TORONTO, ONTARIO, August 13, 2013 - Rainbow Resources Inc. (TSX VENTURE:RBW) (OTCQX:RIINF) ("Rainbow" or the "Company") is pleased to announce that it has completed a comprehensive review of all available technical data associated with its Jewel Ridge property near Eureka, Nevada. This review has permitted the Company to identify several promising drill targets on the property that should be followed up on. It is anticipated that a significant portion of the funds received from the current private placement offering can be directed towards a reverse circulation drilling program at Jewel Ridge later this fall.
Background - The Jewel Ridge property is located ~5 miles south of the town of Eureka, Nevada and falls within the Battle Mountain-Eureka Trend, one of several trends across Nevada characterized by world-class sediment-hosted disseminated gold deposits. The 1,510 acre (611 hectares) Jewel Ridge property is located between the operating Barrick Gold-owned Ruby Hill mine to the north and the advanced-stage exploration project Lookout Mountain to the south, owned by Timberline Resources.
A number of historic workings exist both within the Jewel Ridge claim blocks as well as in the adjacent claims to the north and south. Some of the larger historic mines in the claim blocks include the Hamburg, the Peroni, the Croesus, and the Eureka (See Figure 1 attached). Based on historical records it is estimated that these mines produced approximately 35,000 ounces of gold equivalent during the period 1871 to the 1920's.
Geology - The Eureka Mining District consists of Early Cambrian through Permian carbonates, shales and quartzites, overlain by Eocene to Oligocene volcanics and intruded by several units in the Late Mesozoic and Tertiary. Typical of Central and Eastern Nevada the entire sequence has been folded and faulted a number of times between the Pre-Cambrian through the Tertiary. Two similar but distinct styles of mineralization have been identified within the Jewel Ridge claim block:
1.Irregular polymetallic replacement bodies primarily isolated to the northern part of the property near the historic Croesus and Eureka mines and,
2.Bedded replacement disseminated gold bodies to the south near the Peroni and Hamburg mines.
These two types of deposits seem to have been the most productive within the Eureka Mining District as a whole.
The units of particular interest within the stratigraphic package at the Jewel Ridge property include the Cambrian Hamburg Dolomite and the Cambrian Dunderberg Shale. These units have been heavily folded and faulted, resulting in a steep eastward dip to the contact. Gold mineralization is hosted within the Hamburg dolomite, and is generally associated with dissolution-collapse breccias along faults or other structures. Alteration associated with the deposits is similar to that of other disseminated gold deposits - decarbonatization, argillic alteration, and silicification/development of jasperoids.
Technical Review and Analysis - A data base comprising 383 drill holes with gold assay values was assembled from various past reverse circulation drilling programs on the property summarized as follows:
-1975 - 1983 (Peter Galli)
-1984 - 1985 (Norse - Windfall)
-1992 - 1999 (Homestake)
-2004 - 2007 (Greencastle)
The information in this data base was utilized to construct a Leapfrog Mining model that enabled Rainbow to identify two zones with potential quantities and grades that could warrant further exploration. A 7.5 minute DEM of the Pinto Summit was used as an elevation map, and the USGS geologic map by Nolan (1972) was used as the geologic map overlay. A structural control was placed at ~350 degree azimuth with a 60 degree dip to the east to reflect the contact between the Hamburg Dolomite and the Dunderberg Shale, as mapped by Long et al (2012).
Gold bearing shells were generated in oz/ton Au, reflective of the assay data values using thresholds of 0.005 oz/ton, 0.01 oz/ton, and 0.03 oz/ton (0.14, 0.28, and 0.85 grams/ton) respectively. The highest assay value within the available drill hole data is 0.48 oz/ton Au (15.0 grams per ton). The resulting model indicates a series of ellipsoid pod-like gold bearing zones locally stacked that can be generalized into two zones of mineralization in the Windfall Canyon, below the Hamburg Pit (South Zone) and between the Connolly Mine and the Eureka Tunnel (North Zone). Further review showed that all of these regions lie along the contact between the Hamburg dolomite and the Dunderberg shale. A range of tonnages and grades associated with these two zones was calculated as shown in Table 2 below, providing Rainbow with considerable encouragement to continue exploration on the property. The potential quality and grade associated with these quantities is conceptual in nature and there has not been sufficient exploration to define a mineral resource. Furthermore, it is not certain that additional exploration will result in the target being delineated as a mineral resource. Further details, including plan and sectional views generated by the model can be obtained by visiting the Company's web site, www.RainbowResourcesRBW.com.
Follow-Up - Based on the technical review performed, the Company has decided to proceed with further exploration drilling as soon as appropriate funding is available. The program will be designed to focus on three targets identified from the review:
1.Step-out drilling along strike of the contact between the Hamburg Dolomite and the Dunderberg Shale. The presence of the operating Barrick Ruby Hill mine to the north and the late-stage exploration Timberline Resources project to the south clearly indicates some lateral continuity in exploration potential.
2.Twinning a representative number of holes in order to verify the integrity of historic drill hole data, especially those falling along the contact.
3.Selective drilling in the area of historic workings, particularly the recently acquired Croesus claims as there may be additional exploration potential to be discovered.
Mr. Jim Decker, P. Eng., director of Rainbow Resources Inc. and a Qualified Person as defined by National Instrument 43-101, has reviewed the contents of this news release.
For further information: President David W. Johnston - (403) 701-2781.
Visit our website at www.RainbowResourcesRBW.com
About Rainbow Resources:
Rainbow is a Canadian based junior exploration company focused on building shareholder wealth through aggressive exploration in two favourable and proven mining jurisdictions - the West Kootenays in southeast British Columbia (silver, gold and flake graphite), and Nevada where Rainbow's Jewel Ridge gold-silver project is in the heart of a major producing district. Rainbow's shares are listed for trading on the TSX Venture Exchange under the symbol RBW.V, and on the OTCQX International under the symbol RIINF. Rainbow currently has 45,720,052 common shares issued and outstanding.
Figure 1 - Drill Holes & Gold Bearing Zones
To View Map Image, please copy and paste URL below into a new browser:
Caution Regarding Forward-Looking Information
This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, future work programs and objectives and expected results from such work programs. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks,(more)uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information and the risks identified in the Company's continuous disclosure record. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information.
All forward-looking information contained in this news release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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 of this news release.