Sona Resources (CVE:SYS) said Friday it has closed the first tranche of its $450,000 non-brokered private placement financing.

To date, the company has issued 500,000 units at a purchase price of $0.60 per share, for gross proceeds of $300,000.

Each unit consists of one common share of Sona stock and one half of a share purchase warrant. Each full warrant entitles the holder to purchase one additional share of the company at an exercise price of $0.90 for two years following the closing date.

Should the company's share price exceed $1.30 per share for ten consecutive trading days after one year from the date of closing, however, the warrant expiration date will be accelerated to 30 calendar days from the trigger date.

The next tranche of the private placement will see the issuance of 250,000 units at $0.60 each, for total proceeds of $150,000.

A finder's fee equal to eight percent of the gross proceeds raised may be paid, Sona said.

All proceeds from the financing will be used for exploration and development work on the company's wholly-owned Elizabeth gold property, and its wholly-owned Blackdome gold mine, each in British Columbia.

At Blackdome, which is located 250 kilometres north of Vancouver, indicated mineral resources are estimated at 144,500 tonnes, grading 11.3 g/t, containing 52,600 ounces of gold. Inferred resources are estimated at 90,600 tonnes, grading 8.8 g/t gold.

The company is aiming to bring the property back into production over the next year and a half at a rate of 200 tonnes per day, with feed from the Blackdome mine, as well as its Elizabeth gold deposit, just 30 kilometres south of Blackdome.

At Elizabeth, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3 g/t gold, containing 206,100 ounces.

In November, the company said it completed the latest surface diamond drilling program at its Blackdome gold property, uncovering a whole new potential gold area.

Sona also holds a 100 percent interest in the Montgolfier project, located in Quebec, 40 kilometres east of the multimillion-ounce Casa Berardi Mine gold deposit.

Investors welcomed the news, with shares of Sona rising 6.5% to 65 cents as of 11:53am ET.

The exploration program was designed to drill for new gold-bearing structures or extensions of known areas of mineralization, and to outline potential areas for economic development of gold-bearing ore, the company said.

A total of 16 holes were drilled, for 3,176 metres.

In the Southern Zone, hole BD11-08 returned 13.6 grams per tonne (g/t) of gold over 1.50 metres in core length, opening up a whole new area of potential high grade mineralization. The hole was drilled to test for a southern extension of the historically mined No.1 and No.2 veins.

An adjacent hole, BD11-05, assayed 3.3 g/t gold over 1.50 metres in core length, at an intersection down dip from the intercept in hole BD11-08. Another nearby hole, BD11-06, returned 0.7 g/t gold over 1.50 metres, up dip from hole BD11-08.

Meanwhile, hole BD11-04 intersected a separate zone, intersecting 0.6 g/t gold over 1.50 metres core length.

“We intersected a promising new mineralized zone, and we feel optimistic about the assay results,” said president and CEO, John P. Thompson.

“We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company.”

In addition, holes BD11-01, BD11-02 and BD11-03 tested the northern extension of the Southwest Vein and the immediate area, approximately 400 metres south of the property’s tailings pond. These holes only intersected low values, the company said.

Ten distinct structures have been modelled on the Blackdome gold mine property, with the bulk of gold production coming from the No. 1 and No. 2 Veins.

During the late 1980s, this mine averaged over 20 g/t gold delivered to the mill, with a cut-off grade of 10 g/t gold. Given current gold prices, the cut-off grade for resource estimation could be significantly lower, and the mineralized areas not drill tested in the 1980s remain as targets to be tested, Sona said.

Current NI 43-101-compliant indicated resources have been estimated on the No. 1 and No. 2 Veins, with lesser tonnages on the Watson Vein, Vein 11, Vein 18, the Redbird Vein and the Giant Vein, using a cut-off grade of 5 g/t.

At Blackdome, which is located 250 kilometres north of Vancouver, indicated mineral resources are estimated at 144,500 tonnes, grading 11.3 g/t, containing 52,600 ounces of gold. Inferred resources are estimated at 90,600 tonnes, grading 8.8 g/t gold.

The company is aiming to bring the property back into production over the next year and a half at a rate of 200 tonnes per day, with feed from the Blackdome mine, as well as its Elizabeth gold deposit, just 30 kilometres south of Blackdome.

At Elizabeth, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3 g/t gold, containing 206,100 ounces.

Sona also holds a 100 percent interest in the Montgolfier project, located in Quebec, 40 kilometres east of the multimillion-ounce Casa Berardi Mine gold deposit.

