Pacific Iron Corporation Announces 2009 Exploration Program and Release of December 31, 2008 Financial Statements and Management Discussion and Analysis
Calgary, Alberta –(April 24, 2009) – Pacific Iron Ore Corporation (TSX VENTURE:POC), announces that it has filed its Financial Statements and Management Discussion and Analysis for the years ended December 31, 2008 and 2007. These documents are now available on SEDAR.Pacific Iron Ore Corporation also announces that today its Board of Directors approved the Corporations 2009 Exploration Program of approximately $2.0 million. This program will exceed the Corporation’s remaining flow through obligations and will focus on expanding the diamond drill program commenced in 2008 on the Pearson Project located on Vancouver Island and commence exploration activities on a number of its claims located in Ontario.
Mr. Todd Montgomery, President of Pacific Iron Ore Corporation stated that “We are very pleased with the results achieved from the 2008 Exploration Program that had a total cost of approximately $4.4 million.” During 2008, the Corporation completed a 51 hole diamond drill program and an airborne geophysical survey. The diamond drill program focused on the expansion and further delineation of previous exploration efforts in the Bugaboo Creek section of the Corporation’s properties and identified a number of significant drill intersections of iron skarn mineralization. Many of these intersections yielded average Total Fe values ranging from 41% to 65%. The identified intersections are predominantly composed of massive magnetite and commonly contain small percentages of iron sulphides and may contain small inclusions of pyroxene-garnet skarn, gabbro, marble and/or diorite. In addition, the airborne survey identified 17 zones of particular significance that have clearly defined geophysical signatures with respect to magnetic highs, magnetite-rich zones and the EM anomalies associated with these zones.
The core samples were provided to ALS Chemex, an ISO 9001 and ISO 17025 accredited facility located in North Vancouver, British Columbia, for analysis and processing and produced a number of significant drill intersections with high average iron assays. From these diamond drill cores approximately 1,000 samples were provided to B.C. Mining Research Ltd. for Davis Tube testing and further analysis which confirmed the Fe content. The airborne survey which was prepared by Fugro Airborne Surveys Corp. of Mississauga, Ontario (“Fugro”), covered approximately 7,783 line kilometers encompassing the Pearson Project and adjacent claims within the Port Renfrew Block on Vancouver Island, British Columbia.
Mr. Montgomery further commented that “the combination of the findings of the airborne survey and the diamond drill results has enabled the Corporation to focus its immediate exploration efforts on its high potential claims located in the Port Renfrew area and to engage Wardrop Engineering Inc., of Vancouver, British Columbia to prepare a resource estimate for the Bugaboo Creek Area located within the Pearson Project. The Corporation intends to spend approximately $1.5 million on additional diamond drill exploration activity in 2009 on the Pearson Project. This activity will focus on further delineation of the Bugaboo Creek section and will commence the exploration of both the Granite and Mai sections.”
St. Anthony’s Project
The St. Anthony’s project is located in Ontario and includes the Corporations 57 mining claims and 14 leases which are identified as the St. Anthony’s property, the Best property and the King Bay property. These claims cover a combined 9,056 hectares and management believes they may exhibit the potential for gold, silver and copper. To further define the potential for these claims the Corporation has engaged Mr. Graeme Evans to prepare an independent qualifying report compliant with the requirements of National Instrument 43-101.
Mr. Montgomery commented that “Pacific Iron Ore Corporation is indeed fortunate to have a man with Mr. Evans experience available for this project.” Mr. Evans holds a Bachelor of Science degree in Geology from the University of British Columbia and is a Professional Geologist. Over the past 27 years he has been involved in mineral exploration throughout Canada and the United States, spending the last eighteen years with Teck Cominco Limited. Mr. Evans has been the senior geologist on numerous precious metal and base metal projects and since 2004 he has been heavily involved in targeting potential gold projects in Ontario. The Corporation anticipates receiving Mr. Evans’ technical report in May 2009.
Separation Lake Project
The Separation Lake project is also located in Ontario and includes the Corporations 22 mining claims which are identified as the Separation property and Big Mack property both located in the Paterson Lake district. These claims cover a combined 2,864 hectares and management believes they may exhibit the potential for the rare metal pegmatites of Petalite (lithium). To further define the potential for these claims the Corporation has engaged Mr. J. Garry Clark P Geo, to prepare an independent qualifying report compliant with the requirements of National Instrument 43-101.
