June 02, 2010 12:03 ET
MDN Acquires a Gold Exploration Project in Quebec
MONTREAL, QUEBEC–(Marketwire – June 2, 2010) – MDN Inc. (“MDN”)(TSX:MDN) is pleased to announce that it has entered into an agreement with SOQUEM Inc. for the MCGold project in Chibougamau also known as MOP II . The agreement grants MDN the option to acquire a 50% interest in the project in consideration of a payment schedule and exploration expenses of up to $5.25 million over five years. Work commitments are $350,000 for the first year and $500,000 for the second year. MDN will become the operator once the project reaches the feasibility study stage.
“This advanced exploration project with a 43-101 resource is a good fit with our strategy of acquiring and developing gold resources with potential for increased tonnage and grade. Our goal is to define a resource with a potential gold content of over one million ounces,” stated Serge Bureau, President and Chief Executive Officer of MDN.
In 2006, SOQUEM retained Scott Wilson Roscoe Postle Associates Inc. to carry out a 43-101-compliant estimate of the inferred mineral resource. The estimate was calculated at a gold price of US $500/ounce and a cut-off grade of 1.0 g/t Au.
|Inferred Category||Tonnes||Au g/t||Ounces Au||Cu %|
“We feel that this project has potential for porphyry-type Au-Cu deposits, which means that it should be developed based on a high-tonnage/low-grade deposit model, where cut-off grade selection is important. With this type of deposit and a gold price currently above US $1,000 per ounce compared to the US $500 per ounce used for the 2006 estimate, the cut-off grade chosen will have a huge impact on tonnage,” noted Marc Boisvert, Vice President, Exploration of MDN.
Since 1957, a number of drilling programs have been carried out by various companies, for an approximate total of 36,000 metres of surface drilling, 1,400 metres of underground drilling and 1,000 metres of underground development. The previous work aimed mostly at exploring for high-grade vein occurrences, not for disseminated-type mineralization. Metallurgical testing by SGS Lakefield Research Ltd. in 2005 returned positive results, showing 85% to 95% gold recovery.
Prior to SOQUEM’s involvement, only 48% of the drill cores were sampled (13,537 m of the 27,924 m drilled), being only the sections with a high sulphide content. In 2000, SOQUEM located the core from six earlier holes that had intersected the mineralized zone, and was thus able to sample the totality of the mineralization, including sections with low sulphide content. Three of the six holes returned average grades that were higher than the previous results.
The deposit mineralization is associated with a large envelope of disseminated pyrite in the order of 200 m wide by 800 m long, and remains open at depth and along strike. The gold mineralization is hosted in a quartz-feldspath porphyry intrusive, and also occurs in the rocks immediately adjacent to the intrusive.
Marc Boisvert, geological engineer, Vice President, Exploration, and a qualified person under National Instrument 43-101 has reviewed the technical and scientific information in this news release.
SOQUEM Inc. is a wholly owned subsidiary of the Société générale de financement du Québec (“SGF”). The mission of the SGF, an industrial and financial holding company, is to undertake economic development projects in the industrial sector in cooperation with partners and in compliance with the economic development policies of the Government of Quebec.
MDN Inc.(TSX:MDN) is a mining exploration and development company with adequate financial resources to develop its exploration projects in Québec and Tanzania. MDN also remains active in the search for new business opportunities that can increase shareholder value. In addition to its 30% participating interest in the Tulawaka gold mine, MDN is the operator and owner of a majority interest in mineral licenses totalling 715 km2 in the vicinity of the Tulawaka mine. MDN Inc. also owns a 67.5% interest in Crevier Minerals Inc. which owns a NI 43-101 niobium-tantalum resource in the Lac-Saint-Jean area of Québec. MDN has an option to increase its equity participation in Crevier Minerals Inc. to a maximum of 87.5%. Additional information is available on MDN’s website at www.niobaymetals.com.
Forward-Looking Statements All statements in this release, other than statements of historical fact, that address events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements are discussed in greater detail in the Company’s most recent Annual Information Form filed on SEDAR, which also provides additional general assumptions in connection with these statements. Investors and others who base themselves on the Company’s forward-looking statements should carefully consider the factors mentioned in the Annual Information Form as well as the uncertainties they represent and the risk they entail. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.
- Serge Bureau, Ing.
President and Chief Executive Officer
514-866-6500, Ext. 221
Marc Boisvert, Ing.
Vice President, Exploration
514-866-6500, Ext. 227
Nicole Blanchard, Investor Relations
Sun International Communications