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Menary Townships

HIGHLIGHTS

• 2010 and 2011 drilling programs for a total of 33 BQ holes for 4,047 metres with numerous intercepts and values of up to 16.99 grams Au per tonne over 6.3 metres
• Historical high grade bulk sample (1,000 tons at 0.50 ounces per ton)
• Shear zone discovered in 2011 width of up to 4 metres and a length of over 200 metres long on surface whereby 146 channel samples taken, mainly one metre in length, nominally at 2 metre intervals, at various points along approximately 181 metres. The assay results obtained from wall rock and quartz vein combined channel samples ranged from a low of • Close to the Rainy River Resources Limited deposit and Bayfield Ventures Corp. discovery
• Road accessible and close to current power infrastructure
• Good potential for high grade bulk sample / micro mining to generate positive cash flows
• Numerous untested structures on the property

 

Information

King's Bay Gold Property Location

Location

The property is located in the Townships of Menary, Claxton, McClarty and Senn in the Kenora Mining Division of northwest Ontario. The claim units are located approximately 20 kilometres southeast of the Town of Nestor Falls, Ontario and can be accessed along Road 404, east of Highway 71 which runs between Kenora and Fort Frances, Ontario. The project is located roughly fifteen kilometers northeast of the Richardson Township Project owned by Rainy River Resources Limited (TSX.V: RR) and within 12 kilometres of the recent discovery by Bayfield Ventures Corp. (TSX.V: BYV). The property is adjacent to and along strike to the Rainy River Resources Limited drilling that has been conducted on their Off Lake Gold Project.
King's Bay Gold Number of Claims

Number of Claims & Hectares

The property consists of the original core group of 4 un-patented mining claims acquired by option agreement in January 2010; an additional acquisition of 6 un-patented mining claims by option agreement in August 2010; the staking of 6 un-patented mining claims in October 2011; and a third option agreement was announced on May 7th, 2012 for 2 claims with Perry English, acting on behalf of Rubicon Minerals Corporation, as the vendor. The overall Menary Gold Project now consists of 18 claims for approximately 1,728 hectares in a single contiguous land package.
King's Bay Gold Exploration Targets

Exploration Target

Gold
King's Bay Gold Date of Acquisition

Date of Acquisition via Option Agreement and / or Staking

Three un-patented mineral claims and one patented mining claim (K1079876 (P), 3014054, 4205640, and 4247110) were optioned from William McNerney and Western Troy Capital Resources Inc. on January 20th, 2010, whereas the six un-patented mineral claims (4256392 and 4256394 to 4256398 for 32 claim units) were subsequently optioned from local prospector Luc Gagnon on August 26th, 2010. Six claims (4257383 to 4257388 inclusive) totaling 44 units covering an additional 712 hectares were staked in October 2011 to the north and northeast of the Company’s existing land package after discovering a new gold bearing shear zone at the Galbraith “A” occurrence. These staked claims cover the remaining available geological contact between the Sabaskong granitic batholith and the open ground over the adjacent greenstones (see the news release of October 26th, 2011). On May 7th, 2012, the Corporation announced the acquisition of the Galbraith B gold occurrence via an option agreement with Perry English, on behalf of Rubicon Minerals Corporation, as the vendor. The two new claim blocks (4271600 & 4271601) of 16 units each cover approximately 518 hectares and sit to the southeast of, and are contiguous to, the existing Menary Gold Project claim group.
King's Bay Gold Ownership Interests

Ownership Interests

100 % King’s Bay Gold Corporation subject to annual payments of stock and cash to the various parties identified above and NSRs on future gold production for all of the optioned claims only.
King's Bay Gold Operator

Operator

King’s Bay Gold Corporation
King's Bay Gold Qualified Person

Qualified Person as per National Instrument 43-101 as at June 12th, 2012 (subject to change)

Russell Crosby M.Sc., P.Geo.
King's Bay Gold Information

Information

Regional geology for the property is characterized by the volcanogenic package within the Uchi-Rainy River Belt that has played host to a number of recent gold discoveries, notably the Rainy River Resources of 5 million ounces of gold, the Bayfield Ventures drill findings, the Coventry / Cameron Lake deposit which lie along this mineralized trend as it transects the northwest trending Pipestone Fault structure.

