Santoy Expands Scope of Exploration Efforts in Saskatchewan

Santoy Resources Ltd. (TSX VENTURE:SAN) is pleased to announce that the Company
has entered into an Option Agreement with Golden Band Resources Inc. ("Golden
Band") to earn an operating interest in several of Golden Band's more advanced
gold exploration projects located in the La Ronge Greenstone Belt in northern
Saskatchewan. The Option provides for Santoy to expend a minimum of $ 3 million
prior to December 31, 2008 to earn an eight percent equity interest in the Bingo
and Alimak/Decade gold deposits, and in the RKN gold prospect, or such other
deposits as a management committee shall select. Essentially all of the funds
will be expended on diamond drilling, targeted at on strike and down-dip
expansion of these three high-grade zones, which work will commence immediately.


Rodney Orr, President and CEO of Golden Band says that, "we are particularly
excited about Santoy's participation and their aggressive drilling approach to
add tonnage to several of our best, advanced targets. We consider the
exploration potential of these deposits, all of which are open along strike and
at depth, to be excellent. Santoy's management has a long history of previous
involvement in this gold camp, and we look forward to their technical
contribution. This financial infusion will allow for Golden Band to direct a
higher percentage of its treasury toward development engineering and the
rehabilitation of the Jolu mill in preparation for the start of production. We
are very pleased to have been provided the opportunity to have Santoy conduct
this exploration at a time when Golden Band is undervalued and in what is a very
difficult and volatile capital market. For Golden Band to undertake a
significant equity financing for this level of exploration at this time would be
very dilutive for our shareholders. To not seize the opportunity to not expand
and maximize our projects' potential prior to finalization of a feasibility
study is certainly not in anyone's best interests."


Ron Netolitzky, President of Santoy, said that "the Company simply could not
pass up the opportunity to secure an equity interest in an attractive, near term
to production, high-grade, Canadian gold project, at what we judge to be the
bottom of the gold market. Saskatchewan has long been our most favorite
exploration jurisdiction and even more so since the most recent Provincial
election of a new Conservative Government. We are eager to commence drilling".


Bingo Deposit

Plans call for a minimum of 4,000 metres of drilling at the Bingo deposit, 55 km
south of Golden Band's Jolu mill. Bingo has recently been explored by drilling
using the 1,100 metres of underground decline and two sub-levels emplaced during
the last six months by Golden Band. Bingo is a shear and quartz vein hosted gold
occurrence, typically yielding grades in the order of 10 to 14 g/t over widths
of up to several metres, contained primarily within the dioritic portion of the
Bernaski Bay Pluton.


A December, 2007 Golden Band in-house resource estimation, utilizing a cut-off
of 5 g/t Au, indicates 97,000 tonnes grading 14.11 g/t gold of measured and
indicated, and 136,500 tonnes grading 14.03 g/t gold of inferred resources (the
reader is referred to news releases dated January 8 and July 21, 2008 and Golden
Band's website for more detail). With the 102-hole underground drilling program
totaling 1,135 metres by Golden Band during June and July has now investigated
the deposit over a strike length of 450 metres and to an average depth of 200
metres. A 43-101 compliant resource up-date is in progress. Santoy's drilling,
which will be conducted from surface, will be targeted at expanding this
resource and converting the deeper inferred resources to the indicated category.


Alimak/Decade Mine Area

The second primary target will be the former producing Decade deposit, only 275
m from the Golden Band Jolu mill and 600 metres from the former Jolu mine. A
2,000 to 3,000 metre drill program has been designed to define near-surface
mineralization with near-term development potential.


The Decade area was discovered in 1944 and was to the object of limited
underground mining operations in the 1970s and 1990s. The deepest portion of the
existing development is approximately 50 m below surface. Portions of the zone
were drill tested in the 1990s to about 100 to 150 m below surface. In addition
to small-scale gold production (40 tonnes per day) in the 1970s, ore from Decade
was milled at Jolu in 1990 to 1991.


