Goulagou yields gold for St. Jude

Vancouver — St. Jude Resources (SJD-V) has tabled additional encouraging drill results from its Goulagou gold project in Burkina Faso.

The company is drilling the GG1, GG2 and Yabonsgo gold prospects, which were previously defined by Channel Resources (CRL-V) and Placer Dome (PDG-T). The two companies drilled 22,869 metres and outlined a combined strike length exceeding 3.4 km.

Channel established an inferred resource at GG1 and GG2 of 19.4 million tonnes averaging 1.12 grams gold per tonne, or 700,000 contained ounces, using a cutoff grade of 0.5 gram per tonne. The resource estimate was prepared in 2000, according to the guidelines provided by the Canadian Mining Standards Task Force. However, there has been no independent verification of these data.

Channel performed preliminary metallurgical tests on coarse RC and RAB oxide samples from the GG2 deposit. Recoveries of the oxide ore approached 95%. St. Jude has not yet completed sufficient exploration to verify Channel’s resource estimate.

St. Jude can acquire a 100% interest in the project (subject to the standard government carried back-in interest of 10%) in stages. The junior can earn the initial 90% interest by making five annual payments of US$60,000 for a total of US$300,000. The first payment has been made.

The remaining 10% participating interest can be acquired for a further US$1 million up to 12 months after commercial gold production begins, together with the issuance of a 5% net profits interest to the vendor.

Highlights from the latest round of drilling include the following:

— Hole 40 — 56 metres of 1.01 grams gold starting at 110 metres down-hole.

— Hole 42 — 19 metres of 1.23 grams gold starting at 44 metres down-hole, followed by a 9-metre section that cut 1.28 grams gold.

— Hole 43 — 25 metres of 1.11 grams gold starting from surface.

— Hole 30 — 19 metres of 2.11 grams gold starting at 41 metres down-hole.

— Hole 32 — 25 metres of 2.57 grams gold starting at 42 metres down-hole, including a 7-metre section of 4.47 grams gold.

Mineralization is oxidized to a depth of 100 metres. Previous preliminary metallurgical tests indicate gold recoveries reach up to 95%. St. Jude recently initiated its own metallurgical tests and began reviewing the mining options.

Drilling continues to define oxide resources in the established targets areas.

An additional 269 sq. km of the project remain prospective for additional resources. The junior plans to continue to explore the GG1, GG2, and Yabonsgo deposits, as well as other targets in order to expand the database along zones of enrichment.

Once sufficient exploration has been performed, the junior will commission an independent resource estimate in compliance with NI 43-101 standards.

St. Jude holds three assets in West Africa, namely Hwini-Butre, Benso and Goulagou, and together they span more than 353 sq. km.

The junior stands to earn a 65% interest in Hwini-Butre from Crew Development (CRU-T) by completing a feasibility study and paying Crew US$800,000. The government of Ghana holds a 10% carried interest.

Last year, an independent resource estimate by Watts Griffis & McOuat concluded that the Adoikrom, Father Brown and Dabokrom deposits host a total of 4.2 million tonnes grading 11.51 grams gold in the indicated category, and 1.7 million tonnes averaging 10.32 grams gold in the inferred category. An additional 5.6 million tonnes of inferred resource averaging 1.14 grams gold exist in eluvial and reworked surface material.

The South Benso property lies 30 km south of Hwini-Butre, in the same structural zone as the Hwini-Butre deposits. Drilling and trenching have identified four zones of mineralization: Subriso East, Subriso West, Subriso Central and the G zone.

In September, St. Jude tabled encouraging drill results from the Subriso zones, including the following highlights:

— Hole 160 — 29 metres averaging 1.08 grams gold per tonne starting at a down-hole depth of 37 metres.

— Hole 161 — 13 metres of 2.59 grams gold starting at 42 metres down-hole.

— Hole 164 — 31 metres of 2.7 grams gold starting at 20 metres down-hole.

— Hole 165 — 23 metres of 3.44 grams gold starting at 28 metres down-hole.

— Hole 177 — 38 metres of 2.77 grams gold starting from surface, including a 26-metre interval of 5.4 grams gold.

Benso is a joint venture with Fairstar Explorations (FFR-T). St. Jude stands to earn a 60.125% interest in the project by submitting a feasibility study. The government of Ghana holds a 10% carried interest.

In order to remain focused on its West African gold projects, St. Jude has taken steps to dispose of all of its non-core assets and hopes to spin off the Uchi Lake gold project and its interest in I to I Logistics. St. Jude owns 100% of the Uchi Lake project, subject to a 2.5% net smelter return. At July 31, the company cancelled its earn-in agreement with I to I Logistics and converted its outstanding loan to a 25% non-controlling equity interest.

In addition, St. Jude has sold its interest in MGB Plastics for US$29,000. This interest had previously been written off entirely. The deal is part of an arm’s-length transaction with California-based Fruit-Pak Technologies.

At the end of the second quarter, St. Jude had $1.4 million in its coffers. Additional capital is expected to come from both existing warrants and options, which, if exercised, would provide an additional $3.1 million. The junior spent $1.6 million on its resource properties in the first half of the year.