January 19, 2007 – BCGold Corp. ("BCGold" or the Company) is pleased to announce that it has signed a letter agreement to acquire 100% interest in the Engineer Mine (Property), a historic high-grade gold producer situated in the Atlin Mining District in northwestern British Columbia.
Gold was discovered on the Engineer Mine property in 1899. A total of 561,659 grams gold (18,058 ounces) and 278,373 grams silver (8,950 ounces) was produced from 14,263 tonnes of ore at Engineer Mine during the period 1913 to 1952 (BC Geological Survey MEMPR MINFILE Report, MINFILE Number 104M 014). This equates to total realized gold and silver production grades of 39.38 g/t gold (1.15 oz/ton) and 19.52 g/t Ag (0.57 oz/ton) respectively. A previous operator indicated that "approximately 20,000 tonnes or more are readily available at an average grade of 34 grams per tonne gold", or approximately 22,000 ounces of gold (B.C. Geological Survey Information Circular 1994-1, page 19). Note that this is an informal approximation and does not represent an historical resource nor a 43-101 compliant current resource and should not be relied upon.
BCGold has entered into a letter agreement with Engineer Mining Corp. (EMC), a private Yukon-based company to acquire 100% ownership in 6 Crown Grants and 1 mineral claim comprising the historic Engineer Mine, subject to regulatory approval. The property is situated 32 kilometres west of Atlin, B.C. and 140 kilometres south of Whitehorse, Yukon. Access is by helicopter, floatplane or boat from Atlin, or by boat from the village of Tagish, 55 kilometres to the north.
BCGold will be the Operator and will immediately initiate a comprehensive data review, re-log available drill core, de-water mine workings, conduct surface and underground mapping and sampling, initiate structural and alteration studies and model the deposit. A $500,000 exploration program in 2007 is envisaged. The Engineer acquisition represents a perfect fit for BCGold says Brian P. Fowler, P.Geo., Vice President. BCGold applies modern-day exploration concepts and approaches to yesterday’s mines to achieve new discoveries. The exploration upside for additional high-grade and bulk-tonnage low grade gold mineralization at Engineer is excellent.
The main period of mining and development at Engineer Mine was from 1925 to 1927 by Engineer Gold Mines of New York. Underground mining consisted of about 5,500 metres of drifts, shafts, raises and stopes on eight levels. The presence of visible gold was the primary method of identifying and following ore shoots in the veins. To service the Engineer Mine, a small village was built beside Tagish Lake housing up to 140 employees. Reserves were exhausted by 1927 but development continued with drifting and limited mining on the 6, 7 and 8 levels until 1933.
Quartz veining and gold mineralization occurs in two modes at Engineer Mine and is directly related to two main shear zones. Both shear zones form distinct regional-scale lineaments trending sub-parallel at 145 degrees and 160 degrees. High grade gold and silver mineralization occurs in several narrow, less than 2 metre wide tensional and vertical, northeast-southwest striking quartz-calcite veins hosted in well bedded sediments of the Lower Jurassic Laberge Group. Veins pinch and swell along strike and display good vertical continuity.
Lower grade gold mineralization is known to occur within the two broad shear zones and subordinate structures, as well as in two densely veined / stockworked quartz hubs that appear to represent intersection points with secondary north-south structures. The latter offers excellent potential for lower grade, bulk-tonnage gold mineralization.
Gold and silver mineralization at Engineer has been characterized as transitional epi-mesothermal (B.C. Ministry of Energy and Mines Bulletin 105). Gold grades are very sporadic ranging from trace to 50 grams per tonne gold. Native gold is the principle metallic mineral and occurs in pockets associated with roscoelite, a dark green to black micaceous alumino-silicate. Minor pyrite, tetrahedrite, chalcopyrite, antimony, berthierite, allemontite and tellurides are also reported. Ore grade vein material displays vuggy and drusy quartz crystals and abundant cockscomb and collofrom textures in successive layers of quartz and calcite coating country rock fragments and vein material. Engineer Mine is also noted for museum class gold and electrum specimens and is a Dana locality for allemontite (stibarsen and native arsenic).
Under the terms of the option, BCGold will acquire a 51% interest by paying an aggregate of $250,000 and issuing an aggregate of 375,000 common shares and 325,000 share purchase warrants to EMC in the first two years. BCGold will then acquire:
- an additional 9% interest by issuing $150,000 in common shares of BCGold and 75,000 share purchase warrants to EMC in the third year;
- an additional 15% interest by paying $200,000 (or issuing $200,000 in common shares of BCGold, at BCGold’s option) and 100,000 share purchase warrants to EMC in the fourth year; and
- an additional 25% interest by paying $400,000 (or issuing $400,000 in common shares of BCGold, at BCGold’s option) and 100,000 share purchase warrants to EMC in the fifth year.
All payments and issuances may be accelerated at BCGold’s option.
The issue price per common share in the third through fifth years will be determined by taking the weighted average closing price of the common shares of BCGold for the twenty consecutive trading days immediately prior to the date of issuance.
Each share purchase warrant will be exercisable to purchase one common share of BCGold for two years following the date of issuance at a price per common share to be determined by taking the weighted average closing price of the common shares of BCGold for the twenty consecutive trading days immediately prior to the date of issuance plus 25%.
BCGold will be entitled to permit EMC to inspect and mine selected ore-shoots within the property following de-watering of the property on terms to be negotiated in good faith between the parties, on the basis that EMC will reimburse BCGold for the costs of the de-watering and will pay BCGold a 12.5% gross return royalty from any ore production.
EMC currently holds an 80% interest in the property, with the remaining 20% interest being held by Winslow Gold Corp. ("Winslow"). EMC has agreed to use its commercially reasonable best efforts to acquire as soon as possible from Winslow the remaining 20% interest in the property. The agreement between BCGold and EMC will terminate effective June 30, 2007 in the event EMC has not acquired such interest.
The technical information contained in this release was compiled by R. Allan Doherty, P.Geo. of Aurum Geological Consultants Inc. Mr. Doherty is a Qualified Person as defined under National Instrument 43-101. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.
BCGold Corp. is a new resource-based junior mineral exploration company that believes British Columbia and Yukon hold the most promise for the discovery of significant new precious and base metal deposits, particularly in under-explored historic mining and exploration districts. BCGold acquires and advances conceptual, early and mid-stage, quality exploration opportunities towards resource development, utilizing internal expertise and by joint venture with preferred partners to minimize share dilution and exploration risk.
About BCGold Corp.
BCGold Corp. (TSX-V: BCG) is a Vancouver-based junior resource company focused on copper and gold exploration in under-explored historic and emerging mining districts in British Columbia and Yukon. BCGold Corp. acquires and develops conceptual, early and mid-stage, exploration opportunities and advances them towards resource development by using internal expertise, engaging preferred joint venture partners, and creating strategic alliances with major exploration and mining companies. Currently, institutional investors hold 29% of the Company’s outstanding shares and Kinross Gold Corporation holds 11%.
On behalf of the Board of Directors,
Brian P. Fowler, P. Geo.
President and Chief Executive Officer
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.
Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to future expenditures and exploration, development and production activities. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the timing of future payments, expenditures and unit issuances and the timing and success of future exploration, development and production activities.
For further information, please contact:
Sacha C. Fernandes
Manager, Investor Relations
Tel. (604) 646-1581
Freeman Smith, P. Geo
VP of Corporate Development
Tel. (604) 646-1583