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19 August 2011

Matamec options La Grande Est property from Virginia Gold Mines and completes $100,000 financing

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Matamec options La Grande Est property from Virginia Gold Mines and completes $100,000 financing

Matamec Explorations Inc. ("Matamec") announces that it has concluded an option agreement with Virginia Gold Mines Inc. ("Virginia") by which it can acquire a 50% interest in the La Grande Est Property. Located north of Sakami Lake in the James Bay area, this property is approximately 16 kilometres long and covers 6,142 hectares. The property straddles the Sakami fault which includes the volcanites of the geological sub-province of La Grande ("La Grande") in the northern section and the sediments of the Opinaca sub-province ("Opinaca") in the southern part. To acquire a 50% interest in the La Grande Est Property, Matamec has to commit $600,000 in exploration work over three years, $100,000 in the first year, $225,000 in the second year and $275,000 in the third year. The agreement also includes cash payments totalling $50,000 of which $10,000 will be paid at closing, $15,000 on October 31, 2006 and $25,000 on October 31, 2007. The northern part of the property is subject to a 1% NSR royalty in favour of a third party, half of which can be repurchased for $500,000. Matamec will be the operator of the exploration work during the option period and Virginia thereafter. Previous exploration work on the La Grande Est Property was conducted mainly on the La Grande volcanites near the contact with the Opinaca sediments where gold anomalous values were obtained. However, two thirds of the property is characterized by the presence of the Opinaca sediments. Several intrusions were located, among which an intrusion identified as a diorite by Virginia’s geologists. Furthermore, various stream anomalies were not verified. Considering the Éléonore discovery and the new exploration perspectives brought about by this discovery, Matamec’s objective is to increase its exploration efforts in the Opinaca sediments. During this first phase, exploration work will include prospecting, trenching, mapping and sampling. The La Grande Est Property is situated in continuity with the La Grande Sud Property, also held by Virginia, where resources of 4.2 Mt. grading 2.1 g/t Au were calculated in Zones 32 and 103 in volcanites bordering a tonalitic intrusion (Press release: March 11, 1999). Approximately 10 kilometres southwest of the La Grande Sud Property, Matamec holds the Sakami Property which also covers the La Grande volcanites and the Opinaca sediments. Values of up to 13 g/t Au over 7.35 metres were obtained in Zone 26 in the La Grande volcanites and values of 2.6 g/t Au over 54 metres in Zone 25 of the Opinaca sediments (Technical report: December 23, 2002). The Sakami Property is 35 kilometres long of which only 10 kilometres in the southern section was previously drilled, mainly in the volcanites. proceeds of this financing (7.2%) will be allocated to Matamec’s working capital while the remaining portion (92.8%) will be allocated to an exploration expenditures on the La Grande Est Property. Under the terms of the placement, Matamec issued 1,000,000 common shares at a price of $ 0.10 per share. Of this total, 928,000 shares represent flowthrough shares for which the proceeds will be committed to CEE (Canadian Exploration Expenses) before December 31, 2006. In addition, 1,000,000 warrants were issued, giving the owner the right to purchase one additional share of the Company at $0.13 per share until December 31, 2007. All the common shares and warrants issued are subject to a four-month hold period from the closing.
Matamec is a mining exploration Company which has a polymineral exploration strategy. Besides this option with Virginia, Matamec wholly owns 6 other properties in Quebec. Exploration work is currently in progress on the Lesperance and Vulcain Properties.
All amounts expressed in this Press Release are in Canadian dollars ($CA).