| ||Vancouver, Canada: Radius Gold Inc. (TSX-V: RDU), is pleased to announce that the Company has been granted an option (the "Option") to acquire a 100% interest in the Nueva California gold property located in north-central Peru. Nueva California is regarded as an early-stage, bulk tonnage gold target and is only partially exposed. The mineralization is believed to be open along strike and down dip.|
To earn the 100% interest, Radius must spend US$3 million in exploration, and make a series of payments to the property owner (a private Peruvian company) totaling US$3 million, over a period of 4 years. In the first year, Radius must make payments of US$150,000 to the owner (of which US$50,000 was paid on signing) and exploration expenditures of US$200,000.
If the Option is exercised, Radius must pay to the owner US$4 per ounce of gold defined in the reserve category as determined by a bankable feasibility study, and US$4 per ounce of gold produced during a 6-year period thereafter that is over and above the number of ounces defined in such a study, up to a maximum of 2.5 million ounces, or US$10 million.
Agreement with Focus Ventures
A small underground mine is currently in operation at Nueva California, exploiting a small high-grade resource hosted by a series of en-echelon northwest-southeast trending epithermal gold-silver veins with a reported mine head grade averaging 8 g/t Au and 120 g/t Ag. Although the long term potential of this high grade resource is believed to be limited, management believes that there is potential to develop a low-grade bulk tonnage gold-silver resource within the area of current workings and along strike by exploration. In line with Radius's current strategy of acquiring more advanced stage, near-production gold projects, Radius has agreed to assign the Option to Focus Ventures Ltd. (TSX-V: FCV.H).
Focus will have up to 180 days to conduct due diligence work on the Property, and if it decides to proceed, Focus will assume all of Radius's obligations under the Option, will issue to Radius 1,000,000 common shares in the capital of Focus at a deemed price of $0.20 per share, pay to Radius $50,000 cash, and grant to Radius a 1.5% net smelter return royalty on the Property. Radius and Focus have common directors and officers, and the agreement between the two companies is subject to TSX Venture Exchange approval.
Simon Ridgway comments: "The investment in Focus will give Radius shareholders excellent leverage in future success at Nueva California, and will allow Radius to concentrate its efforts on the search and acquisition of advanced-stage properties, as well as developing its existing gold assets in Central America, in particular its high-grade Tambor deposit in Guatemala and its Nicaraguan gold portfolio."
The Nueva California property (900 hectares) is located in the Cordillera Blanca, north-central Peru, 35 kilometers north of the Pierina Gold Mine, at an altitude of 3,300m a.s.l. The target at Nueva California is a bulk tonnage gold deposit that is only partially exposed due to overburden. The Property has never been drilled, and has excellent potential to define extensions to mineralization by exploration along strike under cover and down dip of the current workings.
Underground sampling by Radius showed significant intercepts of low grade mineralization in adjacent wall rocks including 1.21 g/t Au and 44 g/t Ag over 18 meters, and 0.96 g/t Au and 32 g/t Ag over 28 meters. Strongly silicified quartz stockworks associated with the main mineralizing structures assayed up to 7.05 g/t Au and 152 g/t Ag, and contact zones between the high grade structures and granodiorite wall rocks assayed up to 3.8 g/t Au and 186 g/t Ag over 2 meters.
Assay Protocol & Qualified Person
All sample preparation and analyses were conducted by ALS Chemex Labs in Lima. Samples were analyzed for Au, using a 30 gram pulp with Fire Assay and AAS with gravimetric finish for samples over 10 g/t Au. Silver was analyzed by ICP, with AAS for samples over 100 g/t Ag. The scientific and technical information in this release was prepared under the supervision of Mr. David Cass, Radius's Vice-President of Exploration, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and a "Qualified Person" in accordance with National Instrument 43-101.
Radius Gold is in the business of discovering and developing gold deposits, and holds a portfolio of advanced exploration properties in Nicaragua, Guatemala and Peru. In June 2008 the Company signed a production agreement with Kappes Cassiday & Associates to develop Radius's Tambor Mine in Guatemala. When Tambor is in production, Radius will receive 49% of cash flows generated by the Mine. The Company's strategy is to build value for shareholders by the acquisition and development of advanced stage properties.
For further information on Radius Gold Inc., please call toll free 1-888-627-9378 or visit our web site (www.radiusgold.com).
ON BEHALF OF THE BOARD
Simon Ridgway, President
Investor relations: Erin Ostrom
Symbol: TSXV-RDU; OTCBB-RDUFF
Shares Issued: 53.5-million
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release
You can view the Next News Releases item: Mon Apr 20, 2009, Drilling commences at the Rubi Gold-Silver Project, Peru
You can view the Previous News Releases item: Mon Jan 26, 2009, Radius Provides Update & Announcement of New Director
You can return to the main News Releases page, or press the Back button on your browser.