Menary Gold Project – 2010 and 2011 Diamond Drilling Results

 

Given the positive results obtained from holes MIN 10-01 to MIN 10-16 at the Wagg Gold Occurrence during the Spring and Fall of 2010, the Company announced in a news release dated May 11th, 2011 that it had mobilized its geologist and diamond drilling contractor. On November 23rd, 2011, the Corporation reported in a news release that it had now completed its 2011 diamond drilling program for a total of 33 BQ holes at its Menary Gold Project. In 2010 and 2011, a total of 29 BQ holes for 3,508 metres were completed at the Wagg Gold Occurrence, 3 additional BQ holes for 478 metres were drilled at the Galbraith “A” Occurrence and one additional BQ hole for 61 metres was drilled at the southern end of the property close to Road 404 to test a sulfide zone for mineralization. The table on this page and on the following pages summarizes the results for holes MIN-10-01 to MIN-11-29 (29 holes) at the Wagg Gold Occurrence, holes GAL-A-11-1 to GAL-A-11-3 (3 holes) at the Galbraith “A” prospect and hole MIN-S-11-1 (1 hole) located at the south end of the property. The drilling at the Wagg Gold Occurrence was focused within an approximate 100m wide x 200m long x 100m deep geologically productive area.

 

In the late Fall of 2011, the Corporation started drilling the Galbraith “A” showing, located approximately 900 metres north of the Wagg occurrence. With successful drilling results at both the Wagg and at the Galbraith prospects, the company plans to conduct trenching and sampling between these occurrences to see if continuity exists between them. At Galbraith “A”, historical grab samples collected by prospectors employed by Western Troy Capital Resources Inc. yielded 2.42 Au g/t and 94.48 Au g/t (Source: Ontario Ministry of Northern Development and Mines Assessment Files, verified by Russell Crosby, M.Sc., P.Geo.). Grab samples collected by King’s Bay Gold personnel in August 2011 at the 4’ x 4’ x 3’ Western Troy blasted pit at Galbraith “A” yielded 8.96 Au g/t and 15.78 Au g/t.

 

True widths are unknown due to the irregular shapes of the gold bearing quartz veins

 

 

Prospect

Drill Hole

Dip

Grade

Intercept Length

From (m)

To (m)

Wagg

MIN-10-01

-45o

13.57 g/t

over 2.68m

11.89

14.57

Including

80.96 g/t

over 0.43m

14.14

14.57

0.40 g/t

over 1.03m

158.49

159.52

Including

1.30 g/t

over 0.24m

158.73

158.97

1.69 g/t

over 0.61m

166.71

167.32

Wagg

MIN-10-02

-45o

0.59 g/t

over 3.87m

14.11

17.98

Including

4.71 g/t

over 0.43m

16.49

16.92

Wagg

MIN-10-03

-45o

0.13 g/t

over 0.30m

59.43

59.73

Wagg

MIN-10-04

-45o

0.32 g/t

over 0.30m

23.86

24.16

Wagg

MIN-10-05

-45o

0.20 g/t

over 1.52m

29.71

31.23

Wagg

MIN-10-06

-45o

0.34 g/t

over 2.43m

17.96

20.39

Including

0.87 g/t

over 0.30m

19.08

19.38

Wagg

MIN-10-07

-45o

0.15 g/t

over 0.46m

18.59

19.05

Wagg

MIN-10-08

-45o

No significant assays.

