February 22, 2011, Vancouver, BC -- Heatherdale Resources Ltd. ("Heatherdale" or the "Company") (TSXV:HTR) announces that it has acquired a 60% interest, with the option to acquire 100%, in the Delta volcanogenic massive sulphide (VMS) project, located in east-central Alaska about 19 miles (30 km) from the Alaska Highway.
Delta is an advanced-stage exploration project that provides Heatherdale with a longer-term development opportunity to complement the Company's primary asset -- the Niblack advanced-stage copper-gold-zinc-silver project on Prince of Wales Island. The 39,840-acre Delta property covers a largely under-explored VMS district with strong potential for expansion of known resources and the discovery of new deposits.
"Our exploration program at Niblack has proceeded with efficiency and a great deal of success over the past 18 months, to the degree that we are rapidly moving toward a project development phase," said Heatherdale President & CEO Patrick Smith. "With the addition of another Alaska VMS project at Delta, we can take advantage of the technical knowledge and insights of our geological team, as well as our growing corporate presence in Alaska, to move two similarly promising projects at different points in the development curve forward in a timely and efficient way, thereby securing both short-term and long-term value for shareholders."
Heatherdale is acquiring Hunter Dickinson Acquisitions Inc. ("HDAI"), a non-arm's length private company that holds a 60% interest, with the option to acquire 100%, in the Delta Project under a Limited Liability Company Agreement ("Delta LLC agreement") with Grayd Resource Corporation dated October 2010. In terms of the HDAI purchase agreement and the underlying Delta LLC agreement, in addition to assuming some acquisition costs, Heatherdale will be required to make the following payments and incur exploration expenditure as below:
- Issue 2,000,000 common shares to the shareholders of HDAI on closing;
- To retain its 60% interest, Heatherdale must expend at least US $1,000,000 on or before January 1, 2012 ($400,000 spent to date) and an additional amount of at least US $2,000,000 on or before January 1, 2013 (the "Initial Contribution");
- Issue 2,000,000 common shares to the shareholders of HDAI on completion of its Initial Contribution;
- If Heatherdale does not complete its Initial Contribution, it shall be deemed to have withdrawn from the joint venture, returning its 60% ownership interest; no further payments will be due to the HDAI shareholders;
- Upon completion of its Initial Contribution, Heatherdale shall have an additional earn-in option to increase its ownership interest in the Delta Project to 80% by funding additional expenditures of US $4,000,000 on or before January 1, 2014 (the "First Option");
- Issue $2,000,000 worth of common shares based on the 10-day volume weighted average price before date of issue, to the HDAI shareholders, upon exercise of the First Option;
- Within 90 days of exercising the First Option, Heatherdale shall have the option to increase its ownership interest in the project to 100% by providing, at Heatherdale's election, either two million shares or shares with a market value of US$ 4,000,000 (the "Second Option");
- Issue $2,000,000 worth of common shares based on the 10-day volume weighted average price before date of issue, to the HDAI shareholders, upon exercise of the Second Option.
The Delta project acquisition is subject to regulatory approval, including approval of the TSX Venture Exchange.
Delta lies within a regionally extensive package of Devonian to Mississippian age metasedimentary and metavolcanic rocks referred to as the Yukon-Tanana Terrane, which occurs in east-central Alaska and extends in an ESE trending arc across Yukon into northern British Columbia. Several clusters of VMS mineral occurrences are known in the Alaska portion of the terrane. Massive sulphides occur on the Delta property in three southeast to northwesterly trending horizons: the Upper Lagoon Series with a strike length of approximately 9.5 miles (15 km); the Lower Lagoon Series with a similar extent; and more localized occurrences in Drum Series rocks. A 12.5 mile (20 km) long, thrust-fault repeated section of the Lagoon Series also hosts sulphide mineralization.
Since an initial discovery was made at Delta in 1976, exploration work by a number of operators has investigated more than 40 occurrences of massive sulphide mineralization. The Delta property is a district-scale land position comprised of 249 Alaska State mining claims. To 2007, 141 widely spaced holes totaling some 75,000 feet (23,000 m) have been drilled. Initial resource estimates have been prepared for seven of these occurrences based on early-stage exploration drilling. Inferred mineral resources for all zones are estimated to be 15.4 million tonnes grading 0.60% Cu, 1.7% Pb, 3.8% Zn, 62 g/t Ag, and 1.7 g/t Au1 . Several of these zones remain open to expansion both laterally and vertically. Numerous additional exploration targets remain untested or only partially tested. Additionally, there are several areas from which mineralized surface grab samples have returned very high precious metal grades.
