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Agnico-Eagle Mines Ltd. Options Swanson Gold Project, Phoenix Advances Bottle Creek Gold Project

Posted on: Tuesday, 14 February 2006, 09:00 CST

Phoenix Matachewan Mines Inc. (TSX VENTURE:PMM) announced today it has entered into an agreement with Agnico-Eagle Mines Ltd. ("Agnico"), whereby Agnico has the option to purchase the Swanson gold ore body ("Swanson") from Phoenix. The property is located 65km north of Val D'Or, northwestern Quebec

In November of 2003, PMM received the results of an updated, NI 43-101 compliant, resource estimate on Swanson prepared by Martin Bourgoin, P. Geo. As previously reported in Phoenix Press Release dated August 25 2003, a diamond drilling program was conducted during the summer on the North and South zones of the Swanson gold deposit that returned notable intersections of gold mineralisation. The results of the diamond drilling were incorporated into a Gemcom model of the deposit to produce an updated resource estimate at a 1.5g/t gold cut-off.

The updated resource estimate at a 1.5g/t gold cut-off now stands at 421,564 tonnes grading 3.26g/t gold in the measured category and 687,078 grading 3.11 g/t gold in the indicated category. The measured category contains 44,185 ounces of gold and 68,700 ounces of gold is contained in the indicated category, for a total of 112,885 ounces of gold to 200 metres, and open to depth.

Under the terms of the option agreement Agnico will pay $125,000 to Phoenix upon signing the option agreement. Agnico also undertakes to conduct a minimum of $400,000 of exploration prior to the first anniversary, which work is expected to start immediately after signing the final agreement at the end of February. Agnico will pay $500,000 to Phoenix should it decide to continue with the project beyond 28 February 2007. Phoenix Matachewan will retain a 1% NSR on the project and will receive an additional $25/oz royalty on all gold produced from the project between 25,000 oz and 100,000 oz. A further 2% NSR on the Swanson Project is held by Barrick Gold Corporation.

Phoenix Matachewan will use the proceeds from the option agreement with Agnico to advance its very promising Bottle Creek Project, located in prolifically gold endowed northern Nevada. The core of the Bottle Creek system lies beneath past producing, high-grade mercury mines that are interpreted to be the surface manifestation of a mineralizing system capable of depositing gold and silver. Results of historical and current rock, soil and vegetation geochemical work indicate that the region displays several well-defined zones of anomalous gold, silver, selenium, antimony, arsenic and mercury and lower but anomalous molybdenum, copper, lead and zinc content. Where tested, some of these zones have distinct IP anomalies as well. These anomalies, coupled with strongly clay-altered and brecciated rhyolite and basalt host rocks indicate that Bottle Creek fits into a distinct class of low-sulfidation epithermal gold mineralization that includes the Ken Snyder (2.39 M oz gold), Mule Canyon (1.43 M oz gold) and the nearby Sleeper (1.68 M oz gold) deposits. During 2005 Phoenix conducted additional geophysical, geochemical and geological surveys and is in the process of permitting 14 drill sites. Diamond drilling is anticipated to begin late in the first quarter of 2006.

Paul L. Jones, P. Geo., is the qualified person for PMM.

"The statements in this Press Release may contain forward looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. The TSX Venture Exchange has not approved or disapproved of the information contained in this Press Release."

Phoenix Matachewan Mines Inc. (TSX VENTURE:PMM)

Source: Business Wire

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