The program included 20 surface diamond drill holes totaling 3,182 metres, which tested the Southwest and No. 9 veins, and 35 underground drill holes totaling 4,173 metres, which tested the D, Southwest, Main, and West veins.

Intended to test the Southwest vein, hole E11-05 intersected 28.1 g/t gold over 1.46 metres. Meanwhile, hole E11-01, also testing the Southwest vein, intersected 8.4 g/t gold over 0.51 metres.

Drilled only 30 metres to the southwest of previously drilled hole E10-69, hole E11-07, which was to test the southwest extension of the vein, intersected 6.2 g/t gold over 1.15 metres.

Testing the No. 9 vein, hole E11-18 returned 1.01 metres at 1.5 g/t gold and 0.53 metres at 1.0 g/t gold. Hole E11-19 found 0.96 metres at 1.3 g/t gold and 0.87 metres at 1.9 g/t gold, while hole E11-20 intersected 1.37 metres at 1.5 g/t gold and 1.2 g/t gold over 1.52 metres.

"We look forward to incorporating the positive results from the 11,134 metres of diamond drilling we have completed over the past two years into a new mineral resource report, due for completion early in the new year," said president and CEO, John P. Thompson.

"The updated resource will be incorporated into a new Preliminary Economic Assessment, which constitutes another step toward putting the former Blackdome Gold Mine mill back into production."

Among the underground holes that Sona drilled, hole E11-U107 intersected 0.45 metres at 1.7 g/t gold, 0.67 metres at 6.1 g/t gold, 1.5 metres at 1.3 g/t gold, and 0.98 metres at 3.8 g/t gold. The hole, which was intended to target both the D and Southwest veins, was drilled northward to determine the presence of the D vein, and to test for the northeast extension of the Southwest vein.

Other underground drill holes were drilled to determine the southwest expansion of the known mineralization in the Main vein. Testing the Main vein, hole E11-U98 intersected 5.25 metres at 2.8 g/t gold, including 1.65 metres at 5.4 g/t gold, and 0.5 metres at 7.2 g/t gold.

Meanwhile, testing the West vein, hole E11-U80 returned 1.66 metres at 4.1 g/t gold, including 0.6 metres at 9.7 g/t gold, while hole E11-U93 found 0.6 metres at 8.0 g/t gold, and 0.8 g/t gold over 1.5 metres.

Hole E11-U97 was drilled 100 metres to the west of the West vein. It intersected 4.02 metres at 1.0 g/t gold, including 0.56 metres at 2.1 g/t gold, 0.52 metres at 1.6 g/t gold, and including 0.5 metres at 1.9 g/t gold. These assays confirm that this vein continues to the west, Sona said.

In addition to defining these extensions, Sona said it intends to include these results in an updated Ni 43-101 compliant resource estimate for the Elizabeth property.

Based on data from 2009, the current resource stands at 206,000 ounces of gold at an average grade of 12.2 g/t gold, including 143,900 ounces of gold at 13.6 g/t from the Southwest vein, and 62,239 ounces of gold grading 10.0 g/t on the West vein.

Sona said it expects the updated resource estimate in the first quarter of 2012.

The Elizabeth mine is located 30 kilometres south of the company's Blackdome gold mine, which has a mineral resource estimate of 52,600 ounces of gold grading 11.3 g/t in the indicated category, and 90,600 tonnes grading 8.8 g/t gold in the inferred category.

Sona said it expects to bring the Blackdome mill back into production over the next year-and-a-half, at a rate of 200 tonnes per day, with feed from both the formerly producing Blackdome mine, and the Elizabeth property.

The company sold 857,142 flow-through units for a cost of 70 cents each.

Each unit consists of one flow-through share and one-half of one transferable warrant, with each whole warrant giving the holders a right to buy one common share of Sona until November 9, 2013, for 85 cents in the first 12-months, and $1 afterwards.

Net proceeds from the financing are to be used for exploration at the Elizabeth gold property and Blackdome gold mine.

Sona is in small-scale gold production at its flagship property, the 100 percent owned Blackdome Gold Mine, in south-central British Columbia, 250 kilometres north of Vancouver.

At Blackdome, indicated mineral resources are estimated at 144,500 tonnes, grading 11.29 grams per tonne of gold and containing 52,600 ounces of gold; and the inferred resource is estimated at 90,600 tonnes, grading 8.79g g/t gold

At its 100 percent owned Elizabeth gold deposit, 30 kilometres south of the Blackdome Gold Mine, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3 g/t gold and containing 206,100 ounces of gold.

Sona plans to bring its permitted Blackdome mill back into production over the next two years at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome and the Elizabeth property.

