Newcastle Resources Ltd. (OTCBB: NCSLF) (“Newcastle”) is pleased to announce that it has signed a Letter of Intent with Premier Gold Mines Limited (“Premier”) to option its 100% interest in ten patented mining claims, the Lennie Property, located immediately northeast of the world class Red Lake Gold Mines complex.
Lennie Property
The Lennie Property is strategically located northeast of the Red Lake Gold Mines complex along the same geological contact that hosts the major gold mines in Red Lake. It covers the important unconformity between the ore-hosting Balmer volcanic rocks and the overlying sedimentary rocks. Folded ultramafic rocks and conjugate fault structures will be the focus of an exploration program that will begin immediately on the property, including diamond drilling.
The last exploration to occur on the Lennie property was a small, shallow drill program in 1996. That program intersected faults containing mineralized quartz-carbonate veins in Balmer rocks. It is anticipated that deep drilling will begin in the spring to test these potential faults as well as other targets.
For this option, Premier has agreed to pay $400,000 in cash payments over three years and 160,000 shares of Premier, including $100,000 and 40,000 shares on signing of a formal option agreement. A 3.0% Net Smelter Return royalty ("NSR") is payable to Newcastle, of which one-third (1% NSR) can be purchased at any time for the sum of $1,000,000. In addition, Premier has committed to incur a minimum of $750,000 of exploration expenditures over the three year option term, including $250,000 in the first year.
Completion of the option is subject to Premier performing and being satisfied with its due diligence review of the Lennie Property and Newcastle and Premier negotiating and executing a mutually acceptable option agreement for the Lennie Property.
Contacts:
Newcastle Resources Ltd.
Brent Petterson, CFO, 604-684-4312
Fax:
604-608-4740