The Mining Stock Report

Jaxon Minerals Inc. has entered into option agreements with Gem Oil Inc. and others that allow the company to acquire 100 per cent of the mineral rights to three properties located in the Flin Flon-Snow Lake volcanogenic massive sulphide and gold deposit Greenstone belt in Manitoba and Saskatchewan. The belt's metavolcanic rocks of the Amisk group, known to underlie portions of the properties, form one of the largest Paleoproterzoic VMS districts in the world. This famous belt has, for decades, supported mining, milling and smelting, and contains 27 copper-zinc-gold deposits from which 183 million tonnes of sulphide ore have been mined.

The company’s properties are strategically located and comprise the Lucille Lake block (2,982 hectares) and the Snow Lake block (144 hectares) in central Manitoba, and the Beatty Lake block (440 hectares) in Saskatchewan. The claims are easily accessible by road, winter trails and railway infrastructure, which serve both the Flin Flon and Snow Lake communities. In the region, near Jaxon’s optioned properties, active exploration is continuing and new discoveries are being made by such companies as Hudson Bay Exploration and Development Company Ltd., VMS Ventures Inc., Callinan Mines Ltd. and Rockcliff Resources Inc.

Jaxon is preparing to initiate an exploration program to further identify and test VMS and structurally controlled gold targets on the three properties. The phase 1 approach will include airborne geophysical surveying (VTEM-magnetic survey) of the claims by Geotech Ltd. of Aurora, Ont., and drilling of prioritized exploration targets.

Significant copper-silver-gold mineralization is known to occur on the Lucille Lake claims where a historical shaft, adit and trenches were found dating from the 1930s. At the Beatty Lake block typical VMS-style deposit grades of copper, zinc, gold and silver were discovered by the vendors.

VMS styles of mineralization in the belt are known to have characteristic airborne geophysical patterns showing strong conductance and associated magnetic response. Older airborne electromagnetic and magnetic surveys in the public domain show anomalous conductance and magnetic trends on portions of the properties where previous surveys were flown. Recent 2010 and 2011 airborne magnetic surveys flown by the vendors over the three properties were provided to Jaxon, which compared the results with Hudson Bay Exploration and Development, public domain, proprietary and 1993 to 1995 Spectrum system airborne data which covered portions of the properties. Geophysical patterns from the vendors’ modern magnetic surveys, an older EM shallow-penetration survey and Spectrum EM-magnetic anomalies show correlations which can be improved to drill-ready target delineation with the planned deeper-penetration (plus 300 metres) VTEM-magnetic system survey. Coincident conductive-magnetic targets have already proven to lead to new VMS discoveries by others in this famous belt by using the modern airborne system.

Bruce Ballantyne, project manager, stated: “Jaxon is fortunate to have optioned these three undrilled strategically located properties in this prominent VMS district. We look forward to exploration and drilling in the underexplored productive Flin Flon-Snow Lake region of mining-friendly Manitoba and Saskatchewan.”

The company also announces a private placement of eight million units at 15 cents per unit. Each unit consists of one share and one-half of one purchase warrant, with each full warrant plus 25 cents entitling the holder to purchase a further share for one year from closing. Finders’ fees commensurate with TSX Venture Exchange policies will be paid.

Details of the Lucille Lake option agreement are as shown in the attached table.

LUCILLELAKEOPTION Cash Share payment issuance

On signing of agreement $ 7,500 – On TSX-V acceptance $ 7,500 300,000
Six-month anniversary of acceptance $ 15,000 –
12-month anniversary of acceptance $ 30,000 300,000
24-month anniversary of acceptance $ 30,000 300,000

Note:
Subject to a 3-per-cent net smelter return, of which
one-half can be purchased for $3-million.
Beatty Lake option

The company is required to complete an airborne geophysical survey on the property by Dec. 31, 2011, and will then have until Jan. 31, 2012, if it so desires, to exercise the option by completing the following schedule of share issuances:

Within five days of Jan. 31, 2012: 600,000 shares

Within five days of Jan. 31, 2013: 600,000 shares

Within five days of Jan. 31, 2014: 600,000 shares

The Beatty Lake property is subject to a 3-per-cent net smelter return, of which one-half can be purchased for $3-million.

Snow Lake option

The company is required to complete an airborne geophysical survey on the property by Dec. 31, 2011, in order to complete the terms of the agreement without further cash or share issuances, subject to a 3-per-cent NSR, of which one-half can be purchased for $3-million.

The option agreements are subject to TSX Venture Exchange regulatory acceptance.

We seek Safe Harbor.