Mr. Clark holds a Bachelor of Science honors degree in Geology from Lakehead University and is a Professional Geologist. Over the past 26 years he has been involved in mineral exploration throughout Canada and overseas, with a number of exploration companies including Falconbridge, Falconbridge Copper, Noranda and Gulf Minerals. Mr. Clark also serves on various committees and boards that support the mineral explorers of Ontario including the Ontario Minister of Mines Mining Act advisory committee and the Ontario Geological Survey Advisory Board. The Corporation anticipates receiving Mr. Clark’s technical report in May 2009.
Mr. Montgomery further stated that “the Corporation anticipates spending an initial $0.5 million to evaluate the St Anthony’s and Separation Lake projects before seeking additional capital funding to implement the recommendations of the related 43-101 technical reports.”
During 2008 the Corporation generated interest revenue of $48,557 and incurred a net loss of $728,940 or $0.02 per common share. Its major expenses included general and administrative costs of $411,382, stock based compensation expenses of $139,780, the write-down of mineral properties surrendered by the Corporation of $426,621, and other expenses of $3,932. The Corporation also received the benefit of recognizing future income tax recoveries of $204,218 during the year.
General and administrative expenses totaled $411,382 in 2008 as compared to $215,092 in 2007, an increase of $196,290. In addition to the ongoing general administrative activities of the Corporation, Pacific Iron incurred additional administrative costs as a result of its efforts to structure the Corporation in a manner to enable it to raise equity in the public markets, expand its exploration activities and provide the appropriate administrative and regulatory support. In 2008, the major categories of expenditure included:
– Legal and accounting fees $237,564 ($102,426 in 2007). The increase in these expenses were associated with annual audit and review procedures, filing of tax returns, consulting services provided in the preparation of interim statements and regulatory filings and general corporate advisory services.
– Investor relations, corporate communication and security exchange fees totalling $26,379. No similar charges were incurred in 2007 as the Corporation’s common shares were not traded on a public market.
– Travel costs of $35,684 ($1,884 in 2007) incurred in transporting staff, advisors and investors to the Corporation’s principal mining properties.
– Consulting costs of $25,200 ($6,360 in 2007) relating to general management services provide to the Corporation which did not pertain to exploration or financial services.
– Office, rent and utility expenses of $35,886 ($37,335 in 2007) which increased as a result of establishing a site office in Port Renfrew, British Columbia as well as in Kenora, Ontario.
– Interest expenses and bank charges totalled which $11,839 ($46,319 in 2007) decreased as a result of lower accretion charges on non-interest bearing advances.
– Amortization of equipment of $14,061 ($9,563 in 2007).
– Other costs of $24,769 ($11,205 in 2007) related to the administration of the Corporation.
In light of current economic conditions and after completing a thorough evaluation of the Corporation’s capital resources and the 2008 Exploration Program, the Corporation decided to focus its future exploration activities on the high potential mineral claims identified in Ontario and on Vancouver Island. As a result a number of claims no longer exhibited sufficient qualities and resource potential to warrant further exploration. Consequently, claims not material to the Corporation’s prospects have been surrendered by the Corporation thus reducing the annual expenditures required to maintain the claims.
During the year ended December 31, 2008 the Corporation incurred $4,433,744 in capital expenditures as compared to $373,470 for the same period in 2007. In 2008 the Corporation incurred $733,190 ($157,503 in 2007) with respect to acquisition, staking, recording and filing costs associated with its British Columbia and Ontario properties and $3,574,918 ($214,879 in 2007) on deferred exploration costs, principally in British Columbia. Deposits on future exploration expenditures totaled $78,988 in 2008 ($nil in 2007). Miscellaneous equipment purchases in 2008 accounted for the remaining $46,648 in capital expenditures ($1,088 in 2007). These expenditures were incurred on Pacific Iron’s 2008 Exploration Program which included the acquisition and maintenance of certain mineral claims, an airborne survey of 7,783 line kilometers, the drilling and assaying of 51 diamond drill holes, ground magnetic and geochemical surveying, geological mapping, prospecting, staking and the internal assessment of available public data.
Pacific Iron has historically relied upon advances from its shareholders and the equity capital markets to raise sufficient funds to finance its mineral property acquisitions and exploration programs. In 2008 the Corporation began the year with a cash balance of $828,230 and a working capital deficit of $60,006, excluding cash. During the period, Pacific Iron acquired Klondike Capital Corp. and its net cash position of $246,617, received and repaid loans from its shareholders totaling $817,500, issued 8,979,000 flow through shares and 5,221,000 common shares for combined net cash proceeds of $5,954,685, received $69,396 in cash proceeds from the exercise of broker warrants and repaid shareholder advances created through the purchase of mineral claims totaling $27,500. These sources of capital were used to fund operations and invest in working capital and to finance its exploration activities. As of December 31, 2008 the Corporation has a cash and short term deposit balance of $2,174,847 and a working capital surplus, excluding cash and short term deposits, of $189,742 to fund its future activities, flow through obligations of $1,722,773 and repay shareholder advances.
