Kenai Resources Ltd. ("Kenai") (TSX VENTURE:KAI) is pleased to
provide a further update on drilling at the Sao Chico gold project
in north central Brazil. The drilling program currently underway at
Sao Chico from core holes 11-SC-001 to 11-SC-005 has demonstrated
that it is drilling into deeper zones which may be the source of
the multiple parallel veins mined on the Sao Chico garimpo. Surface
mining by garimpeiros was estimated to have produced two tonnes of
gold (64,000 gold ounces) in the period of 1999 to 2001 by
rudimentary methods and where the grades were lower than evidenced
from recent underground extensions of the surface veins sampled,
due to extensive weathering of the host granite and leaching of the
gold veins.
Drilling Update: Early Signs of Potential for Extensive Gold
System
-- Drilling of the first 5 holes (574 metres) of a total of about 25 holes
planned for the current 3,000 metre program identify wide altered
granite zones with major quartz structures with abundant sulphides.
-- These zones are regarded as deeper extensions of near surface zone which
hosted gold mineralization in a 20 metre deep drive which sampled at an
averaged over 17.7 g/t gold over an east-west length of 58 metres.
-- Mineralization to date identified from drilling over a strike length of
80 metres and a vertical depth of 154 metres.
-- Multiple zones are being identified below the surface expression of the
system which has been mined by garimpeiros since 1985 in the local
surrounding area.
The extensions of the surface gold veins are expected to be more
concentrated (higher grade) than that experienced on surface as
there has not been weathering and leaching at depth. This has been
evidenced by the sampling of a 20 metre deep underground drive in
an altered zone which hosts gold-bearing quartz/sulphide vein
structures that averaged 17.7 g/t gold over a sampled 58 metre
east-west strike length in primary (unoxidised) rocks at a depth of
20 vertical metres. Within this altered zone, massive galena and
pyrite were identified. This type of mineralization is what is
being observed in the altered zones of drill holes 11-SC-002 to
11-SC-005.
Evidence of the immediate potential is also demonstrated by more
than 200 small garimpeiro shafts over a surface area of 1,000
metres east-west by 600 metres north-south.
Drilling to date has focussed on the area of known high grade
mineralization observed in the underground drive, with the
completion of five diamond drill holes for a total to date of 574
metres. Quartz/sulphide vein zones between 30 centimetres and 6
metres in apparent width have been intercepted in drillholes
11-SC-002 to 11-SC-005. Quartz vein zones contain individual quartz
veinlets less than 3 mm wide and quartz veins up to 30 cm wide,
with a moderate to strong pyrite-chlorite-k-feldspar selvedge.
Disseminated to massive galena-pyrite is observed in hole 11-SC-004
(49 to 56 metres) as a selvedge to quartz veins.
These intercepts so far demonstrate mineralization over a strike
length of 80 metres and to a downhole length of 188 metres, equal
to a vertical depth of 154 metres. Mineralization is interpreted to
occur as lenticular bodies of quartz and disseminated to massive
sulphide hosted in a larger fault zone. Where drilling intercepts
the fault zone mineralization is commonly, but not always,
observed.
Ongoing drilling is planned to explore the strike and down dip
continuity of the mineralization observed to date, and also to
explore the potential for other lenticular mineralized bodies
hosted within the fault zone.
To view Figures 1-4, please visit the following link:
http://media3.marketwire.com/docs/kai1019i.pdf.
The first five diamond drillholes (11-SC-001 to 005, to downhole
depths of 86.2 metres, 80.5 metres, 111.9 metres, 104.4 metres and
191.2 metres respectively) have now been completed. In the third,
fourth and fifth holes, wide quartz veins with massive abundant
pyrite have been intersected at predictable downhole depths,
flanked by smaller veins with massive observed pyrite and some
galena.
The drilling program commenced with one shift per day and has
now been increased to two shifts per day. A second Minexplor rig is
planned to be at the site by the third week of October.
The initial drillholes are targeting vein structures near the
Waldimiro Vein down dip, beneath the high grade eastern end of the
existing underground drive, along the broadly east-west strike of
vein structures mapped at the surface and laterally to the north
and south. Preliminary assay results are expected from these first
holes in November.
About Sao Chico
The project is more completely described in Kenai's NI 43-101
Technical Report on the project, details of which were contained in
Kenai's news release of January 20, 2011. It has since been filed
on SEDAR and on Kenai's website at www.kenairesources.com.
Sao Chico is located within the Tapajos region in Brazil, the
site of one of the biggest gold rushes in recent history. In the
late 1970s and 1980s, approximately 500,000 garimpeiros rushed to
the region to exploit extensive areas of newly discovered alluvial
gold, producing approximately 20-30 million ounces of gold before
the easily won alluvial gold deposits were largely depleted.
Despite the gold rush, little modern exploration has been conducted
over the region to date, with excellent potential to expand gold
operations at Sao Chico. The Sao Chico project team has extensive
experience and expertise of operating within the region, which will
provide a focussed and systematic effort to gold production and
exploration at Sao Chico.
As previously advised, Gold Anomaly via a wholly owned
subsidiary will receive all cash flow generated by GOAB at Sao
Chico until Kenai exercises its options to acquire 50% and then 75%
equity in the Sao Chico mineral rights to the Sao Chico project.
The options expire at end-September 2012.
About Kenai Resources
Kenai is a Canadian company focused on precious mineral project
exploration and development, towards early significant gold
production. In addition to the Sao Chico gold project in Brazil,
Kenai is also involved in exploration of the wholly-owned Quartz
Mountain and Hope Butte epithermal gold projects in South-Eastern
Oregon, both located in Malheur County, close to the Oregon border
with Idaho. Kenai's current indicated and historical gold resources
from the two Oregon projects are summarized as follows:
Project Tonnes Grade Ounces AuEq Status/Classification
Quartz Mountain 15,050,200 0.80 g/t Au 352,667 Indicated Resources
NI43-101 compliant
Hope Butte 5,000,000 0.91 g/t Au 146,300 Historical, not NI
43-101 compliant
Footnotes:
1. For Quartz Mountain, resources above a 0.34 g/t cutoff with silver
converted to gold equivalent using a ratio of 49.5:1 silver to gold.
Metallurgical recoveries were not considered. Indicated resources are as
reported in an independent November 2006 NI 43-101 report, posted on
SEDAR at that time.
2. The Hope Butte resources are considered historic in nature, do not
comply with current NI 43-101 standards, have not been verified by the
Company and therefore should not be relied upon. It is uncertain if
further exploration will result in the discovery of an economic mineral
resource.
On behalf of the Board of Directors of Kenai Resources Ltd.
Greg Starr, President and CEO
Shares Outstanding: 62,406,734
Forward-Looking Statements: Statements in this release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed and
elsewhere in the company's periodic filings with Canadian
securities regulators. The economic viabilities of the resources
estimates discussed in the release have not been established and
may not be. Such information contained herein represents
management's best judgment as of the date hereof based on
information currently available. The company does not assume the
obligation to update any forward-looking statement.
The technical content of this news release has been reviewed by
Kenai's Vice President Technical Services, Neil Cole, who has
sufficient experience which is relevant to the style of
mineralization under consideration and to the activity which is
being undertaken and planned to qualify as a Qualified Person under
NI 43-101.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Kenai Resources Ltd. Greg Starr President and CEO
(604) 669-5753 (604) 688-9895 (FAX)www.kenairesources.com
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