HDAI completed an airborne Versatile Time Domain Electro-Magnetics (VTEM) geophysical survey over the entire Delta district in 2010. Several exciting new targets were identified for follow-up. The Heatherdale technical team is in the process of reviewing all available data with the objective of identifying specific targets for drill testing in the near term.
As at Niblack, the VMS mineralization at Delta is polymetallic in nature and enriched with precious metals. Smith confirmed that the potential to add value by building upon the known resources and by discovering new zones of mineralization in the Delta district heightened Heatherdale's interest in the property.
"Delta is an early-stage project, but it also represents an emerging massive sulphide district with the potential to be in the top tier of global districts of its type," Smith said. "As we continue to focus on our core asset at Niblack to unlock the value of that resource by aggressively advancing the project into mine planning, exploration at Delta presents an opportunity to provide future growth for the company and to leverage the skills and expertise of our team, our knowledge and experience in Alaska, and the depth and resourcefulness of Hunter Dickinson Inc."
The Delta property covers an area of moderate to steep relief in east-central Alaska. The wide valley of the Robertson River parallels the north end of the claim block, where there is an airstrip suitable for aircraft up to Skyvan class (3,000 lb capacity). Commercial lodging with helicopter landing space is available 11 miles (18 km) away at Cathedral Rapids and 36 miles (58 km) east, in the community of Tok, at the confluence of the Alaska Highway and Glenn Highway, both of which are paved and maintained year round. The City of Fairbanks is located approximately 205 miles (330 km) to the northwest of Tok along the Alaska Highway. The City of Anchorage is located 323 miles (520 km) to the southwest along the Glenn Highway. Both cities are significant commercial and mining service centers. Operating mines in the vicinity of the Delta Project include the Pogo gold mine (Sumitomo) and the Fort Knox gold mine (Kinross), about 85 miles (135 km) and 160 miles (255 km) northwest, respectively.
Samuel S. Dashevsky, CPG, and Carl F. Schaefer, CPG, of Northern Associates, Inc., who are qualified persons independent of Heatherdale, estimated the mineral resources for the Delta Project and reviewed the technical information on the Delta project in this release.
Since October 2009, Heatherdale has completed more than 90,000 feet (27,400 m) of underground drilling at its flagship Niblack VMS Project in southeast Alaska. Deposit modeling is currently being finalized based upon this recent drilling and an updated mineral resource estimate will be completed soon. A substantial drilling program is currently underway at Niblack with two core rigs operating underground, focused on continued expansion of the high-grade Lookout zone as well as initial testing of other compelling targets. The 2011 program is designed to establish the mineral resources necessary to advance the project to a prefeasibility stage.
Niblack's location at tidewater on Prince of Wales Island in southeast Alaska presents a number of project benefits, including year-round marine access, a well-trained labour force, a mature supply and service sector, proximity to Asian markets, and the support of community and Alaska Native corporation partners. The project is located 27 miles (44 km) from Ketchikan, a community of 8,000 people with important services to support project development, including a deep water port and international airport. The State's burgeoning minerals industry also enjoys a competitive tax regime and stable, predictable permitting and regulatory oversight coordinated by the Alaska Department of Natural Resources', Large Mine Permitting Team. For reference, Hecla's Greens Creek, a 2,100-ton per day underground massive sulphide mine, operates 225 miles (370 km) to the northwest of Niblack on Admiralty Island.
About Heatherdale Resources Ltd.
Heatherdale Resources Ltd. is a growth company focused on the exploration and development of precious and base metal properties with a focus on Alaska. The Company holds a 51% interest in the Niblack Project, with an option to acquire up to a 70% interest from Niblack Mineral Development Inc. by investing an additional US$10 million and completing a bankable feasibility study. Heatherdale has also acquired the right to earn a 100% interest in the Delta Project to supplement its exploration and development pipeline.
Hunter Dickinson Inc. (HDI) is a diversified, global mining company with a 25-year history of mineral development success. From its head office in Vancouver, Canada, HDI applies its unique strengths and capabilities to acquire, develop, operate and monetize mineral properties that provide consistently superior returns to shareholders.
For further details on Heatherdale Resources Ltd., please visit www.heatherdaleresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.
On behalf of the Board of Directors
President & CEO