The company has so far completed 34 holes, or 3,919 metres of its 4,500 metre underground diamond drill program, and 18 holes, or 2,716 metres of its 3,000 metre surface drill campaign.

Assay results have been returned for the first 15 underground holes, Sona said, with hole E11-U80 intersecting 9.7 grams per tonne (g/t) of gold over a core length of 0.8 metres, and hole E11-U84 returning 4.4 g/t gold over a core length of 0.68 metres.

Twenty-four of the 34 underground holes completed thus far targeted the West Vein gold mineralization through a drill bay cut into the Upper Adit's east wall. The program is testing an area along strike and down dip from the Jewellery Box zone, known for its rich values and abundant visible gold, to a depth of approximately 140 metres.

The two holes mentioned intersected the West Vein approximately 50 metres below the Upper Adit drift on the vein, approximately 100 metres below the Jewellery Box zone surface.

Meanwhile, surface diamond drilling continued on the southwestern extension of the Southwest Vein mineralized zone. The company has received results for one hole, and partial results from several others. Hole E11-01 returned 8.4 g/t gold over a core length of 0.51 metres, from 120.17 metres to 120.68 metres.

Sona not only explores for minerals in Canada and the US, but is also a small-scale gold producer from its flagship property, the 100% owned Blackdome Gold Mine, in south-central British Columbia, 250 kilometres north of Vancouver.

At Blackdome, the indicated mineral resources are estimated at 52,600 ounces of gold, plus additional inferred resources.

Elizabeth, located 30 kilometres south of Blackdome, has an inferred gold resource of 206,100 ounces of gold.

Sona is aiming to bring its permitted Blackdome mill back into full production over the next two years at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome Gold Mine and the Elizabeth deposit.

The company also holds the Montgolfier project, located in Quebec, 40 kilometres east of the multimillion-ounce Casa Berardi Mine gold deposit.

The Vancouver, B.C.-based company said initial holes at the 34,794 hectare property will target the south end of the Giant vein, and will trace the structure southwest for more than one kilometre.

The northern end of the Giant vein has been found to host an inferred resource of 63,100 tonnes, grading 9.04 grams per tonne (g/t) gold and 16.27 g/t silver, as of June 2010.

Other known gold mineralization, including the Watson and Southwest veins, will also be drill tested, Sona said.
The Blackdome property, which is located in the Clinton mining district, is a joint venture with SXDLP of Dog Creek, B.C.

In late 2010, Sona granted SXDLP a four-year option for the purchase of up to 10% of the shares in No. 75 Corporate Ventures, a subsidiary of Sona that holds all the mineral claims, mining leases, ore processing plant and equipment for the Blackdome project.

The company recently announced the start of a 3,000 metre surface drill program at its Elizabeth gold deposit, located 30 kilometres south of Blackdome.

High grade intersections containing visible gold had been delineated in the Elizabeth area from the last drill program, with the most southwesterly cross-section, consisting of three drill holes, which returned composite assay values of 109.5 grams per tonne (g/t) of gold over 1.1 metres in hole E10-67; 20.0 g/t gold over 0.7 metres in hole E04-11A; and 77 g/t gold over 2.2 metres in hole E10-69.

Sona said it aims to return the Blackdome mill to production over the next two years at a rate of 200 tonnes per day.

The initial drill holes, in the Lillooet mining district British Columbia, are targeting the southwest end of the southwest vein mineralized zone. So far, two holes totaling 333.6 metres have been completed.

High grade intersections containing visible gold had been delineated in the area from the last drill program. The most southwesterly cross-section, consisting of three drill holes, returned composite assay values of 109.5 grams per tonne (g/t) of gold over 1.1 metres in hole E10-67; 20.0 g/t gold over 0.7 metres in hole E04-11A; and 77 g/t gold over 2.2 metres in hole E10-69.

"This part of our exploration drill program continues in an area that returned outstanding assay results in 2011," said Sona’s president and chief executive, John P. Thompson.

Sona’s shares were up 50 cents, or 5.88% higher, to $0.900 on Wednesday as of 2:07 p.m. EDT.

The company is engaged in exploration activities at its mineral properties in Canada and the United States, as well as small-scale gold production at its flagship Blackdome Gold Mine, in south-central British Columbia, 250 kilometres north of Vancouver.

It also holds a 100% stake in the Montgolfier Project in Quebec, 40 kilometres east of the multimillion-ounce Casa Berardi Mine gold deposit.

At Blackdome, the indicated mineral resources are estimated at 52,600 ounces of gold, plus additional inferred resources. The Elizabeth property, located 30 kilometres south of Blackdome, has an inferred gold resource of 206,100 ounces of gold.

