CALGARY, AB, Oct. 14, 2021
/CNW/ - North Peak Resources Ltd. (TSXV: NPR) (the
"Company") announces it has signed a non-binding Letter of
Intent (the "LOI") with Minex LLC ("Minex") dated
effective October 7, 2021 for a
potential purchase option on the 2,733 acre Black Horse gold and
silver property located 50 miles east of Ely in White Pine
County, Nevada (the "Option"). Acquired by Minex in
1997, drilling campaigns in 1997-1998 of more than 300 holes
identified a mineralization trend that strikes NE and appears to
have a strike length of two miles with drilling generally at
100-foot centers. A historical surface based resource of gold
and silver for the Black Horse property was outlined in a
Nov. 2016 technical report for Minex,
as described below.
"The Black Horse property last drilled in 1998 could provide the
low cost gold production required to anchor North Peak's growth and
ambitions," said Brian
Hinchcliffe, Executive Chairman and CEO of the
Company. "Gary Grauberger who
rediscovered and drilled out the Black Horse property in the late
1990's has a track record of finding and commercializing gold
deposits and with Company director Mike
Sutton will design new drill programs utilizing modern
exploration technology."
Black Horse Property Highlights:
- 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), and a
site visit would be required to ensure the quality of historic data
meets current standards for use in a resource estimate. Further
information in respect of this historical resource estimates is set
forth below.*
- Property description – The Black Horse property is 2,733
acres of federal lands administered by the BLM and is located
within the Snake Range, Eastern White
Pine County, Nevada. The property is along U.S. Highway 50
and located 50 miles east of the town of Ely, Nevada and 11 miles Northwest of
Baker, Nevada, and is 100% owned
by Minex.
- 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 Black Horse
property has 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 Black Horse 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 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
including 0.24 ounces per ton (ozt/) 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.
The Company and Minex will work together towards the execution
of definitive documentation in the respect of the Option outlined
in the LOI. It is proposed that such definitive documentation will
include an initial payment to Minex of US$1.5 million (potentially to be paid in a
combination of cash and shares of the Company), two option payments
and a production royalty structure. Option payment #1 would be for
US$10 million and would be due 18
months after definitive documentation is executed, and within which
time the Company would carry out exploration and work programs.
Option payment #2, also for US$10
million would be due 12 months after the due date for Option
payment #1, and with such payment it is proposed that the Company
would acquire a 50% interest in the Black Horse property.
It is also proposed that after obtaining final material permits,
the Company would acquire the remaining 50% interest in the Black
Horse property. It is proposed that the production royalty would be
US$50 an ounce to be paid for the
first 400,000 ounces of gold production and thereafter the royalty
figure would be 2%. A transaction in respect of the Option is
subject to final determination of the structure of the transaction,
execution of definitive documentation, final approval by the Board
of Directors of each of the Company and Minex, and receipt of
applicable approvals by the TSX Venture Exchange. The Company
and Minex are at arm's length.
Investors are cautioned that there can be no assurance that a
potential transaction in respect of the Option will be completed as
proposed, or at all. Trading in the securities of the Company
should be considered highly speculative.
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 Black Horse property or any underlying property
agreements.
John Tumazos of Very Independent Research presented this
opportunity to the Company and is advising the Company in respect
of the development of the Black Horse property.
The Company will issue additional press releases related to
execution of definitive documentation in respect of the Option and
other material information as it becomes available. Finder's fees
and fees to advisors may be payable in connection with any
definitive transaction, and if payable, will be announced in
subsequent press releases.
* 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 Resources
The Company is a Canadian based gold exploration and development
company that is listed on the TSX Venture Exchange under the symbol
"NPR".
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 those that address
the ability of the parties to come to definitive terms and
negotiate and execution of definitive documentation in respect of
the Option, the ability to receive applicable approvals from the
TSX Venture Exchange, 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 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 June 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.