Cadiscor sees exploration potential in Sleeping Giant gold mine

B>Cadiscor Resources (CAO-V) has signed an option agreement to acquire Iamgolds (IMG-T, IAG-N) Sleeping Giant mine and milling facilities in the Quebecs Abitibi region, located 70 km west of its own Discovery gold project.

The company wont be able to acquire the mine until Iamgold is finished mining current reserves, or by Apr. 1, 2009 at the latest, for up to $7 million.

Cadiscor president Michael Bouchard hopes to benefit from the acquisition in two ways.

The Sleeping Giant mine acquisition gives us strategic milling facilities that will lower the capital costs necessary to develop the Discovery project following a positive feasibility study and a production decision, Bouchard said in a statement. At the same time, we strongly believe in the exploration potential of Seeping Giant.

Cadiscor plans to do a significant amount of exploration at the mine. Sleeping Giant has been in operation since 1988 and has produced 825,000 oz. gold from 2.3 million tonnes of ore grading 11.1 grams gold per tonne.

Under the current production schedule, mining is set to stop at the end of 2008, based on current reserves.

Cadiscor has spent more than $4 million over the last year on exploration drilling at the Discovery project. Discovery’s measured and indicated resource totals 1.2 million tonnes grading 5.53 grams gold per tonne, or nearly 207,000 oz. gold. The inferred resource at Discovery is 967,000 tonnes grading 6.06 grams gold per tonne, or 189,000 oz. gold. The gold zones are open at depth and along strike.

The company hopes to receive a completed scoping study by November on the Main Area of Discovery, to design an underground exploration program, including a bulk sample program and underground exploration drilling.

Under the option agreement, Cadiscor will initially pay Iamgold $300,000, 600,000 Cadiscor shares and 1 million purchase warrants valued at $1 each until Apr. 1, 2009.

When Cadiscor takes possession of the mine, it will pay Iamgold $5 million through either cash or shares based on the volume-weighted average price of the last 20 trading days.

Once Cadiscor has milled 300,000 tonnes of ore, it will have to pay Iamgold either $1 million in cash or shares.

Cadiscor will also pay Iamgold a 1% net smelter return royalty for any gold production from the mine property and a 1.5% base metal NSR but only if there are more than 5 million tonnes of measured and indicated resources.

Iamgold shares fell 13 to $8.35 in Toronto today on a trading volume of 1.7 million shares.

Cadiscor shares remained unchanged at 85 on a trading volume of 138,000 shares.