Wagg

MIN-10-09

-45o

0.35 g/t

over 0.61m

9.75

10.36

1.46 g/t

over 0.37m

18.52

18.89

Wagg

MIN-10-10

-45o

0.71 g/t

over 4.66m

0.61

5.27

Including

3.83 g/t

over 0.24m

4.72

4.96

6.5 g/t

over 10.05m

9.60

19.65

Including

34.62 g/t

over 1.16m

11.39

12.55

and including

57.55 g/t

over 0.25m

14.62

14.87

Wagg

MIN-10-11

-45o

1.18 g/t

over 4.08m

1.10

5.18

Including

5.07 g/t

over 0.30m

2.31

2.61

0.45 g/t

over 4.26m

12.19

16.45

Including

2.40 g/t

over 0.30m

12.49

12.79

and including

2.37 g/t

over 0.39m

15.14

15.53

6.37 g/t

over 12.03m

61.57

73.60

Including

141.52 g/t

over 0.15m

63.48

63.63

and including

95.11 g/t

over 0.51m

66.29

66.80

Wagg

MIN-10-12

-45o

0.34 g/t

over 3.56m

5.57

9.14

Including

0.67 g/t

over 0.30m

7.31

7.61

Wagg

MIN-10-13 -45o

1.59 g/t

over 1.67m

1.53

3.20

1.34 g/t

over 0.61m

14.02

14.63

2.41 g/t

over 10.07m

23.31

24.38

1.49 g/t

over 1.22m

75.59

76.81

Wagg

MIN-10-14

-45o

0.51 g/t

over 0.34m

32.58

32.92

0.10 g/t

over 0.61m

84.73

85.34

Wagg

MIN-10-15

-45o

0.17 g/t

Over 1.10m

18.93

20.03

1.56 g/t

over 3.11m

23.28

23.39

Including

8.38 g/t

over 0.37m

25.35

25.72

0.11 g/t

over 0.24m

85.56

82.80

Wagg

MIN-10-16

-45o

0.44 g/t

over 10.97m

54.55

65.52

0.14 g/t

over 0.24m

73.23

73.47

0.29 g/t

over 0.30m

81.68

81.98

Wagg

MIN-11-17

-45o

0.45 g/t

over 11.0m

54.5

65.5

Including

1.41 g/t

over 0.3m

57.0

57.3

Wagg

MIN-11-18

-45o

16.99 g/t

over 6.3m

75.4

81.7

Including

63.29 g/t

over 1.7m

77.5

79.2

Wagg

MIN-11-19

-45o

0.14 g/t

over 0.9m

67.0

67.9

Wagg

MIN-11-20

-45o

1.28 g/t

over 0.3m

40.8

41.1

Wagg

MIN-11-21

-45o

12.40 g/t

over 4.8m

0

4.8

Wagg

MIN-11-22

-45o

5.95 g/t

over 1.9m

10.8

12.7

Including

57.27 g/t

over 0.2m

12.2

12.4

1.90 g/t

over 0.4m

41.3

41.7

Wagg

MIN-11-23

-45o

0.39 g/t

over 0.6m

15.5

16.1

Wagg

MIN-11-24

-45o

No significant assays.

Wagg

MIN-11-25

-45o

No significant assays.

Wagg

MIN-11-26

-45o

0.73 g/t

over 0.6m

12.6

13.2

Wagg

MIN-11-27

-45o

0.18 g/t

over 0.30m

14.3

14.6

Wagg

MIN-11-28

-45o

0.10 g/t

over 0.30m

41.0

41.3

Wagg

MIN-11-29

-60o

0.13 g/t

over 0.20m

62.7

62.9

Menary S

MIN-S-11-01

-45o

0.117 g/t

over 1.60m

37.7

39.3

Galbraith A

GAL-A-11-01

-45o

No significant assays.

Galbraith A

GAL-A-11-02

-45o

0.217 g/t

over 1.8m

33.2

35.0

Galbraith A

GAL-A-11-03

-45o

7.941 g/t

over 0.5m

35.7

36.2

 

The above analytical work was done at Accurassay Laboratories Limited, an ISO-Certified laboratory facility in Thunder Bay, Ontario using the fire assay method. Half of the drill cores were sent in for analysis, along with accompanying standards, duplicates and blanks. The remaining cores are being stored and archived for future testing or verification.

 

Kyle Picard, King’s Bay Gold’s President & CEO stated during the Fall 2011 drilling program: “The information that we’ve received to date from our drilling activities indicates that the Menary may be amenable to low grade bulk tonnage open pit mining. Before that can happen, additional drilling, exploration and development work, economic analysis and research on processing methodologies and costs will be needed to determine if the zones identified to date will be economically amenable to open pit mining.”

