Intact Gold signs LOI to acquire Sheep Creek
INTACT GOLD SIGNS LOI FOR PAST PRODUCING SHEEP CREEK PROPERTY WITH HISTORIC RESOURCE
Intact Gold Corp. has entered into a letter of intent (LOI) dated Sept. 21, 2016, with Yellowstone Resources Ltd. on an option to acquire 100-per-cent interest in and to certain mineral properties, together with the surface rights, mineral rights, personal property and permits associated therewith, located in the Kootenay land district 12 kilometres southeast of Salmo, B.C.
About the Sheep Creek property
The Sheep Creek property consists of 68 Crown-granted claims and eight mineral cell claims totalling 1,400 hectares combined which are owned 100 per cent by Yellowstone Resources. Intact Gold has also acquired 100 per cent of two mineral cell claims through staking in the area adding an additional 340 hectares to the project. The total project area of 1,740 hectares is centred 12 km east-southeast of Salmo and 40 km south of Nelson in British Columbia.
Highlights of the project
A historic resource described as*:
Proven: 40,114 tons of 0.390 ounce gold per ton;
Probable: 35,172 tons of 0.530 ounce Au per ton;
Possible: 126,294 tons of 0.284 ounce Au per ton;
Marginal: 27,561 tons of 0.154 ounce Au per ton;
The grade is not cut and is calculated at one-metre mining width.
* Details of the historic resource are summarized from: B. Price (PGeo), 1988. Geological summary report, Nugget mine, Sheep Creek area, prepared for Gunsteel Resources Inc.
The reader is cautioned that a qualified person has not done sufficient work to classify the historical estimate as current resources and Intact Gold is not treating the historical estimate as current mineral resources. The resource/reserve categories disclosed in the historical estimates are not consistent with current Canadian Institute of Mining, Metallurgy and Petroleum definitions. While the company believes the estimates were completed to the standards of the day they do not use current mineral resource and reserve categories as required by National Instrument 43-101. The historic resource includes 1,300 tons at 0.150 ounce per ton in the proven category which is a stockpile owned by an unrelated third party and not included in this transaction.
Historic reported production on the property constitutes approximately 85 per cent of the whole camp:
632,590 ounces of gold with an average grade of 15.12 grams per tonne Au from the Reno, Queen, Goldbelt, Nugget and Motherlode mines;
252,461 ounces of silver.
Total land area of approximately 1,400 hectares including 68 Crown grants and eight mineral cell claims.
The Sheep Creek area was initially identified by regional prospecting in 1896 after the discovery of multiple mines and showings in analogous rocks throughout the Kootenay Lake area, most notably the Bluebell mine. The first production at Sheep Creek was in 1900, with peak production of the area being reached in 1913 and a decrease in 1916 due to high war-time mining costs and a fixed gold price. Production continued until the 1950s with several mines and mills being commissioned during that period. The whole Sheep Creek area has recorded production of 741,515 ounces of gold from 1900 to 1951 including the adjacent Kootenay Belle mine, production from mines within the project area is reported to be 632,590 ounces of gold (1,301,719 tonnes grading 15.12 grams per tonne gold).
The Sheep Creek area is underlain by a thick sequence of Lower Cambrian and Upper Proterozoic argillite, quartzite, limestone and schists belonging to the Kootenay Arc series. The tightly folded stratigraphy is intruded by several granitic stocks, elongate quartz-porphyry sills and numerous lamprophyre dikes. Two north-trending anticlines are the dominant structures in the area.
Gold mineralization is concentrated in en echelon-type quartz veins within northeast-striking, steeply dipping faults. Vein mineralogy consists of milky white quartz, pyrite, chalcopyrite and lesser sphalerite, galena, pyrrhotite, and rare visible gold. The most promising mineralized zones develop where the veins cross the axes of two north-trending anticlines largely in brittle quartzites of the Upper Nugget and Upper Nevada members. In general, the veins are considerably narrow in the Argillaceous Reno formation but wider shoots developed in some highly metamorphosed areas like the Reno mine. There are at least 55 known veins in the area, of which approximately 34 have had some level of production.
Information from historic mining reports, publications and exploration programs is currently being interpreted and compiled to further the project.
Intact Gold will have the option to acquire 100 per cent of the Sheep Creek property in consideration for:
Payment to Yellowstone of an aggregate amount of $600,000 to be paid upon the following:
$50,000 upon approval of the transaction by the TSX Venture Exchange;
$50,000 six months after approval of the transaction by TSX-V;
$25,000 12 months after approval of the transaction by TSX-V;
$25,000 18 months after approval of the transaction by TSX-V;
$125,000 two years after the execution of the definitive agreement;
$100,000 three years after the execution of the definitive agreement;
$125,000 four years after the execution of the definitive agreement;
$100,000 five years after the execution of the definitive agreement.
Issuance to Yellowstone of an aggregate amount of 3.5 million shares to be issued upon the following:
One million shares two years after the execution of the definitive agreement;
One million shares four years after the execution of the definitive agreement;
1.5 million shares five years after the execution of the definitive agreement.
Forty of the claims may be subject to a historic net smelter return royalty of 5 per cent, and 21 of the claims may be subject to a historic net smelter return royalty of 4.5 per cent, both in favour of arm’s-length third parties.
Brandon Macdonald, PGeo, is the qualified person as defined in NI 43-101, that has reviewed and approved the contents of this press release. The contained information regarding past production is historical in nature and has not been confirmed.
We seek Safe Harbor.