The company's goal is to bring the permitted Blackdome mill back into production over the next two years at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome Gold Mine and the Elizabeth project. A preliminary economic study last year estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

All 20 holes, or 1,717 metres, completed thus far targeted the West Vein gold mineralization. The program is testing an area along strike and down dip from the vein, between the Jewellery Box surface outcrop, and the Upper Adit drift, the company said. 

All holes have intersected the targeted West Vein, and visible gold was noted in the core of hole E11-U84 at 91 metres, Sona added. 

In 2010, 10 uncut chip samples from trenching along the Jewellery Box zone returned composite assays of 45.9 grams per tonne (g/t) of gold over an average width of 0.35 metres and a strike length of 47.7 metres. 

Meanwhile, sampling from the West Vein Upper drift last year returned a composite assay from 17 uncut chip samples that averaged 68.8 g/t gold over a width of 1.0 metre, and a strike length of 24.5 metres. 

Sona said the deepest holes drilled during the current campaign tested the West Vein approximately 80 metres below the West Vein underground Upper Adit drift. 

The company also plans to drill test the Southwest Vein's position along strike, to the northeast of the known gold mineralization.

Of the holes drilled so far, a total of 331 samples from the first 15 holes have recently been sent in for analysis. 

Since its inception in 1990, Sona has been engaged in exploration activities at its mineral properties in Canada and the United States, as well as small-scale gold production at its flagship property, the Blackdome Gold Mine, in south-central British Columbia, 250 kilometres north of Vancouver. 

At Blackdome, the indicated mineral resources are estimated at 52,600 ounces of gold, plus additional inferred resources. The Elizabeth property, located 30 kilometres south of Blackdome, has an inferred gold resource of 206,100 ounces of gold. 

The company's goal is to bring the permitted Blackdome mill back into production over the next two years at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome Gold Mine and the Elizabeth project. A preliminary economic study last year estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

The initial drilling will target the West Vein gold mineralization to test an area along strike and down dip from the vein. The company will also drill to confirm the Southwest Vein’s position along strike to the northeast of the known gold mineralization.

Already, assay results from the most southwesterly drill section on the Elizabeth project, have intersected 109.5 grams per tonne (g/t) gold over 1.1 metres at 30 metres below surface in hole E10-67; and 77.9 g/t gold over 2.2 metres at 70 metres below surface in hole E10-69.

The Vancouver, B.C.-based company also plans to commence 3,000 metres of diamond drilling at the site in July, as well as 5,000 metres at its formerly-producing Blackdome gold mine, 250 kilometres north of Vancouver.

The drilling program at Blackdome will test the southern extension of the Giant Vein, where a 2007 sampling returned values between 0.30 g/t and 9.32 g/t of gold.

"We'll be drilling aggressively at both properties to expand the known resources and increase our confidence in them," said president and CEO, John P. Thompson.

Sona, whose properties are scattered across Canada and the U.S., saw its stock on the TSX Venture Exchange jump 11.11% on Thursday afternoon, trading at $1.00 per share.

The Elizabeth gold project is located 30 kilometres south of the company's flagship Blackdome mine, where Sona has outlined an inferred gold resource of 522,900 tonnes grading 12.3 g/t gold.

The goals of the exploration program at Elizabeth are to increase and upgrade the current mineral resource to the measured and indicated categories, as well as boost confidence in the high grade resource zone. Sona will begin with underground drifting on the southwest vein of the deposit.

"The underground program widens the scope of exploration, enabling us to expand the high-grade gold resources at Elizabeth," said president and CEO John P. Thompson.

Last December, a new underground portal on the southwest vein was established at the 2,300 metre level, where a test hole was drilled and intersected the quartz vein within seven metres, the company said.

Sona plans to drift along the vein for 350 metres, drive an 80 metre raise on the mineralized zone, and accumulate a bulk sample of 5,000 tonnes.

The company also intends to develop several drill bays, and complete 4,500 metres of underground diamond drilling focused on the southwest vein.

The results of the 2010 surface diamond drilling program, along with the 2011 drill results, will be included in a new resource report for the deposit in the fall.

Sona also said that it has submitted a multi-year permit application to the BC Ministry of Energy and Mines to conduct an additional 10,000 metres of surface diamond drilling at the Elizabeth project.

The company has agreed to issue up to roughly 1.4 million units at a price of $1.10 per unit.

Each unit will consist of one common share and one-half of one common share purchase warrant, with each warrant entitling the holder to acquire an additional common share at a price of $1.50 per share for two years from closing.

