Trading Symbol: FTR-TSX-V
VANCOUVER,
Jan. 27, 2014 /CNW/ -
Overview
Although commodities and the global mining exploration industry in
general are both facing many market headwinds, Firesteel has found
creative solutions to developing existing properties and acquiring
new ones while building our treasury.
In late 2012, amid dire warnings for many under-financed
juniors, Firesteel found itself almost out of cash and carrying
significant debts.
It became clear that settling our debts and financing
Firesteel's ROK Coyote and Copper Creek properties would require a
departure from traditional financings. With that in mind we began
looking for strategic partners who would both spend the cash
required for exploration and who would conduct the necessary
exploration to add value to the properties.
As a result, we have two highly prospective flagship properties
and we have capable partners investing significant sums of money
into their exploration. Firesteel is thus in much better shape
currently to weather the downturn in the junior resource market
than many of its peers. That said, Firesteel remains cautious in
how cash is spent.
Strategic Partners
In May 2013, a term sheet for an
option and joint venture agreement on the Copper Creek property
(now renamed Sheslay) was signed with Prosper Gold (TSX-V: PGX) and closed in
September 2013.
Also in May 2013, a term sheet for
an option and joint venture agreement on the ROK Coyote property
was signed with Oz Minerals of Australia (ASX:OZL), who announced in
December 2013 that it had completed
its due diligence and would begin a second round of drilling as
soon as the weather allowed access.
If all parts of these deals are exercised, they will
collectively result in $18 million
being spent on exploration on the properties and an injection into
the Firesteel treasury of $2.4
million cash and 1 million Prosper
Gold shares over four years.
Promising early drill results have been released on the Sheslay
property. These drill results on one of 5 large targets are
comparable to many of the drill holes on both the Red Chris
property and on Colorado Resources North ROK property. The star
target appears to be a large target with mineralization at surface
and open at a depth of 598 metres. Drill results can be found at
http://www.firesteelresources.com/s/news.asp?ReportID=609345
Oz Minerals has drilled about 1700 metres on the ROK Coyote
property. Drilling enabled testing of geophysical anomalies and has
allowed for the features to be characterised and used to prioritise
other geophysical anomalies on the ROK-Coyote claims.
Drilling beneath well-developed gossans suggests that the
structural complexity of the area means that expressions observed
on surface may not necessarily be reflected at depth.
Drilling results show that chargeable conductive zones such as Main
Zone are related to highly pyritised (7-8%) volcanic rocks.
While the 2013 drilling program failed to return any significant
intersections a number of important targeting strategies were
tested that will greatly assist future exploration efforts.
Now that due diligence is completed on ROK
Coyote, Oz is gearing up so as to be ready for an early start to
the 2014 drill program and will be active on the property as soon
as weather permits.
Plans for 2014
Both OZ Minerals and Prosper Gold
plan to spend the winter months reviewing and interpreting their
data and selecting drill targets so as to be ready at the start of
the 2014 season.
During 2014, Firesteel will continue to develop its
relationships with prospective partners for future deals and
reinforce the relationship with its existing partners.
Firesteel's management and board will continue to look for ways
to build our treasury and will continue to search for acquisition
targets during 2014. This strategy, outlined below, will be
dependent on the availability of cash.
Prospect Generator Strategy
Early in 2013 Firesteel changed its business strategy to become a
prospect generator focussed on copper porphyries and has reviewed
more than 15 properties in North and South America over the last 9 months. It is
our desire to only acquire properties with world class potential.
To date, none have met our selection criteria.
In order to bring this strategy to life, a decision to
strengthen our board with a stellar technical team was made, and 3
new directors were added: David
Forest, a geologist and former analyst with Casey Research; Peter
Pollard, a world authority on copper porphyries; and
Ernest Cleave, a financial executive
with extensive experience in the junior mining world. Thus, in
addition to our two existing directors, we now have 3 very
competent geologists on the board, each bringing very separate and
distinct skills that will be invaluable as we evaluate target
properties for acquisition. Members of the board are active in the
day to day operations of the company.
In addition to the above changes to our board of directors,
Ian Fodie has joined as CFO. Ian has
extensive public company experience in the junior mining and
exploration sector. In addition to this, his M&A experience
will be invaluable as we seek out acquisitions.
As part of our new strategy we decided to liquidate
non-strategic assets, to this end Firesteel's Virimoa property, a
small silver-gold property in Mexico, was sold to Chesapeake Gold (TSX-V:CKG) for US$125,000.
Firesteel will continue looking for a partner to option its
Poker property also in the Stikine Arch area. The property shows
some high grade gold in rock chip samples from 36 quartz-sulphide
boulders up to 2 m in size and which averaged 24.24 g/t gold. The
best sample showed 252.16 g/t of gold.
In the short term cash remains tight, so fiscal discipline is
the order of the day and we continue to contain costs by avoiding
all unnecessary expenses. Active marketing and IR programs will not
begin until there is sufficient cash in the treasury to reasonably
support these activities.
