PINNACLE OPTIONS KANSAS PROPERTY FROM TENAJON RESOURCES CORP.
Pinnacle Mines Ltd. reports that it has entered into an agreement with Tenajon Resources Corp. whereby Pinnacle can earn up to a 60% interest of Tenajon’s 100% owned Kansas property by spending $1.0 million on exploration and development over a 4 year period, making a cash payment of $50,000 on signing and issuing, subject to regulatory approval, 77,000 common shares of Pinnacle. In addition, Pinnacle has the right to earn an additional 10% in Kansas by bringing it through a positive feasibility study within 4 years of earning its 60% interest.
The Kansas property is a crown grant claim, 19.5 hectares in size, and is surrounded by the Silver Coin project, where Pinnacle is earning up to a 60% interest from Mountain Boy Minerals Ltd. as announced on August 4, 2004. Pursuant to an option agreement dated July 29, 2004 wherein an area of mutual interest is set out between Pinnacle and Mountain Boy, Mountain Boy will be participating in the option of Kansas and is entitled to a 49% interest therein. If Pinnacle elects to put Kansas or any adjoining property into production, Mountain Boy would be reduced to owning 40% of Pinnacle’s interest. Recent exploration at the Silver Coin has identified several new gold zones and drilling is ongoing.
A technical report completed by Westmin in 1995 calculated the uncut gold reserves at the KWK Zone located within the Kansas property to be 1,774,000 tonnes grading 2.20 g/t (124,889 ounces of gold). This calculation was completed prior to National Instrument 43-101, is historic in nature and has not been reclassified to current categories, however management believes the results and calculations were generated using accepted and proven geologic and engineering practices and are reliable and relevant. The calculation must be considered a mineral resource estimate.
Limited drilling along strike, outside of the zone used to estimate the resource, has encountered favourable results and, according to Westmin's report, the KWK Zone is open to the north and to the south with substantial room to expand resources. This resource was estimated over a 295 m strike length of the KWK zone using a Medsystem block model. A total of 62 drill holes totaling 3507 metres, and chip and muck sampling of 168 metres of development drifting were used to estimate the resource.
As part of the 1995 program, three bulk samples, each of 1000 to 2000 tonnes, were processed through Boliden Westmin's Premier Gold Mill. Sampling indicated that diamond drill core produces lower estimated grades than chip and/or muck sampling, which in turn produce lower estimated grades than bulk sampling of development muck by milling. In each case milled grades were in excess of the uncut grades estimated by production sampling by 17 to 22%. Further work is required to upgrade the confidence of the above trends in grade estimates before these trends can be used with certainty in evaluating the economics of underground bulk mining the Kansas/West Kansas Zones.
Pinnacle Mines Ltd. is a Canadian based mineral exploration and development company whose activities are international in scope. Its primary assets are located in both Canada and China. In Canada, Pinnacle holds several properties in Northwestern British Columbia, in proximity to numerous past and producing mines including Barrick Gold’s famed Eskay Creek Mine. In China, Pinnacle’s current focus is in Southeast Yunnan, an area being increasingly considered for its potential to host significant mineral resources including “Carlin” style gold deposits.
On behalf of the Board of Directors
“Andrew W. Bowering”
President and CEO
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