Otis Capital Completes Qualifying Transaction
July 16, 2008
VANCOUVER, B.C. - Otis Capital Corp. (the “Company”) is pleased to announce that its Qualifying Transaction (see News Release dated April 22, 2008) has been approved by the TSX Venture Exchange. The Qualifying Transaction consists of the acquisition of a 100% interest in the Blue Hill Creek Gold Project (the “Blue Hill Creek”), a right to earn up to a 75% interest in the Kilgore Gold Project and two other gold properties (see News Release dated June 10, 2008), additions of new management and a concurrent financing.
About the Kilgore Gold Project
The Kilgore Gold Project comprises a large, 5 square mile, volcanic-hosted disseminated epithermal hot-spring gold system situated on the northern margin of the eastern Snake River Plain. Mineralization is of Pliocene age and is hosted within Miocene age lithic and crystal tuff on the margin of a caldera setting. Mineralization style and setting, host rock type and thickness, and overall size of the mineralizing system are analogous to those characterizing the Round Mountain, Nevada and McDonald Meadows, Montana multi-million ounce volcanic-hosted disseminated gold deposits.
Between 1983 and 1996, a total of 122,257 feet of drilling in 191 holes was conducted on the Kilgore deposit by Bear Creek, Placer Dome US, Pegasus Gold and Echo Bay Mines. The majority of this drilling, 82,897 feet in 122 holes, was performed by Echo Bay between 1994 and 1996. In 1996, Echo Bay completed a NI 43-101 non-compliant cross-sectional global resource estimate for the Kilgore deposit. This estimate comprises 706,000 ounces of gold in 22.582MM tons of material at an average grade of 0.031 ounces per ton (“opt”) Au (0.010 opt Au cutoff). Also in 1996, Placer Dome US, Echo Bay’s minority-position joint venture partner on the property, estimated a NI 43-101 non-compliant resource of 561,000 ounces of gold contained in 14.112MM tons at an average grade of 0.040 opt Au (0.015 opt Au cutoff). These estimates, which are based on the above noted historic drilling, are mentioned for historic information and reference purposes only. A Qualified Person has not done sufficient work to classify the historical estimates as current mineral resources, the issuer is not treating the historical estimates as current mineral resources and the historical estimates should not be relied upon.
Within the Kilgore deposit is a higher-grade core comprising a series or set of northwest-trending (?) structurally controlled bonanza-style feeder quartz vein zones that have only partially been drill tested. Some of the better drill intercepts associated with these zones include 90′ @ 1.091 opt Au (hole PK-56, 370′ - 460′), 75′ @ 0.222 opt Au (hole 94 EKR-89, 95′ - 170′), 45′ @ 0.331 opt Au (hole EKM-5, 267′ - 312′), and 65′ @ 0.243 opt Au (hole 94 EKR-86, 250′ - 315′). These zones represent a high priority exploration target for the Company.
Deposit metallurgy is considered excellent based on favorable results of bottle roll and column leach tests performed in 1995 and 1996 by Hazen Research, Inc, Golden, Colorado on Echo Bay drill core and RC cuttings. All bottle roll tests resulted in greater than 90% gold extractability and showed that the mineralization is not refractory. Column leach tests indicate 94.3% recovery on oxidized material (-1/2” crush size) and 86.9% on mixed/partially oxidized material (-1” crush size), material types which together comprise over 85% of the deposit. As noted in a 2002 Rayner and Associates and Van Brunt NI 43-101 compliant report on the property, the extraction of 86.9% gold on mixed material after 75 days of leach time is excellent and suggests that even coarser crush sizes may also lend themselves to favorable extractability, thus enhancing deposit economics.
About the Blue Hill Creek Project
Located in Cassia County, Idaho, the Blue Hill Creek Gold Deposit is a classic epithermal hot spring-type gold exploration target consisting of 18 unpatented federal lode mining claims and an adjacent 80 acre Idaho State lease. The Company retained Mr. Laurence Pancoast, a registered professional geologist and the Company’s Qualified Person, to prepare a NI 43-101 Technical Report entitled “Blue Hill Creek Gold Project - Geology, Mineralization, Resource Potential, Cassia County, Idaho” (the “Report”). The Report confirmed the presence of an open-ended Inferred Resource totaling 14,438,600 tons having an average gold grade of 0.0163 ounces per ton, for a total of 235,000 ounces of gold. Additionally, the Report recommends an immediate USD$600,000 exploration program, including $500,000 in drilling.
Gold mineralization at Blue Hill Creek was originally discovered by Meridian Minerals in the summer of 1985. This mineralization is part of a larger, north-trending, 5-mile-long by 1-mile-wide belt of precious metal occurrences along the western margin of the Albion Range metamorphic core complex. At Blue Hill Creek, alteration and gold mineralization are mainly hosted by capping sinters and Tertiary Salt Lake Formation epiclastic sedimentary and tuffaceous volcanic rocks. Gold-bearing chalcedonic sinters and strongly silicified tuffaceous sedimentary rocks with disseminated pyrite and quartz veining compose the main target in the altered zone. This zone, currently 3,350-feet long and up to 1,000-feet wide, with mineralization open in all directions as well as at depth, contains surface gold values to 0.060 opt. Mineralization appears related to north- and northeast-trending, high-angle structures. Local, post-mineral northeast-trending faulting has displaced and buried mineralized sections to the northwest, some of which have yet to be drill tested.
