Sanatana Resources Inc. - Watershed Project

Watershed Project

Sanatana Resources Inc. has recently entered into an option and joint venture agreement with Augen Gold Corp. Under the terms of this agreement, Sanatana has paid C$150,000 and issued 2,000,000 shares to Augen. To earn a 50% interest in the property, Sanatana has committed to spend a total of C$5,000,000 on exploration within the Property and issue a further 3,000,000 shares to Augen on the following terms:

By March 23, 2012, exploration expenditures of C$1,000,000 and issuing to Augen 1,500,000 shares in Sanatana;
By March 23, 2013, exploration expenditures of C$1,500,000 and issuing to Augen a further 1,500,000 shares in Sanatana;
By March 23, 2014, exploration expenditures of C$2,500,000.

Upon fulfilling all of the above criteria, Sanatana will have the right to earn a further 1% interest (for a total interest of 51%) in the property by completing and delivering to Augen a pre-feasibility study on or before the fifth anniversary of the agreement. Also, for the life of the option and joint venture agreement, Augen will have the option to purchase up to 10% of any securities issued in any future equity offerings by Sanatana, on the same terms and conditions of such offering. As well, Sanatana has the right of first refusal on a group of nine mineral claims that lie directly north of Coté Lake (see map below for details).

Click to enlarge

The geological setting of the property comprises structurally complex mafic to felsic metavolcano-sedimentary supracrustal successions intruded in places by granodiorite to diorite rocks of the southern Swayze Greenstone Belt, comparable to that of the Timmins gold camp. As such there is potential to find greenstone hosted mesothermal gold mineralization and there are several historical high grade gold mineralized showings within the claims area. The recent discovery of the nearby Coté Lake "Archaean porphyry like" gold deposit by Trelawney Mining and Exploration Inc. ("Trelawney") provides a new exploration target model within the property area. Regardless of whether the Coté Lake discovery signifies a new deposit type or not, the overall characteristics of the deposit make it a legitimate exploration target in any geological terrane. The Watershed property mineral claims are located both along strike and across section from the Trelawney Coté Lake discovery and contain the same host rock sequence. During the 2011 field season to date Sanatana has completed field exploration programs including:

Airborne ZTEM geophysical survey of the entire property.
Prospecting and geological mapping of key parts of the claims area.
Earthprobe IP ground geophysics over high interest areas defined by the mapping and sampling.
Outcrop stripping and sytematic geochemical bedrock channel sampling over IP anomalies.

Currently a 2,500-metre five-drillhole diamond drilling program is underway targeting anomalous IP and surface geochemistry in the Clam Lake area considered to be directly related to the Coté Lake mineralizing system.

The technical information contained on this page has been reviewed and approved by Troy Gill, P. Geo, Exploration Manager of Sanatana Resources Inc., a qualified person as defined by National Instrument 43-101.