Kootenay Gold and the Promintorio Discovery

June 13, 2008 - PRLog -- By James West

Last week, Kootenay Gold (TSX.V:KTN) released the initial results from the Phase 2 drill program now underway at the company’s 100% owned Promintorio project. Hole KP 25-08 assayed 386.64 meters grading 70.8 grams per tonne ("g/t") Ag equivalent and 1.54% combined lead-zinc, including 270.95 meters grading 94.4 g/t and 2.10% combined lead-zinc, and 97.67 meters grading 144 g/t Ag equivalent and 3.24% combined lead-zinc, and also including 7.85 meters grading 473.9 g/t Ag equivalent and 10.13% combined lead-zinc.

Hole KP 23-08 assayed 437.45 meters grading 53 g/t Ag equivalent and 1.16% combined lead-zinc , including189.92 meters grading 88.5 g/t Ag equivalent and 2.00% combined lead-zinc, and also including11.65 meters grading 207.7 g/t Ag equivalent and 4.92% combined lead-zinc.

According to Kootenay Gold President Ken Berry, “The results we’re seeing are even better than the results we released in December, with much longer intersections of higher grades of mineralization. The mineralized zones conform closely with the 3D IP survey signature, which  outlines an anomaly of 1.6 km by 900 m, which is “L” shaped with widths ranging between 250 and 600 metres.”

CEO Jim McDonald agrees. “Its silver 40- 50% value, 25% gold and the rest lead zinc. Comparable deposits include Bear Creek Mining’s (TSX.V:BCM) Corani Project in southeastern Peru, and Goldcorp’s Peñasquito Project in Zacatecas, Mexico. The intercepts we’re seeing have a metal content value of $60 per tonne and up to $150 per tonne.”

To date, the 3D IP chargeability anomaly at Promontorio has proven to be an exceptionally accurate predictive tool for identifying mineralization and drill targeting.

Given the large extent of this anomaly and corresponding alteration at surface the pace of exploration will be stepped up. A second drill rig will be sourced and added to the program to assist in drilling an expanded program in the order of an additional 35,000 meters or approximately 100 holes.  

Also detailed mapping and sampling of the new mineralized zones discussed in the May 14th, 2008 news release is under way. This will be followed by trenching and likely further geophysical surveys, additional targets will be drill-tested where warranted. Kootenay will also initiate a regional exploration program on the 90,000 hectare Promontorio property where a third drill rig will be added to drill test these targets based on results of the preliminary work.

Kootenay is in a strong financial position to underwrite the stepped up exploration. The company has CA$8 million on hand and has just announced an $11 million private placement at $2.20 share.

Phase I drilling at Promontorio consisted of 22-holes which confirmed widespread, high-grade mineralization. Highlights included 18.4 meters grading 950 g/t and 151 meters grading 162 g/t silver-equivalent.

Drilling encountered wide to moderate intervals of high-grade silver-gold polymetallic breccias in a porphyry breccia setting. Results received to date report twenty of the twenty-two holes intersected significant precious and base metal mineralization starting from surface and extending to depth.

These results indicate that the individual Breccias drilled in the first phase are part of a single, large mineralized system with distinct characteristics indicative of a porphyry system. Accordingly, drill data suggests the Promontorio may contain a deposit of a larger scale and scope than previously conceived.

“Less than 10% of the IP-indicated anomaly has now been tested, “ said Jim McDonald. “We will be stepping out on the next set of holes to 100 and 150 metres. So if we encounter strong mineralization as we step out, the value and tonnage of the deposit will increase accordingly.”

While Promintorio remains the company’s flagship project, its joint venture arm continues to attract other junior mining companies.

On May 6th, the 2008 exploration program on the Jumping Josephine (JJ) Gold Project in southeast British Columbia has commenced with diamond drilling and a 40km line kilometer 3D Induced Polarization survey. Line cutting is currently underway to facilitate the geophysics.

The project is a Joint Venture between Kootenay and Astral Mining Corp (TSX.V:AST).

Early in 2008 Astral completed its obligations under the option agreement with to earn a 60% undivided interest in the JJ Gold Project (see April 12, 2006 news release for agreement details). The companies are now completing a formal Joint Venture (JV) agreement and have formed a Management Committee which will direct all future exploration work on the project.

Initial drilling will be focussed on infilling and expanding the auriferous structurally-controlled quartz stockwork zone at JJ Main. Subsequently other gold targets currently defined on the property will be drilled in addition to geochemical targets and targets identified by the 3D IP survey. The drill program is anticipated to comprise up to 10,000m to be carried out in two phases. Further geochemical surveys, geological mapping and trenching will also be carried out as part of the 2008 exploration program.

In March, Kootenay announced the completion of six option agreements with Klondike Silver Corp. (TSXV: KS) on six of Kootenay's 100% owned mineral concessions in the Sierra Madre Region of Northwest Mexico. Kootenay acquired the six properties through mineral concession staking and a payment of 150,000 shares as a finder's fee.

Under the terms of each option agreement, Klondike can earn a 50% undivided interest in the mineral concession by incurring or funding a minimum of US$1,000,000 in exploration expenditures in stages over three years and issuing 500,000 shares to Kootenay in stages over two years. In order for Klondike to earn an undivided interest in all six mineral concessions, Klondike must incur or fund minimum exploration expenditures totaling in the aggregate $6,000,000 (US$1,000,000 on each mineral concession) and issue to Kootenay an aggregate of 3,000,000 shares (500,000 shares per mineral concession). The options are subject to Klondike obtaining regulatory approval.

Kootenay will continue drilling this year on Promintorio as its joint venture partners continue to make progress on the various programs underway on those properties, so there will never be a shortage of news for investors.

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