Malartic CHL Joint-Venture: New Results from the Mammoth Zone, Project Status and Outlook

VAL-D'OR, QUÉBEC-- Sept. 22, 2011 - Abitibi Royalties Inc. (TSX VENTURE:RZZ)(hereinafter "Abitibi Royalties" or the "Company") reports the latest results from drilling at the Mammoth Zone completed by joint venture partner Osisko Mining Corporation ("Osisko") during 2011. The results provide additional confirmation about the continuation of the South Barnat zone onto the joint venture property. In addition to those new results, Abitibi Royalties provides a summary of previous work together with a project outlook. This summary makes reference to 18 news releases issued over the past 4 years by Golden Valley Mines Ltd. (TSX VENTURE:GZZ)(hereinafter "Golden Valley"), the original holder of the property and which holds an approximate 66.34% interest in Abitibi Royalties.

New Results:

On September 9, 2011, Osisko Mining Corporation ("Osisko"), the majority interest holder of the property, reported new results from a drill program that was focused on the Barnat Extension (Mammoth) area (see the respective Osisko news release "Osisko intersects 1.32 g/t Au over 172 metres at Barnat South Extension"). The intersected new mineralization was located either within or immediately outside the currently designed engineered pit over the eastern portion of the Barnat deposit (see figure 3 http://media3.marketwire.com/docs/AR_Figure_3.pdf). Only assay results for drill holes within the perimeters of the Malartic CHL Joint Venture property as reported by Osisko are summarized in the table below:

Hole No. Section From (m) To (m) Length (m) Au g/t Au g/t
(uncut) (cut)
CHL11-2374 6500E 83.6 96.8 13.2 0.78 ---
CHL11-2375 6525E 64.7 89.9 25.2 1.67 ---
CHL11-2376 6500E 94.5 105.5 11.0 1.39 ---
CHL11-2377 6500E 84.0 119.3 35.3 1.11
CHL11-2378 6475E 83.3 116.0 32.7 0.99 ---
CHL11-2379 6450E 65.4 82.6 17.2 0.98
CHL11-2380 6450E 88.8 103.3 14.5 1.12 ---
CHL11-2381 6425E 65.5 91.0 25.5 1.50 ---
Including 76.5 78.0 1.50 10.50 ---

Osisko noted that the drill results indicate that mineralization from the Barnat Zone extends further East of the Eastern limit of the current pit design, towards the Jeffrey Zone on the Malartic CHL property.

Brief History of the Malartic CHL Property and the Joint Venture Formation

The claims were originally staked by Golden Valley (see figure 1: http://media3.marketwire.com/docs/AR_Figure_1.pdf and Golden Valley news release dated January 31, 2006 – Property Acquisition near the Canadian Malartic Mine). The property acquisition was followed in short order with the grant of an option to Osisko (formerly Osisko Exploration Ltd., for details see Golden Valley news release dated February 3, 2006 – Malartic CHL Prospect optioned to Osisko Exploration Ltd). The general terms of the option agreement were: Osisko had the right to acquire a 70% interest in the Malartic CHL Property in consideration for $150,000 in cash payments over a four year period and by completing a minimum $2,000,000 in exploration work over a four year period. Osisko would be the operator during both the option and joint venture phase. The agreement further provided that upon earning its 70% interest, Golden Valley Mines would retain a free carried 30% interest up to production. The agreement and all its rights were later assigned to Abitibi Royalties in contemplation of the completion of an arrangement pursuant to the Canada Business Corporations Act, between Golden Valley, the Company, and two other of Golden Valley's subsidiaries. Osisko has exercised the option to acquire a 70% interest in the Malartic CHL property and a joint venture is currently in effect on the property. Abitibi Royalties owns a 30% free carried interest in the Malartic CHL property.

Since the grant of the option to Osisko, Osisko has devoted considerable efforts to the joint venture property. Drilling statistics as extracted from Osisko's continuous disclosure documents document the progress made to date (see figure 2 http://media3.marketwire.com/docs/AR_Figure_2.pdf):

  • 2007 to 2009: 156 diamond drill holes for a total of 36,508m;
  • 2010: 140 diamond drill holes for a total of 27,457m;
  • 2011: 8 diamond drill holes for a total of 1,622m (based on results reported to date only).

