CALGARY, AB, Dec. 6, 2021 /CNW/ - North Peak Resources
Ltd. (TSXV: NPR) (the "Company" or "North
Peak")) announces it has signed a binding definitive agreement
(the "Agreement") with Minex LLC ("Minex") dated
December 6, 2021 for the option (the
"Option") to acquire the 2,733 acre Black Horse gold and
silver property (the "Property") located 50 miles east of
Ely within the Black Horse mining
district in White Pine County
Nevada (the "Transaction"). Similar to the history of
other Nevada gold mining
districts, the Black Horse area was mined for gold in the early
1900's and then intermittently in the post WW2 period. Minex
acquired the 136 unpatented lode claims that constitute the
Property beginning in 1998 and via drilling campaigns in 1998-1999
drilled 300 plus holes that identified a mineralization zone that
appears to have a strike length of two miles with drilling
generally at 100-foot centers. A historical resource of gold and
silver for the Property was outlined in a November 2016 technical report for Minex and is
described below.
"Since mid-October, North Peak has organized a dynamic local
team and sourced the drilling and other contractors for the
proposed early 2022 work programs to confirm the low-cost gold
potential of the Black Horse property, for the Company's
shareholders," said Brian
Hinchcliffe, Executive Chairman and CEO of the Company.
"Parallel to this exploration and operational push, will be the
exciting opportunity of bringing modern exploration technology to a
region where multiple mines have produced high grade gold at times
over the last plus 100 years."
Minex is owned and controlled by Gary
Grauberger, who over his 55-year career as an exploration
geologist has 10 significant gold/silver discoveries to his credit.
To date, the total production from the deposits he has personally
discovered or recommended for acquisition exceeds 90,000,000 ounces
of gold and 50,000,000 ounces of silver.
"I am pleased to enter into this agreement and look forward to
working with Brian Hinchcliffe and
North Peak's exceptional team of technical, development,
and financial personnel to further explore and develop the
Black Horse property," said Mr. Grauberger. "Furthermore, I am
excited to work with North Peak going forward in identifying other
gold/silver opportunities in the Western United States."
The Company also reports that it has received conditional
acceptance from the TSX Venture Exchange (the "Exchange") in
respect of the Transaction and is working diligently to obtain
final approval from the Exchange.
Black Horse Property
- Historic resources - Historical inferred mineral
resource estimates of 350,000 troy ounces of gold with a grade of
1.2 grams gold or 0.045 oz (using a base case cut off of 0.005 opt
Au), plus 1,140 million oz of silver at 0.14 ounce per ton, was
prepared for Minex in a technical report dated effective
November 18, 2016 by Scott E. Wilson, C.P.G. (the "Technical
Report"). A Qualified Person has not done sufficient work for
the Company to classify these historical estimates as a current
mineral resource or mineral reserve. The Company is not treating
these historical estimates as current mineral resources or mineral
reserves and has not verified the historical resource estimates.
While the Technical Report was prepared according to the guidelines
of the CSA's National Instrument 43-101, the reader is cautioned
that the data used in the preparation of the historical resource
estimates does not meet the current standards of exploration
quality assurance and quality control protocols and significant
additional drilling (including diamond drilling, some which will
twin earlier holes), data verification (quality control), would be
required to ensure the quality of historic data meets current
standards for use in a resource estimate. Further information in
respect of these historical resource estimates is set
forth below.*
Historic Metallurgical work – Historic but preliminary
metallurgical work consisting of bottle roll cyanide tests on
12 oxide drill cutting composites and 4 surface sample composites
returned
an average recovery of 97% for gold and
73% for silver at minus 100 mesh
in 48 hours.
- Black Horse geology – Approximately 65% of the gold
mineralization occurs in hydrothermally altered and micro-veined
quartzite inter-layered beds of mica schist in the Pre-Cambrian
McCoy Creek group. Most of the gold mineralization in the quartzite
appears to be stratiform and varies from 20-100 feet in thickness.
Gold grades range from below detection to 1.4 ounce per ton over
ten-foot drill assay intervals (see below for further information).
A major thrust structure is present-representing the conduit for
gold fluids. The Cambrian Lincoln Peak limestone overlies the
Precambrian McCoy Creek group and is in the thrust fault contact
with the Precambrian McCoy Creek group.
