Vancouver, B.C., March 13, 2013: Desert Star Resources (TSX-V: DSR) (“Desert Star” or the “Company”) entered into an option agreement (the “Option Agreement”) dated January 14, 2013 with Southern Silver Exploration Corp. (“Southern Silver”) to earn up to a 70% interest in Southern Silver’s copper and gold project (the “Oro Project”), located in southwestern New Mexico, United States. For additional information please see the Company’s press release dated January 28, 2013.
The Oro Project is located approximately 80 km southwest of the Silver City porphyry copper district and lies within the prolific Laramide Porphyry Copper Belt, which hosts the world class Tyrone (Freeport-McMoRan; 1,050 Mt @ 0.49% Copper, 0.013% Molybdenum) and Resolution (Resolution Copper Mining; 1,624 Mt @ 1.47% Copper, 0.037% Molybdenum) porphyry deposits (Fig.1).
The Oro claims surround a highly prospective 3 kilometer by 2 kilometer quartz-sericite-pyrite alteration footprint, interpreted to overlie an unexposed porphyry center. Classic porphyry system zonation is indicated by surface gold and copper mineralization associated with Laramide-age intrusions in this core area, flanked by lead-zinc skarn mineralization and distal sediment-hosted gold occurrences (Fig. 2).
In addition to bulk tonnage porphyry copper-molybdenum-gold potential, the Oro Project claims also include the high-grade sediment-hosted Stock Pond gold target. Reconnaissance rock sampling has been completed over a strike length of 140 meters at Stock Pond, yielding values up to 4.8 g/t gold. Gold mineralization at Stock Pond is interpreted to be related to the main porphyry center, located 4 kilometers to the southwest (Fig. 2).
“We are very excited to begin exploring the porphyry copper and sediment-hosted gold targets on the Oro Project”, stated Desert Star Resource’s President and CEO Vince Sorace. “The alteration footprint as well as the distribution of gold and copper mineralization at surface suggests that the Oro property contains promising potential.”
The Oro Claim block includes a number of mine shafts from past producing lead, zinc, silver, and copper operations that started production shortly after these metals were discovered in 1877, and continued sporadically through the early 1960s. The New Mexico Bureau of Mines estimates production from the Eureka District between 1880 and 1961 at 2.9 million pounds of lead, 1.7 million pounds of zinc, 0.5 million pounds of copper, 0.45 million ounces of silver and 5,000 ounces of gold.
The Oro claims have undergone limited modern exploration since the 1960s. Kennecott drilled 600 meters (2 RC drill holes) in 2003. It is unclear whether the target was porphyry or skarn mineralization. In 2009-2011 Southern Silver completed 3,201 meters of diamond drilling designed to test the depth potential of past producing carbonate replacement and skarn zones along the periphery of the porphyry target area. Southern silver also conducted an airborne magnetic survey in 2010 consisting of 455 line kilometers at 75 meter line spacing.
Figure 1. Location of the Oro Project within the Laramide Porphyry Belt, southwestern United States.
In accordance with the terms of the option agreement, the company paid to Southern Silver $75,000 upon execution. The option agreement provides that the company can earn an initial undivided 51-per-cent interest in the Oro project by making an additional cash payment of $150,000 by Aug. 1, 2013, and, over a period of 42 months after approval of the option agreement by the TSX Venture Exchange, incurring exploration expenditures totaling $3-million and issuing one million common shares of the company to Southern Silver. The company also has the option to earn an additional 19-per-cent undivided interest in the Oro project by incurring a further $3-million in exploration expenditures and completing a preliminary economic assessment, on or before the date that is 66 months after exchange approval.
Portions of the properties included in the Oro project are subject to royalties of either 1 per cent or 2 per cent of net smelter returns. In addition, the state leases included in the Oro project provide for royalties of 5 per cent on specified special minerals (such as uranium, thorium, precious and semi-precious stones, rare-earth minerals, or minerals determined to be essential to the production of fissionable materials) and 2 per cent on other minerals (including gold and silver) mined from the property subject to such state leases.
Figure 2. Map of the Oro Property showing the 3 km by 2 km porphyry target (with Total Magnetic Intensity) flanked by lead-zinc skarn workings in addition to the distal Stock Pond sediment-hosted gold target.
Expected 2013 Exploration Program
Desert Star Resources intends to conduct a systematic exploration program on the Oro Project in 2013. The 2013 exploration program includes a detailed deep penetrating geophysical program, surface mapping, sampling, trenching and diamond drilling to test both the porphyry potential on the property as well as the gold potential at Stock Pond.
Technical aspects of this news release have been reviewed and approved by Dr. Alan J. Wainwright, Ph.D., P.Geo., a consultant to the company, designated as a qualified person under National Instrument 43-101.
About Desert Star Resources
Desert Star Resources is a Vancouver-based mineral exploration company focused on creating shareholder value through the identification, acquisition and development of world-class copper and gold projects in top-tier mineral belts, with excellent infrastructure and an established mining culture, located in the southwestern United States.
President and CEO, Desert Star Resources
For further information regarding Desert Star Resources, please email email@example.com
or visit our website at www.desertstar.ca
Cautionary Note Regarding Forward-Looking Statements
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. 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.