Young-Shannon cuts McMillan high-grade (June 19, 2006)

Vancouver — Drilling by Young-Shannon Gold Mines (GYS-V, YOSGF-O) on its McMillan gold mine project, near Espanola in northern Ontario, has delivered significant results from a high-grade mineralized zone.

A modest program of three holes totalling just under 700 metres returned a 21.3-metre intercept averaging 7.2 grams gold per tonne in hole MM-05-13, including higher-grade sections of up to 2.1 metres grading 35.7 grams gold. The hole was positioned to test a down-hole induced-polarization anomaly detected from hole MM-05-05, located 40 metres west.

This latest round infills two previously drilled holes (MM-05-05 and 06), which also intersected gold mineralization, indicating a zone with at least 122 metres of strike length remaining open in all directions. The zone occurs in a highly sheared and brecciated series of altered argillites and arenites that have undergone quartz flooding and quartz-carbonate veining. Some narrow banding of semi-massive to massive sulphides (pyrite and arsenopyrite with minor chalcopyrite and pyrrhotite) occurs in the gold zone.

Initially worked in the 1920s, the McMillan mine was operated by underground methods from an almost 300-metre shaft and with a 110-tonne-per-day mill. About 55,000 tonnes of ore was processed averaging 6.2 grams gold to produce about 10,800 oz. until operations ceased in 1937. Records show mineralization continues below the deepest workings, but it was deemed uneconomic at the time. Subsequently, in the mid-1980s, the mine was dewatered and resampled returning grades ranging from 2.4 grams gold per tonne to 16.5 grams. However, it was not drilled until recently due to funding limitations of previous operators.

Young-Shannon is earning up to a 60% interest in the project from MBMI Resources (MBR-V, MBRTF-O) for staged payments of $75,000, issuance of 900,000 shares and spending $1.3 million over three years.

The high-grade intercepts sparked the interest of investors, driving up Young-Shannon’s share price by 108% to the 26 level on volume of almost 1.5 million following the news. With its 24.8 million shares outstanding, the company posts a $6.5-million market capitalization.

The company also recently entered an agreement to sell 46.25% of its Chester gold project, situated between Sudbury and Timmins, to a private company for $2 million. Following the transaction, Young-Shannon will retain 46.25% and Condor Gold will hold the remaining 7.5%.

The Chester project hosts an indicated resource of 200,000 tonnes grading 12.1 grams gold plus a further 650,000 inferred tonnes of 5.5 grams gold in the C-Prime deposit.