- Two distinct areas of development – The Property has two
(2) distinct areas to focus on, known as Area A and Area B. The
Technical Report and its historic estimate of gold and
silver resources refer only to data from
Area A
and is the oxide portion of that Area A.
Gold was originally produced from the Property around 1906 and
the district saw intermittent historic small-scale mining between
1905 and 1998. Recent exploration activities by previous operators
included mapping, sampling, geophysical surveys and drilling,
culminating in the historical resource estimate referenced above.
Gold mining began in the Black Horse district around 1905 and the
largest orebodies mined were veins along faults and replacement
deposits in limestone. Minex was the first company to undertake a
comprehensive exploration campaign and gold grades from the
1998-1999 drilling programs ranged from below detection to 1.4
ounce per ton over 10-foot drill hole assay intervals. Some of the
better intersections on the Property, include 0.24 ounces per ton
(oz/t) over 90 feet (hole 230), 0.25 oz/t over 30 feet (hole 182)
and 0.28 oz/t over 30 feet (hole 89). A Qualified Person has not
done sufficient work for the Company to corroborate these
historical drill intersections.
Transaction and Agreement
In accordance with the Agreement, the Option gives the Company
the right acquire up to 100% of the right, title and interest in
the Property. An initial payment to Minex of a combination of
US$1 million in cash and 1,250,000
common shares of the Company once final approvals in respect of the
Transaction are obtained from the Exchange (by no later than
January 7, 2022), will initiate the
Option.
Thereafter, the Option is exercisable by the Company in two
phases:
- First 50% - the Company will acquire right, title and interest
in and to 50% of the Property, by making a US$10 million cash payment within 18 months of
the initiation of the Option (the "First Payment") and a
second US$10 million cash payment
within 12 months of the First Payment.
- Remaining 50% - the Company will acquire right, title and
interest in and to the remaining 50% of the Property by obtaining
material permits required for construction and operation of a mine
on the Property, including a Record of Decision from the Bureau of
Land Management for a Plan of Operations, and as required from the
State of Nevada, an Air Qualify
Operating Permit, a Water Pollution Control Permit and a State
Groundwater Permit. The Company has five (5) years from the
date it acquires the first 50% in the Property, to acquire these
permits. Should the Company not acquire those permits by such
deadline or make the decision not to proceed with obtaining such
permits, the initial 50% in the Property acquired by the Company
will revert to Minex.
The Agreement provides a structure by which the Company and
Minex will work collaboratively in respect of the exploration of
the Property while the Option is in place, but the Company will act
as manager of the Property during this time and will ultimately be
responsible for all costs and will make all final decisions
regarding the exploration of, and operations over, the Property
during such time.
Should the Company exercise the Option and acquire 100% of the
right, title and interest in the Property, then the following
production royalties will be payable to Minex:
- US$50 for every ounce of gold
production for the first 400,000 ounces of gold production from the
Property;
- 2% NSR for any gold production after the first 400,000 ounces
of gold production from the Property; and
- 2% NSR for any silver production from the Property.
The other terms of the Agreement include representations and
warranties and conditions that are customarily seen in option
agreements such as the Agreement.
The Company and Minex are at arm's length, the Exchange has not
imposed sponsorship requirements in its conditional acceptance of
the Transaction and it is not expected that the Exchange will
require shareholder approval as part of its final approval of the
Transaction. No finder's fees are payable by the Company in
connection with the Transaction. The Company will issue
additional press releases related to the final approvals from the
Exchange for the Transaction and other material information as it
becomes available.
Mr. Mike Sutton, P.Geo., a
Director of the Company, is the Qualified Person who reviewed and
approved this news release. The Qualified Person has not reviewed
the mineral tenure, nor independently verified the legal status and
ownership of the Property or any underlying property
agreements.
