncertainties that could cause actual results, developments, and business decisions to differ materially from those contemplated by any forward-looking statements.
Except as required by law, the Company undertakes no obligation to update any forward-looking statements.