Fairstar to acquire stake in Casa Berardi gold property

Montreal-listed Fairstar Explorations will acquire OGY Petroleums’ (TSE) 45% interest in the Fenelon gold project in northwestern Quebec.

Fairstar will issue 1.5 million of its common shares and 1.5 million warrants, exercisable at $2.38 each, to OGY for a 12-month period. The transaction is subject to due diligence and regulatory approval.

Situated in the Casa Berardi area, Fenelon is operated by the Canadian subsidiary of Cyprus Amax Minerals (NYSE), which owns 55% of the project.

The mineralized zone, which has a northwestern strike and a near-vertical dip, is hosted within ultramafic and mafic volcanics and appears to resemble that found at the Detour Lake gold mine 75 km to the west.

The zone has thus far been outlined over a strike length of 250 metres and to a depth of 250 metres, but it is open to the east and at depth. Visible gold has been reported over significant core lengths of the

gold-chalcopyrite-mineralized zone.

Work on the Fenelon property has consisted of 66 holes drilled over the past two years. Fifty-eight of these (totalling 13,374 metres) were drilled early this year in an effort to test the extensions of the gold zone.

The best results of the recent drilling are found in the table below.

An induced-polarization and resistivity survey is planned for this summer in order to define the zone further, and a $5-million drill program is anticipated for next winter.

Meanwhile, Fairstar has arranged a helicopter magnetometer and electromagnetic survey over its three blocks of land in Labrador’s Voisey Bay camp.

The company holds 905 claims in the area, for a total of about 20,000 hectares. Flying is set to begin in mid-July.

HoleGradeWidthDepth

(g/t)(m)(m)

95-1014.2413.9044.6-58.5

95-139.787.20119.9-127.1

95-174.875.75106.6-112.4

95-2210.732.1873.9-76.1

95-2313.746.8048.6-55.4

95-3850.101.93295.1-297.0

95-4689.555.6051.0-56.6

95-6037.486.9917.4-24.4