New Klondike Exploration Ltd.

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United Reef and Black Widow Resources Inc. Terminate Proposed Reverse Takeover Transaction and Update Santa Maria Gold Project, Dryden Ontario

Date : May 11, 2012

United Reef Limited (TSXV: URP) (“United Reef" or the “Company”) announced that it has received notice from Black Widow Resources Inc. (“Black Widow”) advising that Black Widow wishes to terminate the pre-amalgamation agreement (the “Agreement”) entered into with United Reef as disclosed in United Reef’s press release on April 26, 2012, due to adverse market conditions. The Agreement provided, as a condition of closing the proposed amalgamation, that Black Widow was required to complete a private placement for a minimum of $3,000,000. Black Widow advised that due to the present conditions in the financial markets they have been unable to generate sufficient interest in the proposed private placement and therefore are not able to confirm their ability to satisfy the financing condition in the Agreement. The parties have formally agreed to terminate the Agreement.

 

United Reef said it is now focusing its attention on investigating other opportunities for the Company and will provide a further update to its shareholders in the near future. The Company is also taking immediate steps to call an Annual and Special Meeting for the United Reef shareholders.

 

United Reef also said that further to its press release dated November 15, 2011, it has acknowledged notice from Black Widow, that Black Widow has earned and vested a 70% interest in United Reef’s Santa Maria Gold project near Dryden Ontario. United Reef granted Black Widow an option to earn a 70% interest in the Santa Maria Gold Project and Black Widow has recently completed its earn-in obligations pursuant to the option and joint venture agreement (the “Option Agreement”) entered into in November, 2011. The option granted by United Reef entitled Black Widow the right to earn a 70% interest in the project by; making a payment to United Reef of $10,000 and incurring expenditures of $90,000 on the claims on or before May 1, 2012.

 

Pursuant to the terms of the Option Agreement, upon Black Widow vesting a 70% interest, the parties have now formed a joint venture for the further exploration and development of the project with Black Widow becoming the operator and United Reef having a 30% participating interest. The parties will now fund their respective pro rata interest in the joint venture for approved programs and expenditures, or be subject to dilution of their interest. In the event that a party’s interest is reduced to 10%, their interest will automatically be converted to a 1.5% net smelter royalty interest and the joint venture will terminate, with the other party vesting a 100% participating interest in the project. Black Widow has retained the right, pursuant to the Option Agreement, to acquire 1% of this royalty from United Reef for $500,000 at any time.

 

The Santa Maria project is located approximately 40 km southeast of the city of Dryden, Ontario and at the date of the Option Agreement consisted of 19 contiguous unpatented mining claims comprising 87 claim units encompassing an area of approximately 1,392 hectares. Five of the claims (11 claim units) were originally optioned by United Reef during October 2009, and are subject to a 2% net smelter royalty payable to the former owner of the claims. The remaining 14 contiguous claims (76 claim units) were subsequently staked by United Reef in November 2009 surrounding the original 5 claims and were subject to an extension of time order to complete required assessment work until May 2, 2012. These claims are subject to a 1% net smelter royalty payable to the former owner of the five claims.

 

Black Widow commissioned Geotech Ltd to complete an airborne geophysical “VTEM” survey over the original 19 claim group in January 2012, and has recently submitted the airborne survey for assessment credit purposes. The cost of the survey and the subsequent interpretation more than adequately covers the claim group for assessment purposes, and has fulfilled Black Widow’s earn-in requirements in the Option Agreement. The airborne survey flight plan was designed to overfly the boundaries of the original claims to the northeast and southwest. At the end of some of the flight lines, most particularly to the northeast, very interesting multi-channel electromagnetic anomalies were observed in the initial interpretation of the survey data. Black Widow subsequently arranged to stake five additional claims, contiguous to the original claim group, to cover the ground in this new area increasing the land package for the property by 59 units (approximately 940 hectares). These new claims have been incorporated into the joint venture and made subject to the terms of the Option Agreement. The land package that now comprises the Santa Maria project consists of 24 unpatented mining claims, consisting of 146 units covering approximately 2,332 hectares.
 
Three distinct EM anomalies were identified in the Geotech VTEM survey; each is suggestive of bedrock conductivity in an area where very little historical exploration work has been reported. These anomalies all occur along the northeast extent of the airborne survey and are now covered by the 5 new claims and are considered to have high priority for follow-up exploration work.
 
The anomalies are referred to from north to south as SM-1 to SM-3 and were reported as follows:
 
SM-1
This anomaly is a two-line response, and the profile shape indicates a broad conductor. The decay constant of 2 milliseconds is the highest within the survey. The EM response is coincident with a magnetic anomaly and the presence of sulphide mineralization is likely. Ground follow-up is strongly recommended.
 
SM-2
This anomaly occurs at the very extent of 5 consecutive flight lines 100 metres apart and there is only a partial response, suggesting continuation to the northeast. The nature of conductor cannot be ascertained from the incomplete profile, but there is a magnetic anomaly associated with the response. The decay constant reaches 0.6 milliseconds on the most southerly line and appears to be growing in amplitude off the end of the survey line. Ground follow-up is strongly recommended and should include horizontal loop EM surveying to completely map this intriguing anomaly.
 
SM-3
This anomaly occurs on four consecutive lines. The late-channel profile response indicates a thin conductor with a southwest dip. The conductor is related to the southwest edge of a magnetic anomaly and could represent mineralization in the contact zone. The decay constant reaches 0.75 milliseconds. Ground EM surveying is also strongly recommended on this anomaly.
 
In addition to the intriguing electromagnetic responses detected outside of the original claims, the airborne survey also focussed on the gold targets on the original 19 claim group. The magnetic portion of the survey suggests magnetically rendered structural controls in the vicinity of the Santa Maria shaft zone extending in a northwest – southeast direction linking several of the known gold occurrences on the property. These structural units will be pursued in the next exploration phase on the property relating to the property’s gold potential.
 
Neil Novak P.Geo., President of Black Widow Resources Inc. has prepared and reviewed the technical content of this Press Release; Mr. Novak is a Qualified Person under Canadian Securities Guidelines.
 
For further information please contact:
Michael D. Coulter 
President & Chief Executive 
United Reef Limited 
Tel: 416-368-3332 
 
Neil Novak
Officer President & Chief Executive Officer
Black Widow Resources Inc.
Tel: 416-203-8636
 
NEITHER THE TSX-V NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX-V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: future exploration results, and the business and operations of United Reef. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties, delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
 
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