Trelawney hits more gold in step-out program (May 10, 2010)

VANCOUVER — The latest drill results from Trelawney Mining and Exploration’s (TRR-V) Chester project in northern Ontario hit more long gold intercepts at its new Cote Lake target.

In January, the company announced it had cut 136 metres grading 1.16 grams gold per tonne in an area about 1 km southwest and along strike from the former Young Shannon gold mine and 3 km west of the historic Chester mine.

Since then, Trelawney has focused exploration at Cote Lake with 22 holes completed so far. The company’s drill program continues to outline wide zones of mineralization hosted within breccias, a contrast to the quartz-rich veins found elsewhere at Chester.

Most recently, hole 9 cut 190.7 metres grading 1.88 grams gold starting 95 metres downhole and included 1.9 metres grading 50.23 grams gold. From the same collar, hole 10 hit 230.6 metres averaging 0.88 gram gold starting 57 metres downhole, including 45.5 metres carrying 2.21 grams gold.

Hole 8, collared roughly 50 metres west, returned 114 metres carrying 0.97 gram gold starting 68 metres downhole and included 24 metres averaging 3.33 grams gold.

The latest results come from a section about 100 metres east of where the company reported 107 metres of 8.2 grams gold in March.

The results from Cote Lake delineate two wide, sub-parallel zones of mineralization that dip moderately to the north. The upper breccia zone hosts disseminated pyrite and chalcopyrite, with copper grading up to 0.17%. In the lower breccia zone there is less chalcopyrite. Within both zones the gold grade regularly ranges up to 2 grams and visible gold is often noted in higher-grade intervals.

Trelawney has wasted no time in translating good drill results into healthy financing. The company recently completed a $15-million private placement that was originally slated to be $8 million. Roughly 15 million shares were issued at a price of $1.05 per share.

The Chester project is 20 km southwest of Gogama, Ont., roughly between Timmins and Sudbury. The area has seen extensive exploration but divided ownership hindered proper development. Trelawney managed to put together a consolidated land package and is now advancing the Chester mine towards development as well as exploring elsewhere on the property.

The Chester mine already has a decline to the 150-metre level, more than 700 metres of drifting and 100 metres of raises from historic development, but the only mining that took place was a small bulk sample.

Trelawney recently agreed to purchase much of the infrastructure needed to develop a production-ready camp at Chester, including a surface and underground electrical distribution system, a ventilation and mine air heat system, compressors, a furnished warehouse and an equipped workshop, an office, first aid equipment and various pieces of mobile machinery.

The company has varying degrees of ownership on a number of other properties in northern Ontario but is focusing on Chester.

Trelawney has a 52-week trading range of 7¢-$1.35 and 84 million shares outstanding.