Share Price Catalysts
The Stikine Arch area of British Colombia, where our properties are
located, continues to attract interest as do a number of the
explorers and mine developers in the area. Over the next 12 months
share price catalysts will mostly be drill results from both
Sheslay and ROK Coyote as well as drill results from significant
neighbors like Colorado Resources
and Serengeti Resources. The acquisition of a quality copper
porphyry property in a stable jurisdiction should also benefit the
share price if we are able to make a suitable acquisition.
We will continue to seek opportunities for articles by analysts
and industry observers. During 2013 we received positive mentions
from a number of authors. Copies of these articles can be found at
http://www.firesteelresources.com/s/news.asp?daterange=2013/01/01...2013/12/31
Copper Outlook
A recent article by Rick
Mills, the owner of www.Aheadoftheherd.com, argues that
although there are large untapped copper resources available, based
on per capita copper utilization in the western world it is highly
probable that demand from urbanization in South East Asia will create severe shortages
in the supply of copper between now and 2050. An excerpt of the
article states:
" If we mined every last discovered, and undiscovered, pound
of land based copper the expected 8.2 billion people in the
developing world would only get three quarters of the way towards
copper use parity per capita with the U.S.
Of course the rest of us, the other 1.8 billion people
expected to be on this planet by 2050, aren't going to be easing
up, we're still going to be using copper at prestigious rates while
our eastern cousins play catch up.
Copper use parity isn't going to happen, it can't.
It's this author's opinion the developing world will not get
a third of the way to our development levels here in the west
before we all run out of USGS stated copper resources.
Consider that this game of 'Copper Catch Up' is not going to
happen in 100 years, it's happening now.
The world's exploding population, the massive shift from
rural to urban, the growth of a very consumption minded middle
class in developing countries, it's all happening now.
Add in finite, increasingly hard to source resources.
The effects will felt long before we actually start to run
out of copper and there will be severe consequences:
- Rising energy and commodity prices
- A decline in the global economy
- Civil unrest"
Qualified Person
The technical information in this shareholder report has been
reviewed by Paul Sarjeant, P.Geo, a
Qualified Person under National Instrument 43-101
About the Company
Firesteel is an exploration-stage junior mining
company engaged in the acquisition and exploration of prospective
precious and base metal properties in Canada and stable jurisdictions around the
world.
Firesteel currently has two highly prospective
properties in British Colombia.
The ROK Coyote property is currently under
option to OZ, a wholly owned subsidiary of OZ Minerals (ASX:OZL).
OZ has the right to acquire up to 80% of the property in return for
spending US$13,000,000 in exploration
expenditures and payment of US$1,500,000 in cash to Firesteel.
Highlights of the ROK Coyote property include:
- 6,900 ha of highly prospective large tonnage targets with
known Cu-Au results
- Historical drilling highlights - 38.37 m @ 1.32% Cu, 1.54 g/t
Au
- Adjacent to Red Chris Mine
development owned by Imperial Metals with P&P Reserves of
302 Mt at 0.365 Cu and 0.27 g/t Au (a
28 year mine life at 30,000 tpd).
The Sheslay property is currently under option
to Prosper Gold. (TSX-V: PGX).
Under the terms of this agreement, Prosper has the right to acquire
up to 80% of the property in return for spending $5,000,000 on exploration and payment of
$1,000,000 in cash and 1,000,000
Prosper Gold shares to
Firesteel.
Highlights of the Sheslay property include:
- 6,700 Ha property hosts five significant Cu-Au targets within
close proximity with large tonnage, high grade potential.
- Historical drilling highlight - grading 242.3 m @ 0.44% Cu
& 0.32 g/t Au.
- Largest of the targets is 1,800 m by 750 m.
The Company's management and board of directors
have extensive experience in exploration, operations, business and
corporate finance.
The Company's objective is to enhance
shareholder value as a prospect generator by identifying and
securing early-stage exploration opportunities and developing them
to more advanced stages with the help of joint venture
partners.
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Neither the 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.
Advisory Regarding Forward Looking Statements
This news release contains forward-looking
statements. Users of forward-looking statements are cautioned that
actual results may vary from forward-looking statements contained
herein. Forward-looking statements include, but are not limited to:
expectations, opinions, forecasts, projections and other similar
statements concerning anticipated future events, conditions or
results that are not historical facts. In certain cases,
forward-looking statements can be identified by the use of words
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved". While the Company has
based these forward-looking statements on its expectations about
future events as at the date those statements were prepared, the
statements are not a guarantee of the Company's future
performance. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, it cannot give any assurance that such expectations
will prove to be correct.
The Company's forward-looking statements are
expressly qualified in their entirety by this cautionary statement
and are made as of the date of this new release. Unless
otherwise required by applicable securities laws, the Company does
not intend nor does it undertake any obligation to update or review
any forward-looking statements to reflect subsequent information,
events, results or circumstances or otherwise.
SOURCE Firesteel Resources Inc.