January 09, 2013 08:00 ET
TORONTO, ONTARIO–(Marketwire – Jan. 9, 2013) – MacDonald Mines Exploration Ltd. (TSX VENTURE:BMK) (‘MacDonald’ or ‘the Company’) provides a mining industry update and an outline of its drill program scheduled for early 2013 to advance its potential VMS discovery at the highly prospective Butler 3 location (see Figure 3). The Butler property is located 36 kilometres west of Cliffs Natural Resources (‘Cliffs’) Big Daddy Chromite deposit (Click here for map).
Kirk McKinnon, President and CEO of MacDonald Mines comments, “As we enter 2013, MacDonald Mines believes it is important to provide a current backdrop for junior mining exploration companies. We find it extremely ironic that both the Prime Minister and the Ontario Premier have outlined natural resources as a prime catalyst for growth in the country and in the province of Ontario respectively. Specifically, Premier Dalton McGuinty outlined the James Bay Lowlands and Natural Resources as a prime catalyst for growth within the province. With this as a backdrop, we wonder why large trading institutions are allowed to impact junior mining stocks with high frequency trading (as profiled in the Financial Post, October 10, 2012 and the Huffington Post) and also receive trading credits from the TSX in return for placing bids.
We are aware high frequency trading is active in the United States but has been banned in some jurisdictions. It has less impact in the United States because of the sheer critical mass in the number of stocks and the number of shares in their trading jurisdictions. Compounding this, large Canadian national banks have certainly discouraged, and all but disallowed, any trading in junior mining stocks. This makes it extremely difficult for their clients to even consider these stocks as part of their overall portfolio or as opportunities for making money. We realize that exploration stocks are high risk and do require some expertise and insight on the part of shareholders but they can also play a role in a balanced portfolio where it constitutes a small percentage of the total investment.
“So what is happening to junior exploration companies? In capsulated form, financings are becoming increasingly difficult to arrange, the stocks are at much lower prices versus historical levels; mostly because credible information and exploration success is not resonating and consequently the junior resource stocks have little or no resulting upward movement. The consequence of this is that much needed financings for exploration activity are now being transacted at historical low prices, creating an environment of super-dilution and a growing lack of interest for investment in this sector. The result: investors are moving away to similar types of investment opportunities in the high-tech and bio-tech industries.
“There are dire predictions that over half of the junior mining companies will disappear within the next few years (see articles from mining industry analysts and writers Brent Cook and John Kaiser) MacDonald is not sure whether our political leaders realize or care that the disappearance of such a large amount of these companies will constitute major layoffs in personnel and the country will likely lose key exploration scientists such as geologists and geophysicists whose experience, as well as the ongoing opportunity for experience, will be gone forever. Equally important, Canada will lose a significant portion of an industry whose participants today are recognized as the world’s best.
“We have seen and heard comments from both the OSC and IROC. These have been bolstered by a number of newspaper articles and they all allude to or say one thing – the playing field is not level and the large and wealthy have a decided edge. We are seeking to nurture a healthy equitable business environment for all potential shareholders, not one that favors a chosen few.
“Most discoveries come about through small exploration companies as they are more nimble, and focus solely on discovery. If they disappear, so will this focus. So here is the question: How can a business sector that is being this decimated be the prime driver for growth in Canada and the province of Ontario? It won’t be and this sought after exploration success will significantly diminish. We could go on at great length but the solutions to arrest this problem could be quick and relatively easy:
“1. Stop the high frequency trading,
“2. Do not allow allocation for bid credits,
“3. Allow easier access for bank customers to buy a small portion of their portfolio in junior exploration stocks,
“4. Mandate that the banks have their analysts look at these smaller companies with the objective of grading and rating them and not just a singular focus on the large, mature mining deals. This would enable clients and potential investors to better evaluate stocks, companies and projects in the junior mining sector for consideration as part of their portfolios.
“The Federal Government could look at increasing flow-through tax relief, which today is an excellent stimulant for exploration, to bring more focus back to this important exploration sector. We should also look at disallowing short selling for all stocks less than one dollar. It is important that investors be made aware and have some understanding of what companies such as MacDonald Mines are facing as we strive continue to develop our projects. Hopefully these comments will resonate, for they are indeed relative to the growth of the country and the province of Ontario.
“Exploration is difficult, especially in an economic climate such as this, and requires a high degree of tenacity. MacDonald is fortunate that it has assembled, over the years, an ever-growing compliment of exploration scientists with a management team focused on success. We are extremely grateful that we have continued to be funded by people who understand our dedication and focus on the prize. We are well financed for the next round of exploration and we are counseled by some of the brightest minds in this sector and have highly professional, seasoned exploration geologists leading all facets of the direct exploration process. It is not good luck that brings exploration success – it is good targets selected with quality data that is managed by highly experienced, insightful exploration scientists and geologists who understand how to continue to move a project forward in spite of the challenges that are inherent with looking for these large and worthy prizes.
