News Release No. 11-08
Rainy Mountain Acquires Option on Gold Exploration Property
West Vancouver, British Columbia – May 5, 2011 – Rainy Mountain Royalty Corp. (the “Company” or “Rainy Mountain”) is pleased to announce that, subject to regulatory approval, it has entered into an option agreement (the “Agreement”) dated April 13, 2011 with Donald D. Brown (the “Optionor”) of Ottawa, Ontario, to acquire the Fry-McVean Claims (the “Property”) consisting of 167 claim units in the Drum Lake area in the Patricia Mining District, Ontario. The Property is a gold exploration project and is located approximately 70 km southwest of Pickle Lake in northwestern Ontario. The Property has winter road access (with certain required annual road preparations and extensions for a portion of the road between Pickle Lake and Cat Lake). The Property is also near the Ontario Hydro Power line that extends from Pickle Lake to the former Golden Patricia Gold Mine in the Dorothy-Dobie Lake area of Ontario.
Under the Agreement, in order to acquire the Property, the Company is required to pay $100,000 ($25,000 per year over 4 years), issue 1,000,000 shares (200,000 shares in each of the 4 years and an additional 200,000 shares once a feasibility study has been completed) and is required to spend $1,700,000 in exploration expenditures on the Property over 4 years.
Exploration work completed to date by the Optionor, Donald D. Brown, Ph.D., P.Geo, indicates that there are two anomalous humus gold zones on the Property, which are estimated to be 1.6 km in length and 250 to 300 metres in width. These anomalous zones are close to a major east-west striking shear zone, namely, the Fry-McVean Shear Zone. The anomalous gold zones are bound by two sub-parallel shear zones as defined by EM (electromagnetic) conductors. There is an array of such unexplored subordinate splay shears that extend in a sub-parallel direction from the Fry-McVean Shear Zone, as Riedel shears, that are expressed as EM conductors. Donald Brown believes that this brittle-ductile shear zone is of the same magnitude as the Bearhead Fault or shear zone in the Dorothy-Dobie Lake area, Ontario (on which the former Golden Patricia Gold Mine is located). Donald Brown, Ph.D., P.Geo, also believes that the anomalies are statistically similar to the humus gold anomaly over the Page-Williams gold deposit at Hemlo, Ontario.
342 humus gold samples collected from the proposed drill target area on the Property have been tested by Noranda (172 samples in 1987) and by Donald Brown, Ph.D., P.Geo. (170 samples in 2009), using advanced geostatistical methods (Instrumental Neutron Activation Analysis or “INNA”) to determine the local threshold value of gold in humus (using a background threshold value of 4ppb gold). This method has been used successfully over the Page-Williams gold deposit at Hemlo, Ontario. As part of the planned exploration program for this summer, the Company intends to expand on the previous sampling program to include the Fry-McVean Shear Zone and the four splay shear zones on the eastern half of the Property to test for gold and gold-indicator elements using the advanced geostatistical method utilized by Donald Brown, Ph.D., P. Geo.
This news release has been reviewed and approved by Robert Middleton, P.Eng., who is acting as the Qualified Person for the Company’s Fry-McVean Property project in accordance with regulations under NI 43-101.
For further information, contact Mr. Clive Shallow, Shareholder Communications, at 604-922-2030, Robert A. Young, Investor Relations, at 604-682-5123 or visit the Company's website at www.rmroyalty.com.
Rainy Mountain Royalty Corp.
“Ronald A. Coombes”
Ronald A. Coombes, President
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain statements that may be deemed "forward-looking statements" within the meaning of applicable securities legislation. All statements, other than statements of historical facts, that address such matters as future exploration, drilling, exploration activities, potential mineralization and resources and events or developments that the Company expects, are forward looking statements and, as such, are subject to risks, uncertainties and other factors of which are beyond the reasonable control of the Company. Such statements are not guarantees of future performance and actual results or developments may differ materially from those expressed in, or implied by, this forward-looking information. Factors that could cause actual results to differ materially from those in forward-looking statements include such matters as market prices, exploitation and exploration results, continued availability of capital and financing, and general economic, market or business conditions. Any forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.