In addition, the company said that certain finders may receive warrants equal to 8% of the number of units purchased by subscribers introduced to Sona.

The proceeds of the offering, which is subject to regulatory approval, will be used for working capital purposes.

Sona has properties in both the US and Canada, and is a small-scale gold producer from its flagship Blackdome Gold Mine in south-central British Columbia.

The company aims to bring its fully permitted Blackdome mill back into production over the next three years at a rate of 200 tonnes per day, with feed from the Blackdome Gold Mine and the Elizabeth Gold Deposit property.

During its 2010 exploration program, Sona collected 10 chip and 10 grab surface samples at the West Vein.
Assay values for the chip samples ranged from trace to 675.2 g/t gold over a width of about 0.2m, with 64.3 g/t gold over a sometimes larger width of up to 1.2 metres. The average grade and width of the chip samples were 162.2 g/t gold and 0.35m, respectively.

The grab samples had grades of up to 160.1 g/t gold, with an average of 52.9 g/t gold over the strike length.

Sona also did some chip sampling underground the West vein. The samples showed values of up to a whopping 1,401g/t gold and averaging 10.2g/t gold over a width of 0.72 m.

The company also reported assay results for the Southwest Vein at the same deposit;  five grab samples around the Southwest Vein returned assay values from 0.1 g/t to 11.2 g/t gold.

In addition, three holes were drilled at the Southwest vein, targeting an area along a 70m strike length at a depth averaging about 150 metres, to trace out its northeasterly extension.

The drill results included 0.3 g/t gold at 6.23m from hole E10-73; 0.5 g/t gold at 2.05m from hole E10-74; and 1.4 g/t gold at 2.49m from hole E10-75.

As a result of the company's 2010 exploration activities at the Elizabeth deposit, the Southwest Vein strike length has now been traced over about 400 m.

The 2010 drilling also extended the gold mineralization at the southwestern end of the vein with drill holes E10-65, E10-67 and E10-69, which assayed 6.5 g/t gold over 6.70 m, 96.4 g/t gold over 2.50m, and 85.4 g/t gold over 4.03m, respectively.

As part of the 2010 work on the vein, Sona also completed three drill holes, two of which intersected the target. Highlights include drill hole E10-71, which intersected 1.04 metres of core length at 2.63 g/t gold, including 0.84 metres at 0.67 g/t gold.

Sona said that in 1983, R.W. Phendler completed an underground sampling on the No.9 Vein, intersecting three separate zones of gold-bearing ore shoots along the drift and indicating the "high nature of the zones", with samples up to 44.3 g/t gold.

At Elizabeth, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and containing 206,100 ounces of gold.

The company's flagship property is the Blackdome Gold Mine, 30 km north of the Elizabeth property in south-central British Columbia.

At Blackdome, the indicated mineral resources are estimated to be 144,500 tonnes, grading 11.29g Au/t and containing 52,600 ounces of gold, and the inferred resource is estimated to be 90,600 tonnes, grading 8.79g Au/t.

Sona aims to bring the fully permitted Blackdome mill back into production over the next three years at a rate of 200 tonnes per day, with feed from the former-producing Blackdome Gold Mine and the Elizabeth Gold property.

The company also owns the Callaghan project in Nevada and the Montgolfier project in Quebec.

The joint venture will see both parties develop Sona's 100% owned Blackdome Gold mine and Elizabeth Gold property located in the Clinton and Lillooet Mining Districts of southern British Columbia.

SXDLP, of Dog Creek, British Columbia, was formed in 2007 with the mandate to invest in various joint ventures and business activities relating to the economic development of the Canoe Creek Indian Band. It currently operates in the forest industry, in harvesting and silviculture, as well as agriculture.

Under the terms of the joint venture, Sona has granted SXDLP a four-year option for the purchase of up to 10% of the shares in No. 75 Corporate Ventures, a wholly owned subsidiary of Sona that holds all the mineral claims, mining leases, ore processing plant and equipment for both projects.

The option can be exercised once permitting approvals are received and once Sona has decided to begin full production at the two gold properties.

“We believe this agreement sets a precedent for the mining sector. It uses a free-market approach, and is founded on our mutual desire to create wealth, jobs, and contracting and other business opportunities for all the people of south-central British Columbia," said Sona executive chairman Nick Ferris.

Indeed, both parties said that their partnership is expected to give the region's First Nations the opportunity to develop business ventures and skills in the mining industry, as well as support entrepreneurs in the local aboriginal community.

Sona and SXDLP will collaborate in all areas of operations, including finance, permitting and development, employment, contracting, as well as cultural and environmental matters.