Porphyry Intrusion, Shaft Zone and Porphyry 12 Zone

The Malartic CHL Porphyry Intrusion is a 260 metre by 450 metre porphyry intrusion located within the Cadillac fault. The intrusion hosts two known mineralized zones. The "Porphyry 12 Zone" is located along the southern margin of the intrusion, and the "Shaft Zone" is located at the northern margin of the intrusion. Further information and drill results were released in the following Golden Valley news releases:

  • June 20, 2007 - Osisko Drilling on Golden Valley's Malartic CHL Property;
  • August 7, 2007 - Osisko Intersects 8.4 m Averaging 8.8 g/t Au at Malartic CHL;
  • October 19, 2009 - Significant New Gold Mineralization Intersected on the CHL Porphyry Intrusion and Shaft Zone;
  • December 23, 2009 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone and CHL Porphyry Intrusion; and
  • February 04, 2010 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone & CHL Porphyry Intrusion.

Norrie Zone:

Historical drilling suggests that the Norrie Zone is a deep mineralized zone measuring at least 380 metres by 250 metres, located approximately 1500 metres east of the known eastern limit of the Canadian Malartic deposit. The zone straddles the boundary between the Malartic CHL property and the Canadian Malartic property. Examination of the historical drill core indicated that the mineralization is similar to that at the Canadian Malartic deposit (held by Osisko). One hole was drilled to test the "Norrie Zone", and additional information about this new zone of gold mineralization was released in the following Golden Valley news releases:

  • June 20, 2007 - Osisko Drilling on Golden Valley's Malartic CHL Property;
  • March 18, 2008 - Osisko Intersects 107m Averaging 1.47 g/t Au at Depth in Norrie Zone on Golden Valley's Malartic CHL Property; and
  • March 23, 2010 - Significant New Gold Mineralization Intersected from the Malartic CHL Prospect including 54 metres averaging 1.39 g/t Au.

Mammoth Zone:

The Mammoth zone is the eastern extension of the Barnat zone (see figure 3 http://media3.marketwire.com/docs/AR_Figure_3.pdf). On the Malartic CHL property drilling was completed every 25 metres over a strike length of 125 metres up to a depth of 100 to 150 metres for a total of 6 sections. First results were released in the following Golden Valley news releases:

  • February 04, 2010 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone & CHL Porphyry Intrusion; and
  • March 23, 2010 - Significant New Gold Mineralization Intersected from the Malartic CHL Prospect including 54 metres averaging 1.39 g/t Au.

Additional results in respect of the Mammoth zone were also detailed in the New Results section herein.

Jeffrey zone:

The Jeffrey zone is located some 800 metres east of the Mammoth zone. Approximately 425 metres of strike length were tested every 25 metres up to a depth of 250 metres for a total of 18 sections. The zone is open at depth and to the East and West and an initial resource estimate is anticipated to being completed shortly. Drill results from drilling completed between 2007 and 2010 have been released in numerous Golden Valley news releases:

  • October 29, 2007 - Osisko Outlines New Gold Zone at Malartic CHL Prospect;
  • April 17, 2008 - Osisko Intersects Significant Gold Mineralization Over 800 Metres Strike Length at Jeffrey Zone on Golden Valley's Malartic CHL Property;
  • September 10, 2009 - Golden Valley Mines Intersects Significant Near Surface Gold Mineralization and Depth Extension at the Jeffrey Zone ;
  • November 6, 2009 - 19,000m Definition Drill Program on the Jeffrey Zone. Osisko Reports Drill Program Now Underway on Malartic CHL Prospect;
  • February 04, 2010 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone & CHL Porphyry Intrusion;
  • May 13, 2010 - Significant Gold Mineralization Intersected in 25 Drillholes on the Malartic CHL Prospect. Results include 109 metres averaging 0.83 g/t Au;
  • May 27, 2010 - Significant Gold Mineralization Intersected on the Malartic CHL Prospect. Results include 73 metres averaging 2.51 g/t Au, with 66.1 g/t Au over 1.5 metres;
  • November 24, 2010 - Intersection of 72 metres grading 2.02g/t Au at the Jeffrey Zone;
  • February 28, 2011 - Canadian Malartic Style Mineralization Discovered at the Jeffrey Zone; and
  • June 14, 2011 - 63.6 Metres Grading 1.50 g/t Gold Intersected at the Jeffrey Zone, Malartic CHL Prospect.

