Key Gold Holding Inc. (TSX VENTURE: KGH) ("Key Gold") is pleased to
announce that the TSX Venture Exchange has accepted the previously
announced acquisition of the Souart Gold property (the "Property"
or "Souart Gold Property") from arm's length vendors (see news
release of December 9, 2010).
Key Gold has now completed the acquisition of the Souart Gold
Property. Key Gold has paid $40,000, issued 1,030,000 common shares
and undertook to complete $750,000 in exploration work within the
next 12 months. If Key Gold elects to retain the property, it will
be required to pay an additional $450,000 and issue another
4,470,000 common shares over the next three years and to complete
an additional $1,000,000 in exploration over the next two
years.
A finder's fee of 500,000 common shares of Key Gold will be paid
to Ansacha Capital Inc. on this transaction.
The Souart Gold Property
The Property is located in the northwest of the Province of
Quebec, 100 kilometers east of the Town of Lebel-sur-Quevillon and
180 kilometers Southwest of Chibougamau, Province of Quebec.
The region has a skilled workforce, access roads with
infrastructures including water and electricity. Topographic relief
is low and generally does not exceed 15 meters, typical of the
glaciated Canadian Shield. The Property is in the vicinity of the
Barry Lake Gold camp of West Central Quebec where the Barry Deposit
(269,000 tonnes at 4.10 g/t Au of Indicated resources and 450,000
tonnes at 4.68 g/t Au of Inferred Resources) and the Lac Rouleau
Deposit (544,000 tons at 7.2 g/t Au) are located as well. The
resource estimates for the Barry Deposit are compliant with NI
43-101. For the Lac Rouleau Deposit, these resource estimates are
of historical nature and do not comply with NI 43-101.
Gold mineralization in the area was discovered nearby at Rouleau
Lake in the 1930's. On the Souart Gold Property, gold was first
observed by a prospector called Marston Wright in 1945. In 1949,
Roybar Uranium & Gold Mines Ltd. completed 30 diamond drill
holes. In 1950, Nubar Mines Ltd. developed a 44 meters deep shaft
and drove 135 meters of drifts and crosscuts. Several exploration
surveys were then completed by other companies (Glenelm Developers,
Goldmaster Mines, Shell Canada, Tut Explorations, SDBJ and Oasis
Resources). Between 1985 and 1990, Oasis Resources Inc. completed
152 DDHs followed with a resource calculation of 564,000 tons at
6.2 g/t Au. These resource estimates are of historical nature and
do not comply with NI 43- 101.
No mineral resource was calculated on the Souart property
recently.
The Property is 100% owned by Key Gold and it consists of 56
mining claims covering approximately 876 hectares and is in good
standing as of the date hereof.
In February of 2011, Geologica Groupe-Conseil Inc. ("Geologica")
were commissioned to author a technical compilation and review
report (the "Report") on the Souart Gold Property. The purpose of
the report is to present an independent Property review technical
report summarizing previous work, reviewing the exploration
potential of the Property and making recommendations towards future
work on the Property. On April 3 and 4, 2011 Daniel Gaudreault, P.
Eng., conducted a site visit of the Souart Gold Property. The
research, site visit, and data compilation programs conducted with
respect to this Report, have lead Geologica to the conclusion that
the Souart Gold Property represents a solid gold and base metal
exploration target which warrants a systematic and phased series of
mineral exploration programs to adequately appraise the project's
economic potential.
Geologica believes that the mineralized zones on the Souart Gold
Property of Key Gold Holding offer the potential to increase the
resources on the lateral and depth extensions. Outside and along
strike of the "Main Structure" (along with the East, Central and
West Zones), the location most amiable for gold mineralization on
the property is the NE-SW trending magnetic anomalies and reverse
faults.
The NE-SW contact separating two lithological (volcanosediments
and altered sediments) units of contrasting magnetic
susceptibilities remains highly favourable along trend. Gold
occurrences are frequently associated with
quartz-carbonate-tourmaline subvertical and related subhorizontal
conjugate and subsidiary structures. Gold deposits and occurrences
in the area are also associated with faults to the north and east
of the property. These include Rouleau and Kent Lakes as well as
the Windfall Faults.
Following results of past exploration works, several important
elements can be elaborated:
-- The presence of several auriferous zones was recognized over 1,200
meters lateral extension and more than 300 meters deep, within sericitic
schists of (deformed amphibolitized sediments);
-- The presence of an hydrothermal auriferous context, where gold is
associated with stockworks and sulphides (pyrite and locally
chalcopyrite);
-- The gold is mainly coarse and concentrated in conformity with the
schistosity. This assemblage is probably responsible for high grade
values and poor sample representativity;
-- At this stage of exploration and with previous observations, the non-
compliant resources are 564,000 tons at 6.2 g/t Au on the Souart Gold
Property of Key Gold.
To validate previous exploration efforts, a first phase program
of $346,500 will consist of geoscientific compilation followed by
verification and validation drilling with chosen twin diamond drill
holes. If warranted, during Phase II a 10,000 metre drill program
is planned in conjunction with the construction of a geological
model and the calculation of a resource estimate. Both phases I and
II are valued at $2,829,750. The exploration programs are designed
to locate claim boundaries, the historical drill collars and to
test the Souart Gold Property's precious and base metal mineral
potential. These results will guide Key Gold's subsequent mineral
exploration programs on the Property.
This release was approved by Rick Bonner, B. Sc., P. Geo., a
director of the Corporation, who is a Qualified Person under
National Instrument 43-101.
About Key Gold Holding Inc.
Key Gold Holding Inc. is a mineral exploration company that is
mainly focused on the acquisition, exploration and development of
gold and copper properties.
Forward looking Statement
This document contains certain forward looking statements which
involve known and unknown risks, delays, and uncertainties not
under the corporation's control which may cause actual results,
performance or achievements of the corporation to be materially
different from the results, performance or expectation implied by
these forward looking statements.
Shares outstanding: 25,781,719
Neither 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.
Contacts: Key Gold Holding Inc. Louis Lessard President (418)
781-0272 (418) 650-4922 (FAX) info@keygoldholding.com
www.keygoldholding.com Ansacha Capital Inc. Jean-Francois Lemay
(514) 214-8388
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