At Blackdome, the indicated mineral resources are estimated to be 144,500 tonnes, grading 11.29g Au/t and containing 52,600 ounces of gold, and the inferred resource is estimated to be 90,600 tonnes, grading 8.79g Au/t.

At the Elizabeth Gold property, 30 kilometres south of the Blackdome Gold Mine, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and containing 206,100 ounces of gold. The company aims to bring the Blackdome Gold Mine and mill back into production over the next three years at a rate of 200 tonnes per day, with mill feed from both Blackdome and Elizabeth.

Sona also holds a 100% interest in two other properties, including the Callaghan project located in Nevada and the Montgolfier project in Quebec.

The company was up more than 2% on Tuesday, trading at $0.82 as of 3:44pm ET.

This past August, underground samples were collected on the west vein from the Upper Adit, as well as surface samples from the "Jewelry Box" area of the west vein.

The southwest-northeast-striking west vein occurs parallel to and 150 metres southeast of the southwest vein, where the latest diamond drill program was focused.

Ten chip samples were taken at right angles to the strike of the vein, on average every 3.1 metres, along the back of the drift and over 33 metres. The best sample assayed 1,401g Au/t over 0.67 metres, with an average of 137g Au/t on an average width of 0.72 metres.

Trenching along the west vein on surface outlined a mineralized narrow quartz vein, known as the Jewelry Box, over a strike length of at least 25 metres. This area is approximately 55 metres above the high-grade intersections in the Upper Adit, the company said.

Systematic sampling is still under way, but two grab samples assayed 144g Au/t and 51.1g Au/t, respectively. One sample was assayed for silver and ran 64.5g Ag/t.

"We are getting impressive assays from the surface and underground sampling of the Jewelry Box area of the West Vein, in the areas displaying much visible gold," said president and CEO John P. Thompson.

The company is now outfitting a 25-man camp to support the planned underground drifting and raising program on the southwest zone, which is focused on increasing the confidence in the resources in the area.

On the Elizabeth property, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and containing 206,100 ounces of gold.

Since its inception in 1990, Sona has engaged in exploration activities at its mineral properties in Canada and the United States, as well as small-scale gold production at its flagship property, the Blackdome mine, in south-central British Columbia.

The company is aiming to bring the fully permitted Blackdome mill back into production over the next three years at a rate of 200 tonnes per day, with feed from the former-producing Blackdome Gold Mine and the Elizabeth Gold Property.

Sona also holds a 100% interest in two other properties: The Callaghan Project is located in Nevada, within 80 kilometres of several producing mines, and is underlain by the Roberts Mountain Thrust, a major structural setting for gold deposits. The Montgolfier Project is located in Quebec, 40 kilometres east of the multi-million ounce Casa Berardi Mine gold deposit.

The company was down 4.4% to $0.86 on Thursday as of 12:20pm ET.

Sona also holds a 100% interest in two other properties: The Callaghan Project located in Nevada and The Montgolfier Project, which is located in Quebec.

The company was up 5% on Wednesday afternoon, trading at $0.75 as of 12:05pm ET on the TSX-Venture Exchange.

The company will sell up to 770,000 flow-through units at a price of $0.65 per unit.

Each unit will consist of one flow-through common share and one warrant, with each warrant good for one additional common share of the company at a price of $1.00 in the first 12 months after closing, and $1.25 for the remaining 12-month period after which the deal expires.

Last week, the company announced that the 3,000 metre surface diamond drilling exploration program that began in early August at the Elizabeth property was on track, with planned underground work scheduled to take place this fall.

This work is meant to increase the confidence in the gold resource at the Elizabeth project, and to move it from the inferred category to the measured and indicated categories, said Sona.

The property has an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and containing 206,100 ounces of gold.

Since its inception in 1990, Sona has engaged in exploration activities at its mineral properties in Canada and the United States, as well as small-scale gold production at its flagship property, the 100% owned Blackdome Gold Mine in south-central British Columbia.

The company was up 9% to $0.74 as of 1:52 pm ET on Thursday.

To date, 15 holes totalling 2,339 metres have been completed.

The assay results will be released as soon as they are compiled, the company said.

Earlier this summer, the access road into the Elizabeth Gold property was improved to allow for an exploration camp upgrade.

As a result, a new trailer camp for the planned underground exploration program, scheduled to begin this fall, has already been sourced.

The planned underground program will consist of a new portal into the Southwest Vein zone drifting, with raises along the ore zone, along with 4,500 metres of underground diamond drilling.

