Redstar Gold Corp. ("Redstar") has recently signed an option agreement to acquire a 100% interest in a 2,000-hectare land position in the Atikokan area of northwestern Ontario. The region is a historical mining region, known mainly for the Steep Rock Iron Ore Mine and later the Caland Ore Mine with active production over a 40 year period from the late 1930's until shutdown in 1978 - 80. Gold exploration in the region has been limited since World War II, but has recently revived after positive results from government initiatives funded by the Ministry of Northern Development and Mines, such as the 1999 launch of Operation Treasure Hunt, a two year $19 million geoscience program aiming to uncover new opportunities for mineral exploration in northern Ontario. In addition to positive results from lake sediment surveys and airborn magnetic surveys in the area, there has been a noticeable increase in land acquisition and exploration activity in the area, including recent project acquisitions by Teck Cominco and Coniagas Resources.
Redstar's analysis and interest in the Atikokan area relates to observed similarities between the Atikokan gold showings and the gold mineralization in the Red Lake exploration camp. Both areas have demonstrated high-grade gold values in quartz veins associated with structures in volcanic rocks. In addition to the narrow-vein, high grade discoveries that are beginning to emerge, the Atikokan area also hosts the large tonnage low grade Hammond-Reef deposit (Pentland Firth Ventures) that has a historical published resource of 85.0 million tonnes grading .93 g/t gold (or 2.56 million ounces) within intrusive rocks. Management of Redstar believes that activity in the area will continue to increase this year and large land packages will become more expensive and difficult to acquire.
The land acquired by Redstar hosts the recently discovered Sunshine Road showing. Grab sampling by the vendor and confirmed by the Ontario government returned values up to 66.0 g/t gold in a quartz vein. Of particular interest is the fact that sampling outside of the veins returned values up to 2.4 g/t gold. The showing was discovered in 2002 and has had virtually no exploration.
The land package acquired consists of two separate but contiguous properties, the Sunshine Road and Chubb-Copper properties. Redstar can acquire a 100% interest in the Sunshine Road property by making cash payments of $145,000, share issuances of 245,000 and completing $475,000 of exploration expenditures over a four year period. Redstar can also acquire 100% interest in the Chubb-Copper property by making cash payments of $75,000, share issuances of 105,000 and completing $400,000 of exploration expenditures over a four year period. The vendor will retain a 3% Net Smelter royalty (NSR). Redstar retains the right to purchase back up to 2% of the royalty for $1,000,000 per percentage point.
The acquisition of the Sunshine Road and Chubb-Copper properties is subject to regulatory acceptance of the TSX Venture Exchange.
Redstar Gold Corp. is a junior mining and exploration company with properties located in the prolific Red Lake Gold Camp in northwestern Ontario. Redstar is focusing its acquisition efforts on under explored gold prospects in North America, which can be acquired under competitive terms and developed by Redstar's technical team. The website for Redstar is www.redstargold.com
On behalf of the Board,
REDSTAR GOLD CORP.
Linear Capital Corp.
The TSX Venture Exchange has not reviewed and does not accept the responsibility for the adequacy or the accuracy of this news release.