Outlook:

Joint venture partner Osisko has advised the Company that an initial resource for the Jeffrey zone is expected to be released at the beginning of the fourth quarter of 2011, and exploration is expected to continue, prioritized as follows (see figure 2 http://media3.marketwire.com/docs/AR_Figure_2.pdf):

  • To test the new zone of "Canadian Malartic" type mineralization discovered just south of the Jeffrey zone;
  • To test the gap between Mammoth zone and Jeffrey zone (late 2011); and
  • To test the eastern extension of the Jeffrey zone (Geo zone target – early 2012).

About Abitibi Royalties Inc.: Abitibi Royalties Inc. holds title to interests in the Luc Bourdon and Bourdon West Prospects (also known as the McFaulds Lake Property) and the Malartic CHL Property, plus a 2% net smelter royalty interest in one claim held by Osisko Mining Corporation, which was previously held by Golden Valley and vended to Osisko, and may acquire and generate other property and royalty interests.

Mr. Glenn J. Mullan, P. Geo (OGQ and APGO (Temporary)) and Chief Executive Officer of Abitibi Royalties, is the Qualified Person (as such term is defined in National Instrument 43-101) who has reviewed this news release and is responsible for the technical information reported herein.

Forward Looking Statements:

This news release contains certain statements that may be deemed "forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Golden Valley believes 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 realities may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of Golden Valley's management on the date the statements are made. Except as required by law, Golden Valley undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.

Complete list of Golden Valley News Releases pertaining to the Malartic CHL property:

  • January 31, 2006 - Property Acquisition near the Canadian Malartic Mine;
  • February 03, 2006 - Malartic CHL Prospect Optioned to Osisko Exploration Ltd
  • June 20, 2007 - Osisko Drilling on Golden Valley's Malartic CHL Property
  • August 7, 2007 - Osisko Intersects 8.4 m Averaging 8.8 g/t Au at Malartic CHL;
  • October 29, 2007 - Osisko Outlines New Gold Zone at Malartic CHL Prospect;
  • March 18, 2008 - Osisko Intersects 107m Averaging 1.47 g/t Au at Depth in Norrie Zone on Golden Valley's Malartic CHL Property;
  • April 17, 2008 - Osisko Intersects Significant Gold Mineralization Over 800 Metres Strike Length at Jeffrey Zone on Golden Valley's Malartic CHL Property;
  • September 10, 2009 - Golden Valley Mines Intersects Significant Near Surface Gold Mineralization and Depth Extension at the Jeffrey Zone ;
  • October 19, 2009 - Significant New Gold Mineralization Intersected on the CHL Porphyry Intrusion and Shaft Zone;
  • November 6, 2009 - 19,000m Definition Drill Program on the Jeffrey Zone. Osisko Reports Drill Program Now Underway on Malartic CHL Prospect;
  • December 23, 2009 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone and CHL Porphyry Intrusion;
  • February 04, 2010 - Significant New Gold Mineralization Continues to be Intersected on the Shaft Zone & CHL Porphyry Intrusion;
  • March 23, 2010 - Significant New Gold Mineralization Intersected from the Malartic CHL Prospect including 54 metres averaging 1.39 g/t Au;
  • May 13, 2010 - Significant Gold Mineralization Intersected in 25 Drillholes on the Malartic CHL Prospect. Results include 109 metres averaging 0.83 g/t Au;
  • May 27, 2010 - Significant Gold Mineralization Intersected on the Malartic CHL; Prospect. Results include 73 metres averaging 2.51 g/t Au, with 66.1 g/t Au over 1.5 metres;
  • November 24, 2010 - Intersection of 72 metres grading 2.02g/t Au at the Jeffrey Zone
  • February 28, 2011 - Canadian Malartic Style Mineralization Discovered at the Jeffrey Zone; and
  • June 14, 2011 - 63.6 Metres Grading 1.50 g/t Gold Intersected at the Jeffrey Zone, Malartic CHL Prospect.

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 or accuracy of this news release.

CONTACT INFORMATION

Glenn J. Mullan
Chairman and CEO
Toll Free: 877-879-1688
glenn.mullan@goldenvalleymines.com