 

Menary Gold Project – New Shear Zone

 

On October 26th, 2011 King’s Bay Gold announced in a news release that it had increased its land position at its Menary Project by staking 6 mining claims totaling 44 units to the north and northeast of the Company’s existing land package. In this area gold showings occur in the greenstones within about 2 kilometres of the geological contact with the Sabaskong batholith.  These 6 mining claims were staked to cover available open ground along this contact. This resulted in the claim group being enlarged by 704 ha (about 70%) from 1,024 ha to 1,728 ha and a doubling of the contact zone now controlled by King’s Bay Gold.

 

A new, gold-bearing vein / shear zone was discovered approximately 50m east of the original Galbraith “A” blasted pit showing.  The vein is about 180m long, up to one metre wide, boudinaged / sheared, and gold-bearing in a WNW-ESE trending shear zone in mafic volcanic rocks. In the new shear zone, the fine-grained, sugary texture of the quartz and the intermittent hematitic red staining are similar to that which occurs in the quartz veins on surface at the Wagg gold occurrence located approximately 1 kilometre south of the Galbraith “A” occurrence. However, the Galbraith “A” quartz vein, in 2 dimensions at surface is comprised of a strongly boudinaged and sugary-textured quartz vein of up to 1 metre in width with intermittent red hematite staining in a shear / fault zone. This sugary quartz and red coloration also mimics what is also found at the Wagg Occurrence. It also pinches and swells, and, in places pinches out altogether. Where this happens, following the zone of shearing leads us to more sugary-textured quartz with intermittent red hematitic staining.

 

Red, sugary-textured quartz also occurs in a quartz vein swarm found at about the 73 metre depth mark in the -45 degree, 152.4 metre-long hole identified as Gal-A-11-03.  When projected to surface, this quartz vein swarm is located approximately 41 metre horizontally NE from the above mentioned gold-bearing quartz vein in the shear zone.

 

After further excavator work (pictures are available on the company’s website at http://www.kingsbaygold.com/properties/menary-twp/ ) and the washing of trenches in the area, smoky quartz was found in some felsic dykes in the Galbraith “A” area.

 

A total of 34 grab samples were taken at various points along this newly discovered shear system with a width of up to 4 metres and a length of over 150 metres long on surface. The assay results obtained from wall rock and quartz vein grab samples ranged from a low of <0.005 g/t Au to a high of up to 40.52 g/t Au. The most significant gold values, in grams per tonne, are as follows:  1.26, 1.98, 4.17, 4.71, 6.37, 11.14, 22.24, and 40.52. These grab samples are selective by nature and are unlikely to represent average grades for the deposit.

The 34 grab samples from the newly discovered shear zone were processed and analyzed by Accurassay Laboratories Limited located in Thunder Bay, Ontario. Accurassay Laboratories is an ISO-Certified laboratory that performed the gold fire assays with AAS finish following assay code ALFA1 using 30 grams of rock after it has been crushed and powdered.

James Rogers, King’s Bay Gold’s Chairman, stated on October 26th, 2011: “This discovery of another vein system with mineralization and alteration that look identical to the Wagg showing is very exciting. I am optimistic that King’s Bay Gold’s systematic approach to field exploration may uncover new economic opportunities for discovery”.

On December 12th, 2011 the Corporation reported that it had received additional channel sample results from its Menary Gold Project. The channel samples, mainly one metre in length, were taken, nominally at 2 metre intervals, at various points along approximately 181 metres of the newly discovered shear system that has a width of up to 4 metres and a length of over 200 metres long on surface.

 

The assay results obtained from wall rock and quartz vein combined channel samples ranged from a low of <0.005 g/t Au to a high of 243.00 g/t Au and averaged 3.39 g/t Au. The top 30 most significant gold values from the 146 channel sample results received and reported to date, in grams per tonne, as seen in the table below, are as follows:  243.00, 45.38, 18.20, 17.97, 14.82, 14.78, 14.21, 12.94, 12.70, 9.47, 8.30, 8.21, 7.53, 6.31, 6.30, 4.75, 4.33, 4.06, 3.34, 3.17, 2.37, 2.34, 1.87, 1.64, 1.55, 1.52, 1.51, 1.47, 1.46 and 1.41.

 

Distances are from the initial NW starting point (i.e., Nail #1). The following table contains all 63 channel samples having a gold grade of 0.090 g/t or better from the 146 samples collected from the quartz-bearing shear zone.

