Medallion Resources to proceed with option for 100% of Red Wine REE property

Medallion Resources (CVE:MDL) (OTCQX:MLLOF) said Friday it will proceed with its option to acquire 100% of the Red Wine rare earth property in Labrador, based on an analysis of exploratory results from last year.

Rare earths are used in critical components for nearly all computing and mobile electronic products, as well as wind turbines, electric and hybrid vehicles and strategic defense systems. Demand for the metals is soaring, as their supply outside of China is limited.

"We have received some positive indications of rare-earth mineralization on the Red Wine property and subsequently updated our property agreement to continue exploration," said chairman and CEO Dr Bill Bird.

The initial rare earth element target on the property was a large exposed body of previously-mapped peralkaline intrusive rock, which is known to contain the rare earth-bearing mineral, eudialyte.

The company said that though overall average eudialyte-bearing assays from the 2010 field program were lower than expected, it will still look to locate other areas within the Red Wine intrusion that contain levels of eudialyte that are higher than the 15% to 20% encountered last year.

"The Red Wine peralkaline intrusive complex is clearly a significant occurrence of REEs, which deserves continued, detailed exploration.

"Historically, much higher eudialyte levels have been reported from the Red Wine intrusion and our planned exploration program for 2011 will include further work in search of these higher levels of eudialyte in less accessible areas of the property," added Dr. Bird.

The exploration work in 2010 was carried out on seven claim group licenses in four separate claim blocks, totaling 4,650 hecatres.

Under an amended option agreement, Medallion will acquire 100% of the property by issuing 50,000 common shares to the vendor upon the deal's approval. The company will also pay $475,000 in cash and issue another 1.75 million shares over a five year period, as well as incur $550,000 in exploration work.