* In respect of the historical mineral resource estimates
referenced above grade shells were interpreted and constructed and
the estimates used inverse distance techniques in Vulcan software by the author of the Technical
Report. The resource estimates were prepared in conformity with
generally accepted CIM "Estimation of Mineral Resources and Mineral
Reserves Best Practice Guidelines". No top cut was used, as it was
shown not to be necessary. To demonstrate the reasonable prospects
of eventual economic extraction these historical mineral resources
estimates have been pit constrained. Whittle™ was used to identify
the portion of mineralization that could support production from
open pit mining. It was assumed that gold and silver would be
recovered using crushing followed by heap leaching of mineralized
material. Typical production costs found throughout Nevada were used as assumptions. The estimates
were based on a gold selling price of US$1,000/oz, mining cost of US$2.00/ton, crushing and leaching costs of
US$4.00/ton, gold recovery of 80% and
a pit slope of 50 degrees. The base case mineral resource estimates
are highlighted at 0.005 opt gold; oxide ore bottle roll results
indicated that 80-85% recovery for gold and 50-60% recovery for
silver are probable on a conventional heap leach at minus 1 inch
feed, which need to be confirmed by cyanide column leach tests on
diamond drill-hole samples collected from different areas of both
deposits. The Technical Report recommended a drill program of 30
drill holes averaging around 275 feet. No economic analysis was
evaluated for the project.
About North Peak
The Company is a Canadian based gold exploration and development
company that is listed on the TSX Venture Exchange under the symbol
"NPR".
Investors are cautioned that there can be no assurance
that the Transaction will be completed as proposed, or at
all. Trading in the securities of the Company should be
considered highly speculative.
The Exchange has in no way passed upon the merits of the
Transaction and has neither approved nor disapproved the contents
of this news release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS: 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 the ability to
receive final approvals from the TSX Venture Exchange, the
abilities of the parties to complete the Transaction,
estimates of mineralization from drilling, geological
information projected from sampling results and the potential
quantities and grades of the target zones, potential for
minerals and/or mineral resources, and statements regarding the
plans, intentions, beliefs, and current expectations of the Company
with respect to timing of exploration programs on the Property and
the future business activities and operating performance of the
Company that may be described herein. Forward-looking
statements consist of statements that are not purely historical,
including any statements regarding beliefs, plans, expectations or
intentions regarding the future. Such information can generally be
identified by the use of forwarding-looking wording such as "may",
"expect", "estimate", "anticipate", "intend", "believe" and
"continue" or the negative thereof or similar variations. Readers
are cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur.
By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the
predictions, estimates, forecasts, projections and other
forward-looking statements will not occur. These assumptions, risks
and uncertainties include, among other things, the state of the
economy in general and capital markets in particular,
accuracy of assay results, geological interpretations from
drilling results, timing and amount of capital expenditures;
performance of available laboratory and other related services,
future operating costs, and the historical basis for current
estimates of potential quantities and grades of target zones,
as well as those risk factors discussed or referred to in the
Company's Management's Discussion and Analysis for the year ended
December 31, 2020, and the period
ended September 30, 2021 available at
www.sedar.com, many of which are beyond the control of the Company.
Forward-looking statements contained in this press release are
expressly qualified by this cautionary statement.
The forward-looking statements contained in this press
release are made as of the date of this press release. Except as
required by law, the Company disclaims any intention and assumes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Additionally, the Company undertakes no obligation to comment on
the expectations of, or statements made by, third parties in
respect of the matters discussed above.
CAUTIONARY NOTE REGARDING MINERAL RESOURCES:
Mineral resources are not mineral reserves and do not
demonstrate economic viability. There is no certainty that all or
any part of the mineral resource will be converted to mineral
reserves.
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING HISTORICAL
RESOURCE ESTIMATE: This news release has been prepared
in accordance with the requirements of the securities laws in
effect in Canada, which differ in
certain material respects from the disclosure requirements
promulgated by the Securities and Exchange Commission (the "SEC").
For example, the term "inferred mineral resource" is a Canadian
mining term as defined in accordance with Canadian National
Instrument 43-101 Standards of Disclosure for Mineral Projects and
the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") - CIM Definition Standards on Mineral Resources and Mineral
Reserves, adopted by the CIM Council, as amended. These definitions
differ from the definitions in the disclosure requirements
promulgated by the SEC. Accordingly, information contained in this
presentation may not be comparable to similar information made
public by U.S. companies reporting pursuant to SEC disclosure
requirements.
Neither the TSX Venture Exchange nor its Regulation
Service Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE North Peak Resources Ltd.