Golden Dory Resources says it is increasing its stake in the Gabbro Lake iron ore deposit in Canada's Labrador Trough.
The primarily gold-focused company with projects in Newfoundland and Nevada, said it is upping its stake in Gabbro Lake to 70% from the 50-50 partnership it currently shares with Metals Creek Resources Corp.
Under the JV agreement, Golden Dory (TSX-V:GDR) can earn a 60% interest in the property by issuing 1.5 million shares to Metals Creek, and an additional 10% by issuing another 2.5 million shares. Golden Dory is a penny stock, trading at 3.5 cents on Friday, with a tiny market cap of $2.7 million. The company would also have to complete certain milestones, including a minimum of 1200m of drilling and completing an NI 43-101 resource estimate by the fourth anniversary of the agreement.
Golden Dory says its deposit is comparable in size and composition to Alderon Iron Ore's Kami deposit also located in the Labrador Trough:
"The defined geophysical signatures at Gabbro Lake are very similar in size and in strength of magnetic signatures with those associated with Alderon’s Kami project which hosts NI 43-101 compliant resources of 490 Mt @ 30% Fe indicated, and 598 Mt @ 30.3% Fe inferred (Alderon Iron Ore Corp. website). In terms of overall project size, the Gabbro Lake property is approximately 20% larger than Alderon’s Kami project, consisting of 9275 hectares versus 7625 hectares for Kami."
Read the full news release below:
TSX.V-GDRGANDER, NEWFOUNDLAND – May 16, 2012Golden Dory Resources Corp. ("Golden Dory") is pleased to announce that it has reached an agreement, subject to Venture Exchange approval, with Joint Venture partner Metals Creek Resources Corp. (TSX.V- MEK) whereby Golden Dory can earn up to a 70% interest in the Gabbro Lake Iron Ore property in the prolific Labrador Trough. Currently the project is operated under a 50/50 joint venture between Golden Dory and Metals Creek with Metals Creek as project operator.The Gabbro Lake project is strategically located in the eastern portion of the Labrador Trough, 50 km east of the rail line servicing the Schefferville and Labrador City mining camps and 8 km from an all-weather access road. The project is host to at least four discreet airborne magnetic targets up to 3.8 km in length and locally 500 m in width. Within the Gabbro Lake property, the magnetic data defines the targets as a structurally folded and faulted iron formation and shows a number of areas that may be thickened by the structural complexity. Prior to this joint venture, no one is known to have carried out any previous exploration on these iron formation prospects.So far, four main target areas, Anomalies A to D, have been identified at Gabbro Lake with the most significant highlighted below, of which B & D are the first priority targets:
- Anomaly A – 1.4 km long; surface sampling returning 33.77% Fe2O3 (1 sample);
- Anomaly B – 3.8 km long; surface sampling returning from 46.06% Fe2O3 to 58.36% Fe2O3 (4 samples);
- Anomaly C – 1.2 km long; no surface sampling to date;
- Anomaly D – 1.6 km long; surface sampling returning from 27.98% Fe2O3 to 75.38% Fe2O3 (14 samples)A total of 34 representative grab samples collected by Golden Dory and Metals Creek from outcrop and float returned assays ranging from 11.42% up to 75.38% Fe2O3. Approximately 79% of the samples measured greater than 25% Fe2O3 including 62% of the samples over 40% Fe2O3. The iron formation samples were analyzed for Fe2O3 and other major oxides by XRF Fusion at Activation Laboratories in Ancaster, Ontario. The Company is also completing Davis Tube analytical work on a series of samples which will be reported when they become available.At this early stage, the Gabbro Lake property compares favourably with the advanced Kami Project owned by Alderon Iron Ore Corp., located 100 km to the southwest of Gabbro Lake. The defined geophysical signatures at Gabbro Lake are very similar in size and in strength of magnetic signatures with those associated with Alderon’s Kami project which hosts NI 43-101 compliant resources of 490 Mt @ 30% Fe indicated, and 598 Mt @ 30.3% Fe inferred (Alderon Iron Ore Corp. website). In terms of overall project size, the Gabbro Lake property is approximately 20% larger than Alderon’s Kami project, consisting of 9275 hectares versus 7625 hectares for Kami.A proposed 1,200m Phase 1 diamond drilling program is planned for, immediately following spring breakup which is expected to be late June. Diamond drilling and support services contracts are expected to be awarded shortly. The Company is in its final stages of receiving required exploration approvals while an archeological assessment is currently underway.The JV AgreementUnder the joint venture agreement, subject to TSX Venture approval, Golden Dory will become operator and can earn an initial 60% interest by issuing 1.5 million shares of Golden Dory to Metals Creek and by funding the 2012 Exploration Program which will include a minimum of 1,200 m of diamond drilling. Golden Dory can earn an additional 10% (70% aggregate interest) by issuing an additional 2.5 million shares to Metals Creek and by providing a NI 43-101 compliant resource report by the fourth anniversary of the agreement.Kevin Keats, President and CEO of Golden Dory states; “We are very excited about this opportunity we have in one of the leading Iron Ore districts of the world. The project size, as well as the number and quality of targets compare very favourably with other significant developments in the district including the Kami Project owned by Alderon Iron Ore Corp. The Gabbro Lake project gives Golden Dory an excellent entry point into a proven jurisdiction and we are currently preparing for the first drilling to ever take place on the property.”About Golden DoryGolden Dory Resources Corp. (TSX.V-GDR) has several mineral projects in its portfolio. Gold exploration at the Huxter Lane-Brady Project in Newfoundland & Labrador, Canada; the Long Canyon (Pequop South), and Reef properties in the state of Nevada, USA. The Company is also seeking partners on its earlier stage gold, uranium and high grade base metal properties in Newfoundland, and its lithium/rare metals projects in Ontario. In 2012, the Company is taking over as operator of the Gabbro Lake Joint Venture (up to 70% interest) in the iron-rich Labrador Trough of Newfoundland.This news release has been reviewed and approved by Timothy Froude, P. Geo., a "Qualified Person" under National Instrument 43-101. For further information, please contact Kevin D. Keats, President and CEO of Golden Dory at (709) 256-4201, or Stephanie Fitzgerald at CHF Investor Relations at (416) 868-1079.Neither the 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.Investors are cautioned that trading in the securities of the Company should be considered highly speculative. Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Golden Dory will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Golden Dory which can be viewed at www.sedar.com .
(Not for dissemination in the United States of America)