North Arrow Minerals Inc. (NAR: TSXV) is pleased to announce an option agreement with Chelsea Minerals Inc., (NEX:CCC.H) allowing Chelsea the right to earn a 60% interest in North Arrow's Hope Bay Oro gold project in Nunavut. The Oro project consists of five leases covering an area of over 10,000 acres that adjoins the new Hope Bay Gold Mine. Under the terms of the agreement, Chelsea may earn up to a 60% interest in the project by making an initial cash payment of $50,000 and spending $5 million over a five year period. A minimum expenditure of $500,000 is required in the first year.
In conjunction with entering into the Option Agreement, Chelsea has entered into a Letter of Intent with Sennen Resources Ltd ("Sennen") (TSXV: SN), which contemplates that Sennen will acquire all of the issued and outstanding shares of Chelsea by way of a share exchange, whereby, pursuant to a Plan of Arrangement, shareholders of Chelsea would receive one share of Sennen for every two and one half common shares of Chelsea held by them. Sennen has over $15 million in its treasury and can fund the exploration obligations for the Hope Bay project without the need to raise any further capital.
North Arrow's Oro project directly adjoins the Doris North mine being brought into production by Hope Bay Mining Ltd (a wholly owned subsidiary of Newmont Mining Corporation). Hope Bay Mining's project includes the Doris, Boston and Madrid deposits that contain an estimated 9 million ounces of gold and collectively represent one of the largest undeveloped gold deposits in Canada. The deposits are located within an 80 km long Archean greenstone belt, the northern 10 km of which is covered by North Arrow's mining leases. Hope Bay Mining is continuing aggressive exploration in parallel with mine development which confirms their expectations of making further discoveries.
The Oro project hosts numerous gold showings and potentially gold bearing structures which have been evaluated by only minimal exploration. Several high grade native silver deposits, mined in the 1970's, are also located on the property and the potential exists to find larger hidden silver deposits associated with structures since identified across the property.
Exploration work on the Oro project will be focused on two mineralized zones; the Ida Point prospect at the northern end of the property and the Wombat zone at the southern end. Exploration at Ida Point will be centred on the 600 m long Elu shear zone, where surface trenching over a 400 m strike length has returned significant gold values including 11.6 grams per tonne gold (g/t Au) over 1.9 m and 24.7 g/t Au over 5 m. A four hole diamond drill program in 1998 returned downhole intersections of 14.3 g/t Au over 2 m and 5.5 g/t Au over 6 m. Wombat is a gold bearing shear zone which has been traced for more than 1,000 m near the property's southern boundary. A number of short holes were previously drilled at Wombat with one returning 40.3 g/t Au over 2.7 m.
The location of the Oro project, situated along strike from Hope Bay Mining's multi-million ounce gold deposits, represents a significant opportunity for North Arrow and will supplement the Company's diamond exploration activities in northern Canada. The exploration program for the Oro project will be managed by North Arrow and the permitting process is underway with plans to commence drilling and surface exploration as early as possible in 2011. Access to the property is enhanced by its proximity to Hope Bay Mining's Roberts Bay port facility and airstrip, located two kilometres and three kilometres to the southwest, respectively.
Completion of the Option Agreement with Chelsea and its Plan of Arrangement with Sennen remains subject to completion of a satisfactory due diligence review and receipt of all necessary regulatory and shareholder approvals, including but not limited to acceptance of the transaction by the NEX and, if required, the TSX Venture Exchange.
North Arrow's exploration programs are conducted under the supervision of Gordon Clarke, P.Geol (NT&NU), Vice President, Exploration for North Arrow and a qualified person under NI 43-101.
North Arrow Minerals Inc.
/s/ "D. Grenville Thomas"
D. Grenville Thomas
President and CEO
For further information, please contact:
D. Grenville Thomas
President and CEO
Tel: 604-668-8355
Email: [email protected]
Gordon Clarke
Vice President, Exploration
Tel: 867-445-6527
Website: www.northarrowminerals.com
