VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 07/11/16 -- Medgold Resources Corp. (TSX VENTURE: MED) (the "Company" or "Medgold") is pleased to announce that it has entered into an option agreement to acquire up to a 100% interest in the Marrancos Project (the "Project") located in northern Portugal.
As part of its due diligence, Medgold recently completed a reconnaissance-level rock-chip sampling program. Out of 22 rock chip samples collected from across the Project license area, 14 assayed greater than 1 g/t Au. On the primary Marrancos target area, four samples were collected from both float and outcrop, and returned results of 35.90 g/t Au, 8.63 g/t Au, 4.75 g/t Au, and 4.19 g/t Au.
Dan James, President of Medgold, said: "We are very excited to have the opportunity to earn an interest in the Marrancos Project. This low-cost agreement allows Medgold to continue building its project pipeline in Portugal and our due diligence work has already identified a priority target for further work. Marrancos boasts several of the key features we look for in a target. Firstly, it's located at the intersection of two major orthogonal structures and is close to a sediment-granite contact. Secondly, our recent sampling and historical trench results show that the local structures host high-grade gold mineralization. Our sampling includes a high of 35 g/t Au. We're planning a program of systematic mapping and sampling over the summer months with the aim to define a drill target by the fall of 2016."
The Marrancos Gold Project
The Marrancos Gold Project, which covers a total area of 39 sq km, is located in the Braga District in central-northern Portugal, about 20 km north of the city of Braga. The project is centred on the intersection of the northwest-trending Vigo-Regua fault and the northeast-trending Portela das Cabras-Carbalinho fault, which is considered to be the macro-control on the regional mineralization.
The Project covers four reasonably well-defined targets, including the priority target, the Marrancos prospect. Mineralization at the prospect is controlled by a 15m wide, northeast-trending structure, which crops out and is mineralized over a strike length of 600m. The prospect is located approximately 1km from the main metasediment-granite contact, which, is an important control on gold mineralization at some of Medgold's other projects (e.g. Castromil, Lagares).
Historical trenching across this structure by the Portuguese Geological Survey (Servico de Fomento Mineiro, SFM), identified narrow zones of very high-grade mineralization; e.g. 1.0m at 97.5 g/t Au. SFM later completed 8 diamond drill holes, for 641.88 metres, which returned a best result of 5.82m @ 5.14 g/t Au (from 70.50m). The reader is cautioned that these are historical results and a Qualified Person has not completed the work necessary to verify these results.
Medgold's recent due diligence work has confirmed the presence of the 15m wide shear corridor, but perhaps more importantly, it has also identified the presence of sigmoidal quartz veins, up to 50cm in thickness, cross-cutting the main shear corridor. Their orientation is northwest-trending and perpendicular to the northeast-trending shear. Medgold's sampling has returned four rock-chip results of 35.90 g/t Au, 8.63 g/t Au, 4.75 g/t Au, and 4.19 g/t Au. Preliminary results indicate that the sigmoidal quartz veins can contain significant gold concentrations, as high or higher than those thus far observed in the main shear corridor. Medgold's geologists noted that the sigmoidal veins run parallel to the historical trenches and drilling. This indicates that previous exploration would either have missed or overlooked these sigmoidal veins.
Exploration work over the coming months will focus heavily on the detailed analysis of the vein-structure relationship and the principal controls on the distribution of the high-grade sigmoidal veins. If the work identifies suitable drill targets, Medgold aims to drill-test this zone in the Fall, immediately following the completion of the Centerra-funded drilling program at Boticas Gold Project.
Medgold has the option from Lusorecursos, a private Portuguese company, to earn an initial 70% interest in the Marrancos Project by making a cash payment of EUR25,000 and incurring exploration expenditures of EUR150,000 on or before 12 months following the agreement date. Upon acquiring the 70% interest in the property, Medgold shall elect to either form a 70:30 joint venture with Lusorecursos or be granted a second option to earn an additional 30% interest. Medgold may exercise the second option, to earn a 100% interest in the Project, by making a cash payment of EUR20,000 to Lusorecursos and incurring exploration expenditures of EUR150,000 within the following 12 months. Upon acquiring the 100% interest in the Project, Medgold shall grant to Lusorecursos a 1% NSR royalty on production from the property, and Medgold will have the right at any time to purchase the royalty by making a cash payment to Lusorecursos of US$1.0 million.
Shares for Services
In order to preserve its cash on hand during 2016, Medgold has agreed, subject to TSX Venture Exchange approval, to issue a total of 300,000 shares of the Company to Dan James in part consideration for his ongoing services as the Company's President. The shares will be issued in installments over a one-year period commencing as of January 1, 2016.
Quality Assurance/ Quality Control
Samples were prepared by ALS Minerals at the Seville Laboratory, Spain. Rock samples were analyzed for gold using a 50 g fire assay with AAS and/or gravimetric analysis, and for multi elements by Aqua Regia digestion followed by ICP-MS and/or ICP-OES analysis by ALS Minerals at the Omac Laboratory, Ireland.
Certified reference materials, blanks, and field and laboratory duplicates were routinely inserted for quality assurance and quality control.
David Clark, PGeo, consulting geologist to the Company, is a Qualified Person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. Mr. Clark has reviewed and approved the disclosure of technical information contained in this news release.
Medgold is a European-focused, TSX-V listed exploration and development company targeting gold properties in northwest Iberia and the under-explored gold provinces of southern Europe. Run by a highly experienced management team with a successful track record of building value in resource companies, Medgold is aiming to become a leading European gold company.
ON BEHALF OF THE BOARD
Daniel P. James, President & Director
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
Certain statements contained in this news release constitute forward-looking statements within the meaning of Canadian securities legislation. All statements included herein, other than statements of historical fact, are forward-looking statements and include, without limitation, statements about the possible acquisition by the Company of an interest in the Marrancos Project and proposed exploration work thereon. Often, but not always, these forward looking statements can be identified by the use of words such as "estimate", "estimates", "estimated", "potential", "open", "future", "assumed", "projected", "used", "detailed", "has been", "gain", "upgraded", "offset", "limited", "contained", "reflecting", "containing", "remaining", "to be", "periodically", or statements that events, "could" or "should" occur or be achieved and similar expressions, including negative variations.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by forward-looking statements. Such uncertainties and factors include, among others, if the Company will acquire an interest in the Marrancos Project and if the proposed exploration work thereon occurs as proposed; changes in general economic conditions and financial markets; the Company or any joint venture partner not having the financial ability to meet its exploration and development goals; risks associated with the results of exploration and development activities, estimation of mineral resources and the geology, grade and continuity of mineral deposits; unanticipated costs and expenses; and such other risks detailed from time to time in the Company's quarterly and annual filings with securities regulators and available under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to: the Company will conduct exploration work on the Marrancos Project as proposed; that the Company's stated goals and planned exploration and development activities will be achieved; that there will be no material adverse change affecting the Company or its properties; and such other assumptions as set out herein. Forward-looking statements are made as of the date hereof and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking statements.