This work is meant to increase the confidence in the gold resource at the Elizabeth project, and to move it from the inferred category to the measured and indicated categories, said Sona.

Surface trenching is also under way on the northeastern extension of the West Vein, in the Jewelry Box area.

The Elizabeth Gold property has an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and containing 206,100 ounces of gold.

Since its inception in 1990, Sona has engaged in exploration activities at its mineral properties in Canada and the United States, as well as small-scale gold production at its flagship property, the 100% owned Blackdome Gold Mine in south-central British Columbia.

Sona also holds a 100% interest in two other promising properties, in addition to the Elizabeth Gold Property and the Blackdome: The Callaghan Project is located in Nevada, within 80 kilometres of several producing mines. The Montgolfier Project is located in Quebec, 40 kilometres east of the multimillion-ounce Casa Berardi Mine gold deposit.

In doing so, the company has signaled to the market that it is not content to rest on its laurels, but rather wishes to build on its current successes and bring its key mines into active production. This latest set of resource updates seem to show that the company will be able to build on the small scale production coming from the Blackdome Gold Mine, and in addition affirms the need, and indeed benefits, of their planned five thousand meter diamond drilling program this summer to target extensions of the known veins with the expectation of being able to add additional resources.

The Blackdome Gold Mine is 100 percent owned by Sona Resources with no underlying royalties , consisting of 45 mineral claims, 10 crown granted mineral claims and two mining leases. It is a permitted mine and milling facility located in southwest British Columbia, approximately 230 kilometers north of Vancouver and is an 18,383 hectare property near the summit of Blackdome Mountain. The property contains a modern, well maintained floatation and gravity mill with a current design capacity of 200 tonnes per day, but has so far only undergone small scale mining operations. These have, between 1986 and 1991, treated over 340 thousand tonnes of ore at a mill head grade of 20 grams of gold per tonne (g/tn), producing 225 thousand ounces of gold over a five year period.

The floatation reject tailings are fine silica sand with some clay like fractions containing less that 0.02 percent sulfur, and preliminary testing at the SGS Lakefield site indicates a recovery of 90% of gold form the tailings pond. Innovat Ltd, who interpreted the results, also suggest that tailings form renewed production at Blackdome can be placed as paste residue or dry stacked away from the tailings pond, allowing for possible mining and recovery of the gold contained within the old floatation reject tailings.

These latest studies bring resource estimates for Blackdome to NI 43-101 standards, as required by Canadian authorities, and shows an increase of around 50 percent from the 1999 historical mine resource estimate. The latest resource estimate for Blackdome Gold Mine showed 144,500 tonnes of indicated resource, at a grade of 11.3 grams per tonne of gold and 50 grams per tonne of silver, for an indicated 52,600 ounces of gold and 232,300 ounces of silver. In addition to this, the report showed inferred resources of 90,600 tonnes at grade 8.8 grams per tonne of gold and 18.8 grams per tonne of silver, for an inferred 25,900 ounces of gold and 54,400 ounces of silver. It should be noted that the resource update was based on a cut off grade of 5 grams per tonne of gold, assumed an underground mining scenario, a gold price of one thousand dollar per ounce and 100 percent mineral recovery.

The report’s assessment of the Blackdome Gold Mine tailings impoundment at SGS Lakefield was equally as buoyant for the company. The resource estimate inferred a project’s tailings impoundment of 298,389 tonnes of tailings, grading 1.5 grams per tonne of gold for an inferred resource estimate of 14,145 ounces of gold. Again it should be noted that the estimate sued a cut off grade of 5 grams per tonne, and used an average specific gravity of 2.6 for the old tailings. With these latest resource estimates, the company has affirmed its intention to bring the Blackdome mill into active production in the next three years, with the opportunity to upgrade the mill if and when required. As well as the obvious benefits from having a mill in close proximity to the Blackdome project, the company also looks to benefit from its close proximity to the company’s Elizabeth Gold property, which is located just 30 kilometers south of the Blackdome property.

The Elizabeth Gold Property is a high grade gold project, covering 10,888 hectares in southwest British Columbia and is situated along a tributary of the Yalakom River. Again, the Elizabeth Property is 100 percent owned by Sona Resources, and consists of four crown granted claims and 19 other claims. To date, the Sona Resources team have conducted four diamond drilling programmes totaling almost nine thousand meters, and in June 2009 reported an initial inferred resource estimate of 522,900 tonnes, grading an average of 12.3 grams per tonne of gold (with a cut off grade of 5 grams per tonne of gold), inferring a total of 206,100 ounces of gold for the project.

