May 28, 2013
Recent Developments at Fekola and Boto Very Encouraging for Siribaya; Equity Financing Update; Merrex Cost Reductions
HALIFAX, NOVA SCOTIA -- (May 28, 2013) - Greg Isenor, President and CEO of Merrex Gold Inc. ("Merrex") (TSX Venture: MXI) comments on recent encouraging announcements from Papillion and IAMGOLD, on Merrex's financing activities, and on Merrex's operating cost reduction measures.
Recent Announcements from Papillion and IAMGOLD
Two recent news releases from Papillion Resources Ltd. regarding its Fekola deposit and another from IAMGOLD Corporation regarding its Boto deposit have important implications for the Merrex-IAMGOLD (50/50) Siribaya Gold Project.
On May 8, 2013 Papillion Resources Ltd. announced that the Mali Ministry of Environment granted the Environmental Permit for its Fekola Gold Project. Then on May 22, 2013 Papillion announced that recent drilling highlighted extensions of gold mineralisation outside the Fekola Mineral Resource Estimate area with drill intersections including 105m @ 4.30g/t; 31m @ 6.99g/t; and 40m @ 1.84g/t, and with additional positive intersections trending south towards Boto including 23 metres @ 1.33 g/t and 31 metres @ 1.51 g/t.
Fekola is a major gold discovery that received little attention in North America while it advanced dramatically over the past three years. Today Fekola is a 4.21 Million ounce deposit with an average grade of 2.38 g/t and, with the recently announced drill results and continued drilling, the next resource estimate should substantially increase the deposit size.
On May 21, 2013 IAMGOLD reported new assay results from 29 diamond drill holes from its Boto deposit:
Like Fekola, Boto seems to have received relatively little attention from analysts. Nevertheless, when IAMGOLD releases the maiden resource estimate on Boto, and analysts begin to fully appreciate the real magnitude of the gold being discovered within the Fekola - Boto trend, and they understand the proximity of Fekola and Boto to Siribaya, I believe they will then realize that this region is a new gold camp and one of the most exciting new gold areas anywhere in Africa.
The Significance of Fekola and Boto to Merrex
The announcements by Papillion and IAMGOLD are important to Merrex for two primary reasons.
Firstly, the strike of the Fekola-Boto trend runs directly into Merrex's 1 km x 2 km Diakha anomaly in the south-west region of Merrex's Kambaya Permit (see attached map). Further, the Boto deposits lie contiguous to the western border of Kambaya with Boto 2 being approximately 1 kilometer from the boundary and the Boto 4 being only 250 meters from the boundary. Both deposits, we believe, have the potential to extend eastward onto the Kambaya permit.
Click here to access map.
Secondly, the Fekola and Boto deposits are evidence of what appears to be a significant gold-bearing system in this region and supports our enthusiasm to pursue the significant but as yet undrilled geochemical anomalies that have been identified by the Siribaya Joint Venture over the past 2.5 years of systematic termite mound sampling across the entire 910 km2 Siribaya land package. Seven major gold anomalies, Kono, Tila, Diakha, Guia and Fandou, Liberta and Haifa (see attached map), and many smaller anomalies, have been identified on the Siribaya land package. These anomalies are large in size and highly anomalous with fifty samples from the 2012 termite mound sampling program assaying greater than 1 g/t Au with the highest assaying at 63.1 g/t Au.
The 2013 drill program will begin to systematically test those targets which represent the best drilling targets on the property to date.
Merrex is proceeding with a $1,200,000 private placement announced May 22, 2013. It is our intention to apply substantially all of the net proceeds of the private placement to funding its pro rata share of the 2013 exploration program to ensure that the Company maintains its 50% interest in the Siribaya Gold Project.
Merrex is also advancing discussions with key shareholders regarding participation in an equity financing.
Cost Reduction Measures
Since the beginning of 2013, Merrex began implementing a number of cost-cutting measures to significantly reduce its monthly cash burn rate. Corporate general and administrative expenses have been reduced for the remainder of the year through reductions in employee and consultant costs, travel and marketing costs and non-essential expenditures. In addition, project-related costs have been reduced by reductions in staff and office costs in Mali, Montreal and Halifax. Additional G&A and other costs saving measures are planned.
About the Siribaya Gold Project
The Siribaya Gold Project is a 50/50 joint Merrex-IAMGOLD advanced-stage gold exploration project in West Mali comprised of approximately 910 square kilometres of gold-prolific exploration permits and permits applications pending. Exploration of the Siribaya Gold Project is conducted under a joint management committee. Expenditures to date on the Siribaya Project total approximately $35 million.
The Siribaya Gold Project presently hosts a NI 43-101 compliant gold resource estimated at 303,900 ounces grading 2.34 g/t Indicated, and 301,400 ounces grading 2.17 g/t Inferred (July 31, 2012 ACA Howe International Limited); the deposit areas are open to the north, south and at depth. Numerous other gold-anomalous target areas have been identified by geochemistry and require drilling.
Gregory P. Isenor, P. Geo., is the Qualified Person as defined under NI 43-101 who has reviewed and is responsible for the technical information presented in this news release.
Merrex is primarily a West African focused gold exploration company with experienced management, a solid exploration team, a prominent gold-producer as a partner and an expanding gold resource ... a winning combination offering investors an extraordinary opportunity.
For further details about the Company's exploration activities or to view the most recent corporate presentation visit Merrex's website at www.merrexgold.com.
To be added to Merrex's email contact list please email your request to [email protected].
On Behalf of the Board
Gregory Isenor, P.Geo.
President & CEO
Merrex Gold Inc.
1550 Bedford Highway
Suite 802, Sun Tower
Bedford, NS B4A 1E6
Tel.: (902) 832-5555
Fax: (902) 832-2223
This press release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future exploration drilling, exploration activities and events or developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions.
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.
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