Kiska Metals Corp. has delivered the geological and geophysical report detailing the results from 264 line-kilometers of induced polarization geophysical survey and 23 drill holes at Kiska's Whistler property to Kennecott Exploration Inc., a subsidiary of Rio Tinto. With the delivery of the report, Kiska has completed the requirements under the back-in agreement with Kennecott. Kennecott has 90 days until Nov. 10 to inform Kiska of its decision to exercise or waive its right to back-in to the Whistler Project.
"Our goal has been to resolve the uncertainty surrounding the ultimate ownership of the Whistler Project as soon as possible," said Kiska President and CEO Jason Weber. "One year after completing the merger between Geoinformatics and Rimfire to form Kiska, we have fulfilled the requirements necessary for Kennecott to make a decision regarding its back-in rights. This decision will provide clarity of ownership in the project and a clear path forward for both the project and Kiska."
Under the agreement defining Kennecott's back-in rights, the Rio Tinto-subsidiary can elect to exercise the right to acquire 51 percent by paying Kiska twice its exploration expenditures, estimated at C$30 million dollars, and funding exploration through to the completion of a positive preliminary feasibility study at Whistler. Kennecott can further increase its interest to 60 percent by funding exploration through to a positive production decision. If Kennecott waives its right to back in, its interest will revert to a 2 percent net smelter royalty.
During the 90 day decision period, Kiska will continue drilling at Whistler. Currently two diamond drill rigs are operating. One rig is advancing the Island Mountain Breccia discovery, where drilling in 2009 intersected two zones of gold mineralization. An upper gold-copper zone averages 0.72 grams per metric ton gold, 2.4 g/t silver and 0.16 percent copper over 150 meters and a lower gold intersection averages 1.22 g/t gold over 107 meters.
A second rig is operating on the Whistler Deposit, which hosts a NI 43-101-compliant indicated resource of 1.31 million ounces gold-equivalent and an inferred resource of 4.44 million ounces gold-equivalent Five holes are expected to be completed at the Whistler Deposit by the end of this season and together with the eight holes completed by Geoinformatics after the current resource estimate was completed in early 2008, these drill holes will be incorporated into an updated resource estimate for the Whistler Deposit. Completion of the estimate is expected in early November. Preliminary metallurgical studies are underway for Island Mountain and Whistler with results expected in late August.