The property already has the advantage of a good infrastructure, with access from the town of Lillooet approximately 75 kilometers up the Yalakom River Forest Road, with several smaller roads accessing old mine workings and the areas proposed for exploration. This leaves the ability of Sona to transport resources for processing at Blackdome from the Elizabeth property, relatively simple, with the company already stating its intention to transport any eventual production at Elizabeth by road to the Blackdome Gold Mine gravity and flotation mill. This in effect consolidates a lot of the costs of production for the two properties, and makes the quick and effective production at the Blackdome Gold Mine itself a priority. Any production from the Blackdome site will help give a good financial platform, for any upgrades needed to the gravity and floatation mill to accommodate extra resources being processed eventually from the Elizabeth Gold Property (if and when the current 200 tonnes per day needs to be improved on), and in addition should give Sona the ability to ramp up production at both sites relatively quickly, and in a cost effective manner.

This improvement of resource estimates at the Blackdome Gold Mine and Blackdome Gold Mine’s tailings opens up the potential not just for the Blackdome project, but eventually for the nearby Elizabeth Gold property as well. The Preliminary Economic Assessment contemplated underground mining at the Blackdome and Elizabeth properties, with 200 tonnes per day mill throughput over an eight year mine life, to recover 183,600 ounces of gold and 62,500 ounces of silver.

The assessment also assumed a $950/oz gold price, and projected operating cash costs to average $686 per ounce over the life time of the project. Pre-production capital costs were estimated to be $11.4 million at Blackdome and $9.4 million at Elizabeth, with a combined sustaining capital of $9.45 million. With these assumptions in place, the PEA estimate pre-tax cash flow to be a positive $27 million, seen as $20 million after tax. These strong financial projections reinforce the prospects for both the Blackdome and Elizabeth projects, but highlight the benefits of having Blackdome facilities in place quickly, allowing milling for both properties and generating a strong revenue stream.

The company’s decision to concentrate efforts on the Blackdome project, while not overlooking its other properties, aims to bring the mine into production quickly and efficiently within the next three years. These latest updates improve the outlook for achieving this goal, and add to the future gold production and projected cash flow coming from the project. In addition, the knock on effects for the Elizabeth Gold Mine of the quick and successful production from the Blackdome property will have a wider and longer lasting impact on Sona’s production in North America, improving overall outlook for the company and hopefully, bringing improved profitability going forward over the next decade.

Blackdome currently hosts an indicated mineral resources of 144,500 tonnes, grading 11.29 grams gold per tonne (containing 52,600 ounces of gold), and the inferred resource of 90,600 tonnes, grading 8.79g Au/t. At the Elizabeth Gold Property, 30 kilometres south of the Blackdome Gold Mine, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and (containing 206,100 ounces of gold).

The PEA, completed by Micon International, considered an underground mining operation at Blackdome and Elizabeth feeding a 200 tonne per day mill.  The assessment contemplated production of 183,600 ounces of gold and 62,500 ounces of silver over an eight year mine life.

The study returned encouraging results for Sona.  Micon project an operating cash cost of $686 per ounce, or $208 per tonne over the life of the project.  Pre-production capital costs were estimated at a very modest $20.8 million for both Blackdome and Elizabeth, with sustained capital of $9.45 million.  Pre-tax cash flow was estimated to be $27 million, or $20 million post-tax.

“We’re very pleased with the results of the Preliminary Assessment,” says John P. Thompson, Sona’s President and CEO. “The report shows a very positive economic projection for mining operations at Blackdome and Elizabeth with processing at the Blackdome mill. This analysis is a baseline scenario. The project is sensitive to the price of gold and a 15% increase in the price to $1,093 generates an increase in pre-tax cash flow to about $54 million.

We also see a great deal of upside through increasing the Elizabeth gold resource and an increased mill throughput."

The financial projections assumed a gold price of $950 per ounce, total recoveries of 94.5% gold and 77.6% silver from Blackdome ore and 92.5% gold for Elizabeth ore.

Annualized gold project is estimated at 23,505 ounces of annum, generating an pre-tax net present value of $11.45 million, and internal rate of return (IRR) of 31%. Including an estimate of possible taxation, the project would be expected to yield an after-tax undiscounted cash flow of $19.93 million over eight years, resulting in an after-tax IRR of 25.7 percent.

Granted the PEA, as the name suggest is preliminary in nature, and makes quite a few assumptions which now must be firmed up through additional studies, drilling and metallurgical testwork. Nonetheless, it is equally understandable why Sona Resources is pleased with the result, as it cleary justifies the company’s commitment to the project and continued investment in further development of the two assets.