St. John’s, Newfoundland and Labrador: Red Moon Resources Inc. (“the Company” – “Red Moon” TSX-V: RMK), announces that it is advancing the Ace gypsum deposit towards production in western Newfoundland. The Ace deposit is part of the historic Flat Bay open pit gypsum mines which produced a reported 15,000,000 tonnes from the 1950’s until production ceased in 1990. Based on historical reports, drilling data, geophysics and field mapping by the company the gypsum resource was not exhausted, but rather significant potential resources remain. The company has compiled and digitized 448 historical diamond drill holes and estimates that the potential remaining gypsum resources contained adjacent to past producing deposits and surrounding exploration zones of the Flat Bay gypsum deposit may be in the range of 30,000,000 to 40,000,000 tonnes on its mineral licences. This estimate is conceptual in nature and is not a defined mineral resource as set out NI 43-101 Standards of Disclosure for mineral projects. The estimate will require confirmatory drilling to verify historic results and account for varying stripping ratios and detailed chemical analysis to determine commerciality in the current market conditions.
Based on the identification of potential markets for gypsum, the Company has applied for a mining lease from the government of Newfoundland and Labrador on the Ace deposit. This deposit was partially mined by a previous operator and covers approximately 12 hectares. The company estimates that the potential resources within the mining lease are between 3 and 5 million tonnes based on 3D modelling of historic drilling, mapping and test pits. Again, this estimate is conceptual in nature at this stage and is subject to the same limitation as cited above regarding NI 43-101. The markets for gypsum are primarily in the wall board and cement business based on negotiated contracts. With the increasing switch from coal to natural gas fired power generation plants in the United States the supply of synthetic gypsum produced by sulfur dioxide scrubbers in power plant smoke stacks has been significantly reduced. As a result, an increase in demand for natural gypsum has emerged. In the eastern Canadian market gypsum currently sells on average for approximately $15 per tonne FOB mine site. It is projected, based on favourable market demand and product specifications, that the Ace deposit could ramp up to a production level in excess of 500,000 tonnes per year as customers are established. There is ample opportunity to expand the lease if demand warrants it. Gypsum is mined by traditional open pit methods, which are amenable to scaling of production to meet the demand cycle. A deep-water port connected by a haulage road is located approximately 9 kilometers from the proposed pit. Contract mining services are available in the area and the Company has initiated discussions to avail of these services. The project is situated off a paved road approximately 6 kilometers from the Trans Canada highway and 20 kilometers from the local service center of the Town of Stephenville.
The company is planning a financing this Fall to acquire the additional funds necessary to bring the Ace gypsum project into production. The company will provide updates on the progress of this development as they occur.
Patrick Laracy, President and CEO commented “As we push forward on bringing our flagship Captain Cook salt project forward we are encouraged by the development potential at the Ace deposit which we have identified both from a resource and market perspective. This project has a much shorter timeline to production than salt given that gypsum mining is an open pit operation in a brown field site with modest upfront capital costs.”
Please refer to www.redmoonpotash.com for further information about the Company’s projects. Patrick J. Laracy, P. Geo, President, and Patrick Collins, P. Geo. are qualified persons responsible for the contents of this news release as defined in National Instrument 43-101.
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Red Moon is an industrial minerals exploration and development company which in addition to its gypsum assets is advancing the Captain Cook salt deposit towards development in Western Newfoundland. Vulcan Minerals Inc. (TSX.V: VUL) owns approximately 67% of the common shares of Red Moon.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release may contain certain forward-looking statements. Actual events or results may differ from the Company’s expectations. Certain risk factors beyond the Company’s control may affect the actual results achieved. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except by law, the Company undertakes no obligation to publicly update or revise forward-looking information.
For information please contact:
Patrick J. Laracy, President