PINNACLE TO ACQUIRE PROPERTIES IN OAXACA STATE, MEXICO
Pinnacle Mines Ltd. is pleased to announce that it has reached an agreement with Chesapeake Gold Corp. (TSX.V-CKG) to purchase up to a 70% interest in its wholly-owned La Calavera and Rio Minas copper-silver-gold properties in Oaxaca, Mexico. Both the La Calavera and Rio Minas properties occur within a hundred kilometer long NW trending structural belt which host several skarn prospects and other advanced exploration projects. Regional reconnaissance has delineated an extensive zone of intrusions along this belt that have affected the limestone rocks generating numerous skarn occurrences over an area of more than 100 square kilometers around Rio Minas. At Rio Minas, the skarn zones are associated with a large circular feature about 5 kilometers in diameter and are believed to represent the surface expression of a major intrusive stock underlying the calcareous rocks.
Five major zones have been identified within a 6 kilometer long NE trending corridor associated with a regional fault system that coincides with the eastern portion of this circular feature. To date, Chesapeake has undertaken a detailed mapping and sampling program on one zone, La Zapoteca. The mineralization at La Zapoteca occurs as a copper-silver green garnet exoskarn surrounded by a broad alteration envelope that ranges outwards from strongly silicified lime stones to marbles. Continuous rock channel samples taken across a 400 meter long, 100 meter wide outcrop exposure in the main zone have returned several impressive results including 63m of 0.90% copper and 75 g/t silver. See Chesapeake’s news release dated July 6, 2006 for more detailed results.
Subject to regulatory approval and a formal joint venture agreement with Chesapeake, Pinnacle can earn 51% of the properties by issuing 100,000 common shares and a US$50,000 cash payment upon signing the agreement and a further 150,000 shares on June 1, 2007. On or within the first anniversary of the agreement, Pinnacle will pay an additional US$50,000 cash and issue 250,000 shares and commit US$500,000 for work expenditures on the properties. On the second, third, and fourth anniversaries, Pinnacle will pay Chesapeake US$400,000 per year by way of cash or shares and commit to work expenditures in years 2-5 of US$1,250,000; $1,250,000; $1,500,000 and $1,500,000 respectively. Pinnacle has an option to earn an additional 19% by completing a bankable feasibility study by year 8, providing Chesapeake with a US$3 million payment (cash and/or shares) and providing production financing for the properties.
Pinnacle Mines is a Canadian based mineral exploration and development company with assets in Canada, China and Mexico. In Canada, Pinnacle holds several properties in Northwestern British Columbia in proximity to numerous past and producing mines including the Silbak-Premier Mine and Barrick Gold’s famed Eskay Creek Mine. In China, Pinnacle’s focus is in Southeast Yunnan, an area being increasingly considered for its potential to host significant mineral resources including “Carlin” style gold deposits. In Mexico, Pinnacle recently entered into an option to acquire the Tuligtic property, a copper-gold target near Mexico City.
For further information contact Andrew Bowering, President, at 604-688-7377 or visit Pinnacle’s website at www.pinnaclemines.com.
On behalf of the Board of Directors“Andrew Bowering”
President and CEO The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of the content of this news release.