Jun. 6, 2011 (TheNewswire.ca) --
Windstorm Resources Inc. (TSX-V: WSR, FRA: 4WE, WKN: A1H700, "Windstorm" or "the Company") is pleased to announce it has entered into an agreement whereby it has an option to acquire a 100% interest in the 6,475 hectare Escondida gold-silver project in Mexico. La Escondida is located along a 300 km structural corridor that includes known mineral deposits such as Peñasquito (~18 million oz. Au)1, Camino Rojo (~3.5 million oz. Au)2, Charcas (major Ag, Pb, Zn district) and Cerro San Pedro (~2.1 million oz. Au3 plus significant historical production).
Windstorm President, Dr. Gerry Carlson, stated "We are extremely pleased to have concluded this new Escondida acquisition. This is part of our ongoing strategy to focus on gold and silver exploration in Mexico and to build a solid pipeline of precious metals projects for the Company."
The Company plans an airborne ZTEM geophysical survey over the project area. Zones with anomalous resistivity response will be followed up by ground geophysical surveys including Induced Polarization and gravity. It is anticipated that the highest priority targets will be ready for drill testing by year end.
The road accessible project, covering 6,475 hectares, is largely covered with overburden and post-mineral volcanic rocks. The exploration target is gold-rich polymetallic mineralization, including skarn, breccia, and stockwork, similar to the Peñasquito and Camino Rojo deposits, and hosted within Cretaceous sedimentary rocks. Four discrete targets in areas of favourable stratigraphy have been defined by multi-element geochemical anomalies that are up to several km in length, suggesting potentially significant bedrock sources. A magnetic low coincident with one of these anomalies may be caused by associated hydrothermal alteration.
Windstorm has an option to acquire a 100% interest in the Escondida Project for $460,000, to be paid over six years, including a $20,000 signature payment, plus a $5 million payment to exercise the option. The final payment may be extended annually by making an advanced royalty payment of $125,000, adjusted for inflation, for up to 99 years. The agreement is subject to a 3% NSR Royalty on precious metals and a 1.5% NSR Royalty on other metals; half of both can be purchased at any time for $5 million. The Company has also committed to a minimum $105,000 exploration expenditure during the first year of the agreement.
The Company also announces that it has dropped the option to acquire an interest in the Kalum gold project, British Columbia, which it had under option from Eagle Plains Resources Ltd. (TSXV:EPL) (TSX-V: EPL).
References:
1. http://www.goldcorp.com/_resources/2010_ar/docs/reserves_and_resources.pdf
2. http://www.goldcorp.com/_resources/2010_ar/docs/reserves_and_resources.pdf
3. http://www.newgold.com/Investors/ReservesandResources/default.aspx
About Windstorm Resources Inc. (TSXV:WSR)
Windstorm Resources is a new company focused on precious metals exploration in Mexico, led by an industry-renowned management team with technical expertise and market experience. Management continues to evaluate quality drill-ready prospects aiming to build an attractive portfolio of gold and silver projects offering multiple opportunities for discovery success. Windstorm is a member of the Grosso Group, a management company specializing in resource exploration for over 18 years.
ON BEHALF OF THE BOARD
"Gerald Carlson"
_______________________________
Dr. Gerald Carlson, President & CEO
For further information please contact:
Corporate Communications Tel: 1-604-687-1828 Toll-Free: 1-800-901-0058
Email: info@windstormresources.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Readers are encouraged to refer to the Company's public disclosure documents for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation to publicly update or revise any forward-looking statements. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.
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