“MacDonald is now set to enter a new phase of exploration in 2013. Over the past eight years, we have tenaciously focused on making an exploration discovery in the James Bay ‘Ring of Fire’ region. Most exploration scientists believe there are great resources to be found in this very challenging environment. This shouldn’t be surprising as all of the ‘low hanging fruit,’ as relates to exploration success, has likely been realized but on the other side the potential rewards are huge.”
Returning to James Bay with Strength of Drilling Data and Increased Exploration Knowledge
MacDonald has painstakingly, with some setbacks, acquired what we now believe to be the necessary amount of exploration knowledge that will allow for the kind of success we strive for. Our exploration goal is delineating a Kid Creek-type of target. Kidd Creek is one of the world’s largest Cu-Zn VMS deposits, and it is the Company’s belief that success is near at hand for the following reasons:
Similar Geologic Setting to Kidd Creek
The Butler Property has similar geological conditions that existed for the formation of Kidd Creek-type mineralization. The Butler 3 geological sequence consists of a slightly overturned east-facing assemblage of predominantly felsic volcanic strata, underpinned by a thick sequence of mafic and ultramafic strata, and a major synvolcanic ultramafic intrusive complex. This is the same geological setting identified at the Kidd Creek deposit.
At Butler 3 (See figure 3), MacDonald has observed the following similarities to the Kidd Creek Deposit:
A large mafic/ultramafic sub volcanic heat source
Submarine felsic volcaniclastic strata
Additional Characteristics of a Large VMS System Present
Intense hydrothermal alteration forming a “feeder” system to Zn-Cu-Ag mineralization: in particular, Mn-rich carbonate and an extensive zone of anthophyllite, cordierite-biotite-muscovite-staurolite alterations all increase in strength to the east
A large copper-rich stringer system, overlain by multiple bands of stratiform Zn-Ag mineralization observed in the nearest drill hole, is remarkably similar in form to VMS deposits in both the Sturgeon Lake district and the Chisel Basin portion of the Snow Lake camp
To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/bmk0109fig1.pdf.
The geophysical signatures are consistent with the mineralization already discovered on Butler 3 – with the exception that the footprint to the east and below hole BP12-11 (see figure 2) is much larger, including:
A gravity anomaly of greater size and density than drilled historically (see figure 1)
The magnetic signature is consistent with that observed over the known mineralization at Butler 3
EM conductors are coincident with the gravity anomaly
Cautionary statement: There is no certainty that further exploration will lead to the discovery or development of a mineral deposit the size or nature of Kidd Creek.
To view Figure 2, please visit the following link: http://media3.marketwire.com/docs/bmk0109fig2.pdf.
The next phase of drilling will focus on previously untested areas adjacent to the new discoveries made this fall. This area exhibits positive geophysical characteristics and corresponding geochemical vectors for major VMS mineralization to the east of the historic drilling.
MacDonald has mobilized a geophysical crew to conduct surface electromagnetics (Crone Geophysics) and detailed ground magnetics. This data is considered to be the final step in prioritizing our drill targets. The electromagnetic (EM) survey is designed to map any conductive features associated with the gravity anomaly east of our historic drill program.
To view Figure 3, please visit the following link: http://media3.marketwire.com/docs/bmk0109fig3.pdf.
Quentin Yarie, P.Geo., is the qualified person in regard to the technical data contained within this news release and will be responsible for overseeing all aspects of the Company’s exploration programs.
About MacDonald Mines Exploration Ltd.
MacDonald Mines is a mineral exploration company with an established exploration history in the Canadian Northlands. MacDonald Mines has set upon a strategic direction of exploration with particular focus on copper, zinc, vanadium, nickel and titanium in the “Ring of Fire” area of the James Bay Lowlands of Northern Ontario. More detailed information about the Company is available on the website: www.macdonaldmines.com.
Cautionary Statement: The foregoing information may contain forward-looking statements relating to the future performance of MacDonald Mines Exploration Ltd. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially from MacDonald Mines plans and expectations. These plans, expectations, risks and uncertainties are detailed herein and from time to time in the filings made by MacDonald Mines with the TSX Venture Exchange and securities regulators. MacDonald Mines does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. We seek safe harbour.
Neither 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. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
MacDonald Mines Exploration Ltd.
Senior Vice President, Corporate Development
(416) 364-2753 (FAX)
MacDonald Mines Exploration Ltd.
President & CEO
(416) 364-2753 (FAX)