Redstar Gold Corp. (Redstar) has signed a letter agreement with AngloGold Ashanti North America Inc. (AngloGold Ashanti) giving Redstar the option to earn a 100% interest in all of AngloGold Ashanti's Red Lake properties. The properties consist of 26 patented claims and 13 staked claims in the West Red Lake area of northern Ontario and includes the Newman Todd property where previous work has outlined 3 zones of gold mineralization.
Under the terms of the agreement, Redstar will issue 700,000 shares to AngloGold Ashanti over a three-year period as well as a retained royalty. In addition Redstar will convey to AngloGold Ashanti $1,000,000 worth of shares if a mine is put into production within the property. An additional $1,000,000 worth of shares will be issued once production exceeds 250,000 ounces of gold.
Geophysical surveys, drilling and trenching completed by AngloGold Ashanti in 2003 and 2004 outlined an extensive gold bearing alteration system, which underlies part of the Newman Todd property. In particular, this alteration system sits adjacent to the three known zones of gold mineralization Newman Todd property.
The Newman Todd property represents a high priority exploration target that has not been drilled since the mid 1980's. Previous work outlined three styles of gold mineralization: gold associated with quartz veins in a large breccia zone, gold associated with iron formations and gold associated with a mafic contact. Drilling within these zones returned results up to 19.5 g/t gold over 2.9 metres and 27.18 g/t gold over 1.4 metres. A new structural interpretation of the area indicates these zones have not been adequately tested and warrants additional work.
Scott Weekes, president of Redstar states: "This agreement with AngloGold Ashanti gives Redstar the option to earn a 100% interest in a high priority exploration property in Red Lake and complements our exploration alliance with AngloGold Ashanti in Nevada. We look forward to working with AngloGold both in Red Lake and in Nevada."
On Behalf of the Board,
REDSTAR GOLD CORP.
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