A total of 11,403 feet of drilling spread among 26 reverse circulation holes have been placed on the property, 17 by Meridian to partially test the Tertiary-hosted target during the 1986 and 1987 field seasons, and an additional nine by Latitude Minerals Corp. to test the Tertiary-hosted target and suspected deeper feeders in Paleozoic carbonate rocks during the 1998 field season. Of the 26 holes drilled, 22 encountered gold mineralization and extensive zones of silicification, with 10 holes bottoming in rock containing in excess of 0.010 opt Au. Some of the best intercepts include 100 feet @ 0.033, 400 feet @ 0.017, 260 feet @ 0.024, and 170 feet @ 0.023 opt Au. These historic drill results confirm the presence of significant thicknesses of bulk-tonnage, epithermal hot-spring-type gold mineralization in the target area, as well as the potential for additional mineralization along the open-ended, lateral, and at depth extensions of the deposit.
John R. Carden, Ph.D., P. Geo., a Qualified Person as defined by National Instrument Policy 43-101, is responsible for the technical information contained in this news release.
Dr. John R. Carden has been appointed to the Board of Directors of the Company. Dr. Carden has more than 30 years’ experience in exploration management, teaching, and research. He has broad experience in managing large exploration programs including tracking costs, managing personnel, negotiating leases and contracts, writing technical reports, delivering verbal presentations, writing permitting and compliance documents for state and federal agencies, and managing remote drilling programs involving camp logistics. He has a proven track record for discovery of ore deposits in the western United States, with a gross metal value of more than $750 million. From 1986 through 1998, Dr. Carden was with Echo Bay Mines. During the period from 1992 to 1998, he was Echo Bay’s Director of U.S. Exploration, where he directed the work of two district geologists, eight senior geologists, and a GIS specialist. This group was successful in generating 35 funded projects over a five year period. While at Echo Bay, he discovered the 600,000 ounce Lamefoot gold deposit, Echo Bay’s highest-grade and lowest cost producer, and the Easy Junior gold deposit, a 250,000 ounce sediment-hosted gold deposit located in White Pine County, Nevada. Most recently, Dr. Carden has consulted on gold projects in Mexico for Minefinders in Chihuahua and Sonora states, and in Zacatecas for Corex Gold Corp and in Chihuahua for Paramount Gold and Silver Corp.
Dr. Carden has a Ph.D. in Geology from the Geophysical Institute, University of Alaska, Fairbanks, Alaska and an M.Sc. degree in Geology from Kent State University, Kent, Ohio. He is a Licensed Geologist in the State of Washington and a Fellow member of the American Institute of Professional Geologists and a Fellow of the Society of Economic Geologists. Dr. Carden is currently a Director of Paramount Gold and Silver Corp. and Magnum Uranium Corp.
Mr. Mitchell Bernardi has been appointed as Chief Geologist of the Company and an officer of the Company’s US subsidiary, Otis Capital USA Corp. Mr. Bernardi has over 30 years of experience in the mining industry and a proven exploration track record of mineral resources and discoveries in gold, zinc, copper, yttrium, rare earths, and uranium. Mr. Bernardi’s education includes a M.Sc. in Geology (Magna Cum Laude) from Western Washington University and additional studies under a University Fellowship at Ohio State University. The bulk of Mr. Bernardi’s professional experience, some 20 years, has been in precious metals property generation, exploration, and development, having worked on numerous deposit types while employed by Echo Bay Mines, Cyprus Metals Exploration, Meridian Minerals, Unocal - Molycorp, Inc., Latitude Minerals and Amoco Minerals. He is currently the Chief Geologist of Magnum Uranium Corp., and in this role has been responsible for the identification, acquisition and development of all Magnum properties.
Discoveries directly associated with Mr. Bernardi as project leader or as co-discoverer of include the Kilgore gold deposit, Idaho, Coulterville gold project, California, Crypto zinc deposit, Utah, Pan gold deposit, Nevada, Santiam copper breccia pipe, Oregon, and the Blue Hill Creek gold/silver deposit, Idaho.
The Company is also pleased to announce the closing of a concurrent non-brokered private placement of 3,765,000 Units at a price of $.50 per Unit, for aggregate gross proceeds of $1,882,500. Each Unit consists of one common share (a “Share”) and one Share purchase warrant (a “Warrant”). Each Warrant is exercisable to purchase a Share of the Company for two years, at a price of $.70 per Share in Year One, and $.90 per Share in Year Two. The net proceeds from this private placement will be used to conduct the work program recommended on the Kilgore Gold Project and Blue Hill Creek Project and for general working capital purposes. Commissions or finder’s fees totalling $89,425 have been paid on the financing.
ON BEHALF OF THE BOARD
“Craig T. Lindsay”
For additional information please contact:
Tel: 604.683.2507 Fax: 604.683.2506
# 350-409 Granville St., Vancouver, BC, V6C 1T2 T. 604.683.2507 F: 604.683.2506
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