During the past winter, Golden Band completed 19 drill holes totaling 1,321
metres at Decade to test the shallow portions (now referred to as the Roberts
and North zones) and to explore along strike just north of the former Decade
mine workings (see Golden Band news releases of February 7 and March 11, 2008).
Historical drill hole intercepts of 28.5 g/t Au over 6.9 m downhole (interpreted
true width of 3.0 m) and 39.0 g/t Au over 4.4 m downhole (interpreted true width
of 2.2 m) are reported on Decade mine cross- and longitudinal sections. The
mineralization here is known to host bonanza-style gold grades that are both
complex and exhibit a "nugget effect".


Golden Band is encouraged by initial results from the Roberts zone, by the
potential demonstrated by the extension of the Decade zone, and with the
discovery of the North zone. All indicate possible higher-grade, near-surface
gold resources that could be available for near-term production, some as an open
pit only metres from the Jolu mill, as part of the company's plans to restart
production in 2009 (see news in Stockwatch of Feb. 26, 2008).


The Company's historical files for the area note the existence of the high-grade
Alimak Zone plunging to the west below existing underground workings at the
former Jolu mine. This zone was identified during operations of the former Jolu
Gold Mine as a reserve, and was partially mined from underground. The known
mineralization extends from surface to 125 metres deep and mining records note
underground grab samples of up to one ounce per ton Au. The new proposed
drilling program will include step-out holes to test for the existence of strike
extensions, and along the projected plunge of the Alimak Zone where a previous
property boundary precluded testing in the past.


RKN/Golden Heart Area

The third target area will be the newly discovered, near surface RKN Zone,
adjacent to the Golden Heart gold deposit at Weedy Lake, 75 km northeast of the
Jolu mill along Highway No. 102. During this past winter, two discovery holes
intersected 156.6 g/t Au over 2.74 metres and 5.18 g/t Au over 8.4 metres (refer
to Golden Band news release of June 26, 2008). The RKN Zone's proximity to the
open pittable Golden Heart (measured and indicated resource of 259,900 ounces -
refer to Golden Band website for 43-101 technical report) makes this target
particularly attractive. A minimum of 3,000 metres of shallow drilling will be
undertaken to determine the orientation and continuity of the Zone.


With the expenditure of $3 million, the Company will earn an eight percent
equity interest in the Bingo, Alimak/Decade and RKN properties, and possibly
such other deposits that the Management Committee may select for drilling during
the term of the Option. Upon exercise of the Option, a joint venture is to be
formed. Golden Band has the exclusive right to buy-back all of Santoy's interest
over a sliding scale: after March 31 and prior to June 30, 2009, for $3.5
million; July 1 to December 31, 2009, for $3.75 million; and up to the
announcement of commercial production, for $4.0 million. The initial $3 million
may be repaid, at Golden Band's election, in either cash or shares. If Santoy
still retains its interest after the start of commercial production, it shall
receive 5% of the income from production to a maximum of $3 million, and
thereafter 2.5% of the income from production. If the repayment were in shares,
the share price would be calculated as the volume-weighted average of the 20
trading days prior to the day of the election. A two-kilometre Area of Interest
shall apply exclusively to Santoy during both the Option and the Joint Venture
Agreements.


Santoy will be the initial Operator of the program. Santoy has entered into
drill contracts with Newmac Industries Ltd. for 10,000 metres, and drilling is
expected to commence next week.


As the Company and Golden Band have two common directors, this agreement has
been reviewed and approved by independent Board committees of each company. The
agreement is subject to regulatory approval.


The Qualified Person responsible for review of the technical data in this news
release on behalf of the Company is J. R. Allan, P. Geol.


On Behalf of the Board of Directors

SANTOY RESOURCES LTD.

R. K. Netolitzky, President & CEO

Cautionary Statement on Forward-Looking Information

The statements made in this News Release may contain certain forward-looking
statements. Actual events or results may differ from the Company's expectations.
Certain risk factors may also affect the actual results achieved by the Company.
(TSXV:SAN)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024