 

Distance Sample # Gold (g/t) Length(m)     Distance Sample # Gold (g/t) Length (m)
10.2m NW 1014736 0.090 0.5m 87.8m SE 1014585 2.340 1.0m
9.1m NW 1014735 0.788 0.5m 88.7m SE 1014588 0.566 1.0m
7.0m NW 1014734 1.639 1.0m 92.9m SE 1014596 0.090 1.0m
4.1m NW 1014733 243.000 1.0m 98.5m SE 1014597 2.365 1.0m
6.3m SE 1014505 0.897 1.0m 100.1m SE 1014598 1.546 1.0m
9.5m SE 1014509 3.341 1.0m 102.8m SE 1014599 1.470 1.0m
11.2m SE 1014511 0.319 1.0m 104.7m SE 1014600 14.817 1.0m
12.4m SE 1014513 0.107 1.0m 106.5m SE 1014601 6.311 1.0m
14.1m SE 1014515 3.170 1.0m 107.8m SE 1014602 0.146 1.0m
16.7m SE 1014519 0.678 1.0m 112.6m SE 1014604 0.456 1.0m
19.0m SE 1014522 4.328 1.0m 115.0m SE 1014606 0.109 1.0m
21.4m SE 1014523 0.495 1.0m 117.1m SE 1014607 1.458 1.0m
23.7m SE 1014524 0.941 1.0m 118.6m SE 1014608 1.290 1.0m
28.0m SE 1014526 1.058 1.0m 120.8m SE 1014609 17.966 1.0m
29.5m SE 1014527 0.621 1.0m 121.9m SE 1014610 9.473 1.0m
30.5m SE 1014528 0.097 1.0m 123.6m SE 1014611 8.302 1.0m
32.6m SE 1014529 0.674 1.0m 126.9mSE 1014750 12.703 0.5m
34.3m SE 1014532 0.378 1.0m 127.9m SE 1014751 12.936 0.5m
36.2m SE 1014534 0.511 1.0m 128.8m SE 1014753 1.518 0.5m
39.1mSE 1014536 0.586 1.0m 131.6m SE 1014754 4.747 0.5m
40.6mSE 1014537 14.779 1.0m 133.5m SE 1014755 0.560 0.5m
42.0m SE 1014539 0.243 1.0m 136.4m SE 1014613 45.379 1.0m
45.1m SE 1014541 1.000 1.0m 137.3m SE 1014614 1.867 1.0m
45.1m SE 1014543 0.252 1.0m 139.7m SE 1014615 18.204 1.0m
47.1m SE 1014544 0.117 1.0m 141.3m SE 1014616 0.805 1.0m
49.5m SE 1014547 0.105 1.0m 143.4m SE 1014618 0.090 1.0m
72.6m SE 1014564 1.171 1.0m 145.3m SE 1014619 6.301 1.0m
74.3m SE 1014565 1.508 1.0m 146.4m SE 1014620 1.407 1.0m
77.0m SE 1014567 0.459 1.0m 148.6m SE 1014621 0.666 1.0m
80.7m SE 1014571 8.205 1.0m 149.8m SE 1014622 14.209 1.0m
82.1m SE 1014573 0.567 1.0m 150.2m SE 1014623 4.057 1.0m
85.7m SE 1014582 7.525 1.0m

 

The channel samples from the Quartz Vein Shear Zone and as reported in the above table were processed and assayed by Accurassay Laboratories located in Thunder Bay, Ontario Accurassay Laboratories is an ISO-Certified laboratory that performed the gold fire assays with AAS finish following assay code ALFA1 using 30 grams of rock after it has been crushed and powdered.

Results for the remainder of the samples will continue to be released as they are received and reviewed by the company’s on-site geologist, Mr. Russell Crosby, M.Sc., P.Geo., who is acting as the Qualified Person (QP) for this project in compliance with National Instrument 43-101.

Menary Gold Project – Wagg Tailings Pond

 

In the 1990’s, Western Troy Capital Resources Inc. processed approximately 907 metric tonnes (1,000 short tons) of quartz vein material through a small mill erected from the six known gold-bearing quartz veins (A-F) at the Wagg gold showing. They reported recovering 346 ounces of gold and deposited the tailings in a depression adjacent to the mill. They reported an overall historical grade of 10.73 g/t at that time from the approximately 1,000 tons of material that was processed.  Tailings from the mill were collected in a small pond nearby. This historical data has not been verified. Source: Ontario Ministry of Northern Development and Mines Assessment Files, verified by Russell Crosby, M.Sc., P.Geo.

