VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 26, 2012) - Salmon River Resources Ltd. (TSX VENTURE:SAL) (together with its subsidiaries individually and jointly referred to as "Salmon River" or the "Company") is pleased to provide an update to its Press Release of June 25 and the final results of its geologic mapping programme at Treppo Grande South (E77/1208).
Extension of Treppo Grande Option
Salmon River is pleased to announce that it has further extended the previously announced payment terms on its agreement to acquire a 100% interest in the shares of Treppo Grande Iron Pty Ltd. (the "Acquisition"), a private Australian company which holds five granted tenements in the Yilgarn Craton of southwestern Australia, including the highly prospective Treppo Grande iron ore prospects. Under the terms of the extension agreement for the Acquisition (the "Extension Agreement"), the Vendor has agreed to extend the date for the next payment of A$4,000,000 to 3 August 2012.
A copy of the Extension Agreement will be posted on Sedar.
To enable Salmon River to manage the negotiations and to settle outstanding documentation in connection with various negotiations (any negotiations with strategic investors in relation to a financing, off-take arrangement, marketing rights and merger and/or acquisition and matters relating to both financings and similar matters), Salmon River has, subject to the approval of the TSX Venture Exchange, retained the services of KIH (HK) Limited ("KIH"), a subsidiary of Sunwah International Limited, an affiliate of Excel Day Limited, a shareholder of the Company holding approximately 26% of the outstanding shares, to provide transaction management and advisory services. Douglas Betts, who is Chairman of the Company, is also the President and CEO of Sunwah. The proposal from Sunwah has been negotiated on behalf of Salmon River by Garry Stein, an independent Director of the Company and Chair of its Audit Committee, and has been approved by the Board with Mr. Betts abstaining from the vote. The compensation under the contract is based upon fair market value for comparable services in Hong Kong, where it is anticipated that most of the services will be provided. The contract provides for payment of US$33,000 per month commencing 1 April 2012 and continuing to and payable on completion of the Transaction and all related matters, estimated to be prior to 30 September 2012, or termination and is to include reimbursement for reasonable direct costs. Additionally, KIH will be paid a success fee equal to one quarter of one percent (0.25%) of the aggregate value of the Transaction and the related financing, contingent upon and payable on closing of the Transaction.
As previously announced (see our Press Release of 26 June 2012), the Company engaged Digirock Pty Ltd ("Digirock") to carry out a program of 1:5,000 scale geologic mapping over the southern part of their E77/1208 tenement covering the Mount Manning Range, WA, which has potential for banded iron formation (BIF) related iron ore deposits. The mapping program has particularly focused on identifying and delineating the surface extents of hematite enrichment in BIF, and down-slope detrital iron deposits derived from BIF, which may contain high iron grades suitable for direct shipping ore, in the vicinities of the Hook, Shank and Western anomalies that were previously defined by interpretation of aero-magnetic survey data (See Figure 1).
On 25 June 2012, the Company previously summarized the results of a preliminary report, based on eleven days of surface mapping between 11-21 May 2012 at a 1:20,000 scale and provided an account of the geology observed. During that time Digirock mapped the Hook and Shank anomaly zones, over a combined strike length of about 7 1/2 kilometre ("km") at the southern end of Treppo Grande South. Salmon River has now received the final report on the surface mapping, which is consistent with the preliminary report and continues to indicate the significant potential of Treppo Grande South. Digirock geologists mapped and sampled the 60 square kilometre (km2) project area in 27 days of field-work, from 11th May to 6th June, 2012. The mapping program was principally focused on:
- Identifying and delineating the surface extents of hematite-enriched zones in banded iron formation, and down-slope indurated detrital ironstone deposits.
- Mapping lithofacies variations and structure in the exposed banded iron formations.
- Rock chip sampling of banded iron formations and indurated detrital ironstones to obtain representative geochemical data.
- Reconnaissance of airborne magnetic anomalies that were considered to have potential for direct shipping ores.
The geologic mapping has indicated that the Mount Manning Range comprising of the Treppo Grande tenements is composed of a 200-m-thick unit of banded iron formation that crops out over about 13 km outlining a broad north-northwest plunging synform. An iron rich facies of the banded iron formation composed of greater than 40% magnetite + martite extends for 4 1/2 km along the southwestern limb of the synform in the J-Hook area (See Figures 2 - 4). Three stratiform lenses of apparently high grade hematite-goethite ironstone up to 700 metres long are closely associated with the central section of that iron rich facies. The most extensive zone of indurated detrital ironstone is likewise spatially related to the iron rich facies of banded iron formation.
Previously, these iron-rich BIF units were classified in the preliminary mapping report of 23 May as BIF with >50% iron oxides and BIF with <50% iron oxides. The new iron-rich BIF facies classification in the final report (i.e. BIF with >40% iron oxides and BIF with <40% iron oxides) is a reflection of the predominant and widespread classic banded BIF composed of layers of very fine grained quartz with 40-70% iron oxides that were geologically-mapped within the designated mapping polygon in the tenement. The iron oxides are primarily magnetite, variably altered to martite and locally oxidized to goethite in weathered outcrops. The strike length and thickness of the iron-rich BIF unit is still generally the same at surface exposure. Additionally, more massive hematitic ironstone units have been mapped where the two previous diamond drill holes were collared/positioned. This is further elaborated in the cross-sections provided in the report.