Quality Control of Reported Results
The Pearson Project drilling program and aerial magnetic survey are being undertaken pursuant to the recommendations contained in the independent qualifying report dated October 31, 2007 and revised on February 13 and March 11, 2008 entitled “Technical Report – Pearson Project, British Columbia” (the “Qualifying Report”) prepared by an independent geologist, Mr. George Owsiacki, P. Geo. of Victoria, British Columbia. The Qualifying Report was prepared in contemplation of the requirements of National Instrument 43-101. A copy of the 43-101 Technical Report is available under the Corporations profile on SEDAR and can be accessed at www.sedar.com.
The core samples were provided to ALS Chemex, an ISO 9001 and ISO 17025 accredited facility located in North Vancouver, British Columbia, for analysis and processing. The samples taken from the core of the mineralized zone were analyzed initially using one of the following 2 geochemical procedures: (1) ME-MS41 – Ultra-Trace Level Methods using Inductively Coupled Plasma-Atomic Emission Spectroscopy (ICP-AES) followed by Inductively Coupled Plasma – Mass Spectrometry (ICP-MS); 2) ME-ICP41 – Inductively Coupled Plasma – Atomic Emission Spectroscopy (ICP – AES). Both methods provide Total Fe analysis with detection limits from 0.01% – 50% Fe. Geochemical procedure 1 provides analysis for a suite of 50 elements while procedure 2 provides analysis for a suite of 34 elements. For detection limits above 50% both methods are followed with assay procedure ME-OG46, a method used for the evaluation of ores and high-grade materials to be optimized for accuracy and precision at high concentration levels. In this method a prepared sample is digested in 75% aqua regia and later analyzed by inductively coupled plasma – atomic emission spectrometry (ICP – AES) or by atomic absorption spectrometry. These geochemical and assay techniques yield Total Fe percentage and are not meant as a final determination of recoverable magnetite. For determination of recoverable magnetite, a selection of core samples will be provided to B.C. Mining Research Ltd. for percentage magnetic (Davis Tube) testing. The results of the Davis Tube testing, when available to the Corporation, will be reported to shareholders at a future date and in a manner consistent with the requirements of National Instrument 43-101 entitled “Standards of Disclosure for Mineral Projects” as adopted by the Canadian Securities Regulators.
Mr. Garry Payie, P. Geo of Victoria, British Columbia, an independent geological consultant, is the Qualified Person on the Pearson Project under the guidelines of NI 43-101. Mr. Payie oversees the Corporation’s exploration program with respect to the Pearson Project and has reviewed and approved the technical disclosure contained in this press release relating to that project.
Corporate Direction and Strategy
Pacific Iron Ore Corporation is dedicated to the development of its iron ore deposits, located in the Port Renfrew area of Vancouver Island, British Columbia. With the success of the 2008 Exploration Program and the existence of sufficient capital resources to undertake additional exploration activities in 2009 the Corporation is well positioned to manage these difficult times. In order to maximize the returns on future exploration activity, the Corporation has initiated a detailed review of its claims located on Vancouver Island and in Ontario, with the intention of identifying other areas with similar potential to the Pearson Project.
For further information please refer to the Corporations profile on SEDAR which can be accessed at www.sedar.com or visit our website at www.pacificironorecorp.com.
Forward Looking Statements:
The TSX.V Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This release includes certain statements that may be deemed “forward looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserves potential, exploration drilling, exploration activities and events or developments that the Corporation expects are forward looking statements. Although the Corporation beliefs the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could cause results to differ materially from those in the forward looking statements include, but are not limited to: market prices; exploitation and exploration successes; continued availability of capital, financing and personnel; government regulation and laws; the Corporations relationship with First Nations; environmental developments; and general economic, market or business conditions. Investors are cautioned that such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements. For more information on Pacific Iron Ore Corporation, Investors should review the Corporation’s registered filings which are available at www.sedar.com.
Neither 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.
For more information, please contact
Pacific Iron Ore Corporation
(403) 262-4860 (FAX)
Pacific Iron Ore Corporation
Chief Financial Officer
(403) 218-0294 or 1-866-682-5812
(403) 265-2887 (FAX)