During the summer and fall of 2011, King’s Bay Gold collected 74 samples from the tailings pond to determine what, if any, gold may be present in these tailings.  Assay results obtained to date range from a low of 1.00 g/t to over 116.20 g/t and have an average of 4.28 g/t.

The 74 samples that were taken from the tailings pond during the summer of 2011 were also processed and analyzed by Accurassay Laboratories in Thunder Bay, Ontario using 30 grams of sample, the fire assay method, and an AAS finish following Accurassay Assay procedure code ALFA1.

Menary Gold Project – Wagg Mill Feed Pile

 

On December 19th, 2011, the Corporation reported in a news release that a total of 54 grab samples of red hematite-stained sugary quartz, taken from the mill feed pile near the former mill site at the Wagg occurrence, averaged 14.2 g/t Au. The mill feed consists of a mixture of rocks milled from the six Wagg veins as located nearby in an area of approximately 200 metres by 100 metres. The assay results obtained from these 54 grab samples ranged from a low of <0.005 g/t Au to a high of up to 151.892 g/t Au.

 

The company may consider adding the mill feed and tailings pond left by Western Troy to be processed at the time of their bulk sample to increase the profitability of the bulk sample. It is noted that grab samples as found in the table below are selective by nature and are unlikely to represent average grades for the deposit.

 

Of the 54 samples collected from the mill feed pile, the following table lists the 36 most significant gold grades obtained:

 

KBG Sample # Au (g/t)    KBG Sample # Au (g/t) 

1014692

151.892

1014679

4.668

1014684

132.821

1014673

3.965

1014694

95.030

1014707

3.209

1014686

58.430

1014695

2.729

1014704

54.374

1014699

2.655

1014709

46.721

1014676

2.335

1014678

38.785

1014682

2.323

1014660

32.189

1014714

2.212

1014662

24.537

1014670

1.713

1014706

22.679

1014657

1.578

1014703

19.850

1014680

1.352

1014687

15.605

1014702

1.067

1014698

10.347

1014669

1.040

1014701

5.974

1014693

0.763

1014689

5.910

1014685

0.494

1014705

5.884

1014671

0.484

1014691

5.613

1014708

0.410

1014690

5.202

1014712

0.398

All 54 grab samples from the mill feed pile near the former mill site at the Menary Wagg showing were processed and assayed by Accurassay Laboratories located in Thunder Bay, Ontario. Accurassay Laboratories is an ISO-Certified laboratory that performed the gold fire assays with AAS finish following assay code ALFA1 using 30 grams of rock after it has been crushed and powdered.

Menary Gold Project – Geophysical Surveys & Mapping

Magnetic and electromagnetic (HLEM) surveys were carried out along cut gridlines over the 5 central claims of the Menary Gold Project claim group (Claim numbers 4256397, 4205640, 3014054, 1079876 & 4247110).

 

About half of the area of the Menary Gold Project claims group has been mapped and prospected.

 

Option Agreement to acquire 2 claims on the Galbraith B gold occurrence

 

On May 7th, 2012, the Corporation announced the acquisition of the Galbraith B gold occurrence via an option agreement with Perry English, on behalf of Rubicon Minerals Corporation, as the vendor. The two new claim blocks (4271600 & 4271601) of 16 units each cover approximately 518 hectares and sit to the southeast of, and are contiguous to, the existing Menary Gold Project claim group.

 

Galbraith B gold occurrence is located within the westernmost of the two newly optioned claims and is approximately 200 metres to the east from the claim line of the original group. The narrow vein / stringer in the greenstone unit within which native gold was observed at Galbraith B assayed 97.5 g/t (2.859 oz/ton) and 63.70 g/t (1.868 oz/ton) gold from grab samples obtained in 1991 by Western Troy Capital Resources Inc. (Wagg and Holmstead, 1991).

