Redstar Gold Corp. ("Redstar") (TSX-V: RGC) and Strategic Merchant Bancorp ("SMB") (TSX-V: SMB) are pleased to report the addition of the historic Pioneer mine property to their North Bullfrog Project in Nevada. The project lies six miles north of the Bullfrog mine (Barrick Gold Corp., 2.5 million ounces of gold produced between 1989 -- 1999) and lies along the same fault zone, which is believed to be a control to regional gold mineralization. The North Bullfrog project consists of approximately five square miles of the Company's 100%-owned unpatented claims as well as its recently acquired, leased patented mining claims.
One of the four leased patented claim blocks includes the historic Pioneer mine. The Pioneer mine is one of a number of strongly-mineralized zones within the North Bullfrog project. Under the lease arrangements, Redstar has exclusive rights to explore and extract minerals from approximately 315 acres of privately held ground for an annual lease fee of US $30,300. The newly acquired ground falls under an existing option agreement between Redstar and SMB. Under this agreement, SMB has the right to acquire up to a 65% interest in the North Bullfrog project by making cash payments of $125,000, issuing 500,000 shares of SMB to Redstar and spending $2,800,000 in exploration expenditures over a four year period.
The Pioneer mine was active principally from 1909-1926. Production records are incomplete, but published accounts indicate that high-grade gold mineralization was mined. In June, 1909, production averaged 75 tons per day (tpd) grading 2.17 opt (ounce per ton) gold, (historic values recorded as dollars/ton -- grades calculated based on value of gold at that time). In 1915, 2,000 tons was produced over four months averaging 0.29 opt gold; and in 1916, 9,000 tons was produced over ten months averaging 0.24 opt gold. The mine contains an estimated 15,000 feet of underground workings, with mining limited to within about 300 feet of surface.
Reverse-circulation drilling in 1990 and underground sampling completed in the late 1980's identified significant mineralization remaining at shallow levels. Selected results are listed below. The holes were shallow (within 500 feet of surface) and most mineralized holes passed through workings, leaving gaps through the areas where the highest grades likely existed prior to mining. Supporting this is one five foot interval at the base of one of these cavities that was logged as "muck" and assayed 0.410 opt gold (hole NB150). The material is likely backfill or collapsed workings.
Based on published reports, historic drawings and 3D modeling by Redstar, the mineralization is controlled by a north-northeast striking, west-dipping fault and is continuous down dip for at least 400 feet. The mineralization remains open, as previous limited drilling failed to properly test for extensions to the mineralization along strike and at depth.
Mineralization at the Pioneer mine is part of a district-scale, volcanic-hosted, low-sulfidation epithermal system containing widespread, disseminated, low-grade gold and high-grade gold veins. At Pioneer gold occurs in silicified volcanic rocks containing quartz-chalcedony vein stockworks and breccias. Sampling of dumps and outcrops in the Pioneer area by Redstar and previous exploration programs has returned values to 4.5 ppm gold (0.131 opt gold). A sample of the tailings by Redstar returned a value of 0.089 opt gold.
Selected Historic Samples: Pioneer Mine Underground Au* Length** Sampling Hole ID opt gpt ft m Highest Value*** 20-foot Level 0.302 10.35 55 17 not reported 20-foot Level 0.166 5.69 25 8 0.371 20-foot Level 0.070 2.40 45 14 0.097 20-foot Level 0.031 1.06 110 34 0.080 NB150# 0.410 14.06 5 2 - NB155# 0.069 2.37 55 17 0.149 NB154 0.049 1.68 65 20 0.128 NB156# 0.070 2.40 30 9 0.191 NB152 0.062 2.13 20 6 0.143 NB158# 0.080 2.74 10 3 0.118
* 0.010 opt cutoff; opt = ounces per short ton; gpt = grams per metric tonne
** True widths unknown
*** Over 5 feet for drill holes; for underground sampling, sample widths are variable
# Hole passed through workings
The consolidation of patented and unpatented ground will enable Redstar to conduct a thorough and integrated district-scale exploration program which has not previously been achieved. Redstar will be compiling previous exploration results and will continue conducting surface exploration. Other activities anticipated for summer 2006 include geophysical surveys, underground mapping and sampling, developing 3D models and first-phase drilling.
Scott Weekes, Redstar's President adds: " The acquisition of the Pioneer mine is a significant addition to the North Bullfrog land package. Many historic holes intersected wide zones of lower grade gold mineralization, then went through old workings, and presumably missed the high grade Pioneer vein. As we compile and integrate historic data, we continue to be impressed with the quality of gold mineralization at North Bullfrog and in the opportunity to expand on previous exploration work. The project has the potential to contain open-pittable, bulk-tonnage low-grade resources with high-grade vein stockworks. Drill targets are already developing and we expect to complete a first-phase drilling program in 2006."
Redstar's exploration programs in Nevada are under the supervision of Dr. Jacob Margolis, Exploration Manager USA, for Redstar and a Qualified Person per Canadian NI43-101 standards.
On Behalf of the Board,
Redstar Gold Corp
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