The results of this Mount Manning South mapping project, and reconnaissance of some magnetic anomalies, indicate that the prime iron exploration targets are in the J-Hook area. The known hematite-goethite ironstone bodies may have formed by supergene processes related to weathering and accumulation of the detrital deposit or, alternatively, by hydrothermal metasomatism focussed on inferred northeast trending faults. The down dip extension is not yet determined but preliminary drilling suggests a high probability of >50m in depth and geophysical interpretations suggest the potential for extensions to at least 250m. Determination of the depth extents, grades and continuities of those hematite-goethite ironstone bodies and the down slope detrital ironstone deposits, will require a systematic drilling campaign.
These results support the potential for substantial DSO hematite mineralization.
A copy of the Digirock report will be available shortly on the Company's website.
Indurated detrital ironstone (DID), formed by weathering, erosion, down slope transport and cementation of hematiticgoethitic ironstone and BIFs, is fairly widespread on the mid to lower slopes of the Mount Manning Range. It is typically composed of centimetre to metre-scale angular clasts of BIF and hematite-altered BIF in a matrix of compact earthy to botryoidal-vuggy goethite-limonite (See Figure 5).
Detrital ironstone extends semi-continuously, for about 2 1/2 km strike length, in a 50 to 200 metres wide zone on the mid to lower slopes along most of the north side of the J-Hook anomaly zone. However, it is markedly diminished to a discontinuous 10 to 50 metres wide belt along the western side of the Shank Anomaly zone, apparently in accord with the strike extent and thickness of iron rich BIF unit that peters out near 6679500N. Texturally similar indurated detrital ironstone also exists in significant patches around the southern and eastern sides of the Treppo Grande South, notably near the major synform hinge and northwards, discontinuously to about 6681500N, and in small areas on the north-eastern and southern flanks of the Western Anomaly hill. However, our subjective visual estimates indicate that these outlying detrital deposits may be of lower iron-grade, because they appear to be largely derived from non-iron-enriched BIF facies.
The thicknesses of the indurated detrital ironstone zones are uncertain but possibly in the order of about five metres thick, judging by the heights of the small breakaway scarps that frequently mark their lower edges (See Figures 6 and 7). Elsewhere, the lower boundary of indurated detrital ironstone is poorly defined by a cover of, or transition to, non-indurated talus of angular BIF fragments and soil that extends for up to hundreds of metres outward on the lowermost slopes.
The next phase of exploration work during the period to the end of 2012 will initially focus on completing an updated Conservation Management Plan and a new Programme of Work. This will allow for more intensive drilling at Treppo Grande South and an extensive rock chip sampling programme to target outcropping BIF and DID units. A small resource delineation drill programme is expected to be completed during this period.
Financing and Other Negotiations
As noted previously, during the last several months, Salmon River has also been involved in extensive negotiations with a number of strategic and financial investors regarding funding for payments under the terms of the Acquisition Agreement and for the furthering of the Treppo Grande Project. The Company continues in discussions with a number of potential investors regarding an approximately C$10 million financing to fund the payments to the Vendor and the exploration program and working capital requirements. More details are expected to be released shortly.
These discussions are at an advanced stage and the Company remains confident of the ultimate success of these discussions, especially given the potential of the Treppo Grande Iron Project. Any financing proposals will be subject to approval by the TSX Venture Exchange and may require shareholder approvals. There can be no assurance that these discussions will be successfully completed or required approvals obtained.
Mr. Hector Galam, B.App.Sc. (Hons) (App. Geology), M.Sc. (Geology), is a Member of both the AIG and the AusIMM; and the Exploration Manager responsible for the geological programmes on all the EL's referenced in this document. He is a full time employee of the Company. Mr. Galam is a Qualified Person as defined in National Instrument 43-101 and has assisted in the preparation of and approved this news release in relation to the exploration update.
Salmon River has established and maintains a comprehensive quality assurance-quality control (QA/QC) program.
ABOUT SALMON RIVER RESOURCES LTD.
Salmon River Resources Limited (TSX VENTURE:SAL) is a mineral exploration company engaged in the exploration for and development of commercial deposits of iron ore in Western Australia. It exercised its option to acquire five tenements in the Yilgarn region of Western Australia including the Treppo Grande iron ore project, approximately 210 km northwest of Kalgoorlie, comprising three tenements covering approximately 396.7 km2. Completion of the acquisition of the tenements is subject to certain conditions, including payment of approximately A$100 million to the vendor. For further information see our website at www.salmonriver.com.au.
This press release contains forward-looking statements that are based on the beliefs of management and reflect Salmon River's current expectations. This press release relates to the extension of terms for the Treppo Grande Iron acquisition, further exploration and future financing requirements. The forward-looking statements are based on certain assumptions, which could change materially in the future, including the assumption that the current negotiations will lead to definitive agreements, that the transactions and financings contemplated herein will be completed, that Salmon River will be able to complete on its exercise of the Treppo Grande option and that the Treppo Grande property will ever be developed. By their nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include the risk that the definitive agreements contemplated may not be completed, that Salmon River may not complete the financings in the amounts contemplated and that the Company may not complete on its exercise of the Treppo Grande acquisition. There can be no assurance that forward-looking information 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 information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with applicable laws.
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulatory authorities. 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.
Note: To view Figures 1 through 7 associated with this release, please click the following link: http://media3.marketwire.com/docs/sal0726.pdf.
Neither 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.