Another grab sample collected in 1991 from a 1 metre wide, weakly sheared zone hosting several narrow quartz stringers (sample number 17829) located about 350 metres south-southeast of the Galbraith B, assayed 1.146 g/t (0.033 oz/ton) gold. Many other relatively small veins and pods occur within a few hundred metres of the Galbraith B showing, some of which returned gold values ranging from 0.10 g/t (0.0003 oz/ton) to 3.52 g/t (0.103 oz/ton).

 

As both this zone and the Galbraith B vein strike about east-west, further work in the area by King’s Bay Gold will pay particular attention to all of those structures on the project that crosscut the northeasterly trend of the metavolcanics in the Rainy River Greenstone Belt.

 

Under the terms of the option agreement, King’s Bay Gold can earn a 100% interest in the claims by completing payments to the Vendor totaling $ 69,000 over 4 years and the issuance of 500,000 common shares as follows:

 

Upon signing of the Agreement                                                        $   6,000                                250,000 common shares

1st Anniversary of the Agreement                                                     $ 10,000                                250,000 common shares

2nd Anniversary of the Agreement                                                    $ 12,000

3rd Anniversary of the Agreement                                                    $ 16,000

4th and Final Anniversary of the Agreement                                     $ 25,000

 

The issued shares shall be subject to hold periods as required by the applicable policies of the TSX Venture Exchange Inc. and applicable securities laws. The vendor will retain a 2.0 % Net Smelter Return (the “NSR”) interest in the Property. King’s Bay Gold can buy back one half or 1% of the “NSR” at any time by paying the vendor $1,000,000 CDN dollars.

Kyle Picard, King’s Bay Gold’s President & CEO, stated “We believe that the Menary Gold project is a large system with all the current showings being fed by the same system. Securing the claims with the Galbraith B high grade gold occurrence will prove to be paramount in proving this theory.”

Menary Gold Project – Qualified Person’s Statement

 

All of the drilling and field work on this project has been supervised by the Company’s on-site geologist, Mr. Russell Crosby, M.Sc., P.Geo., acting as the Qualified Person (QP) in compliance with National Instrument 43-101. Mr. Crosby has reviewed the technical disclosure in all of the Menary related news releases since May 11th, 2011.

 

Menary Gold Project – Work Completed to date and Contemplated for the remainder of 2012

 

President & CEO Kyle Picard stated on February 29th, 2012: “The Spring of 2012 will see a renewed focus on the high grade results at the Menary Gold Project along with moving forward on an aggressive plan to develop our 100% owned Sturgeon Lake high grade gold project. With two (100% owned and operated) high grade gold projects under development and two high grade gold projects being developed with partners in 2012 (Headway & Cameron Lake), King’s Bay Gold is positioned for an exciting year ahead.”

 

On May 2nd, 2012, the Corporation announced in a news release that a spring work program of excavator trenching, washing, sampling and assaying was commencing at the Menary Gold Project. At the very end of the 2011 trenching program, King’s Bay Gold discovered some reddish, sugary looking quartz veins within the granite, that may indicate the edge of a potential stockwork system of veins in the granite of the multiphase Sabaskong Batholith south of the Galbraith A shear zone and north of the Wagg showing.  It is the red to pink hematitic, sugary quartz that carries the gold at both the Wagg and Galbraith A areas. This first round of trenching, washing, sampling and assaying for 2012 will be targeting two areas: 1) the granites between the Galbraith A and Wagg showings over a distance of 900 metres to test the theory of the presence of a larger stockwork system of veins, and 2) the greenstones on the east margin of the Sabaskong Batholith, to test a magnetic high directly east of the Wagg showing.

 

Recommendations for next steps on the property include excavator trenching to the north of the Wagg prospect and to the south of the Galbraith “A” prospect to determine continuity between the two.  Linecutting, geological mapping and prospecting is also recommended over the 6 newly staked claims at the Menary Gold Project.

Recommendations for next steps at Galbraith “A” includes closely spaced diamond drilling at the gold bearing quartz vein in the shear zone.

 

Spring & Summer 2012

Trenching, Mapping, Sampling, Geophysical Interpretation              $145,000
Airborne Geophysics & Lidar                $85,000
Soil Sampling & Assay              $127,000


Fall 2012 – Diamond Drilling, Logging, Mapping, Sampling, Geophysical Interpretation                                $225,000

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