West Kirkland Signs Letter Agreement with Allied Nevada to Acquire Hasbrouck and Three Hills Properties in Nevada, Announces ...
27 Janvier 2014 - 5:33PM
Marketwired Canada
NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES
West Kirkland Mining Inc. (TSX VENTURE:WKM) "WKM" or the "Company") announces
today that the company has signed a binding letter agreement (the "Letter
Agreement") with Allied Nevada Gold Corp. (ANV:TSX) ("Allied" or "ANV") to
acquire Allied's Hasbrouck and Three Hills properties (the "Properties") in
southwestern Nevada for consideration of up to US$30 million (the
"Transaction"). In connection with the Transaction, WKM announces a non-brokered
private placement of up to 15,000,000 common shares (the "Private Placement") at
a price of CAD$0.10 per share for aggregate subscription proceeds of up to
CAD$1,500,000.
WKM intends to raise additional funds through a brokered offering (the
"Subsequent Offering") and will provide details of such offering in a later
press release.
R. Michael Jones, CEO of West Kirkland Mining said, "We are pleased to reach
this agreement with Allied Nevada following a systematic search over a six month
period for an attractive gold project. The Hasbrouck and Three Hills properties
together offer a well-defined resource base where we can utilize our core
strengths and experience in mine evaluation and engineering. They also offer an
excellent exploration opportunity for the discovery of additional resources. We
look forward to presenting this opportunity more fully to our long standing
institutional contacts and other investors in the days ahead."
Terms of the Transaction:
Purchase Price: As set out in greater detail below, WKM is required to pay an
aggregate of US$20,000,000 for a 75% interest in the Properties and an
additional US$10,000,000 to acquire the remaining 25% interest in the
Properties. The Purchase Price is to be paid as follows:
-- US$500,000 non-refundable cash payment (the "Deposit") which was paid to
ANV upon execution of the Letter Agreement. The Deposit was paid in
consideration of the rights granted to WKM under the Letter Agreement
including ANV agreeing to deal exclusively with WKM in respect of the
Properties for a period of 90 days.
-- An additional US$19,500,000 cash payment at closing (the "Initial
Payment"), which shall occur no later than April 24, 2014, at which time
WKM will have earned a 75% interest in the Properties. If WKM does not
make payment of US$19,500,000 on or before April 24, 2014 it will not
earn any interest in the Properties and will lose the Deposit.
-- An additional US$10,000,000 (the "Final Payment") shall be paid within
30 months after the date of the Initial Payment (the "Final Payment
Deadline"). If WKM pays the Final Payment to ANV in accordance with the
terms and conditions of the Letter Agreement, it will acquire the
remaining 25% interest in the Properties and own a 100% interest in the
Properties.
-- If WKM does not make the Final Payment to ANV on or before the Final
Payment Deadline, or if WKM offers payment and ANV chooses to decline
the Final Payment, the Properties shall be transferred into a joint
venture (the "Joint Venture") with WKM retaining a 75% interest in the
Joint Venture and ANV retaining 25% interest in the Joint Venture.
Conditions to closing: The completion of the Transaction is subject to a number
of conditions to closing including, but not limited to, WKM's satisfactory
completion of legal, title and environmental due diligence with respect to the
Properties, completion of various financings to raise adequate funds to make the
Initial Payment, board and regulatory approvals and other customary conditions
in the mining industry for similar asset purchases and sales.
Hasbrouck and Three Hills Resource Estimate
The resources at Three Hills and Hasbrouck are at or near surface and are well
oxidized.
Three Hills Indicated Resource (Jan. 1, 2012)
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Cate- Cut- AuEq
Deposit gory Off Tons Au Au Oz Ag Ag Oz AuEq oz(i)
----------------------------------------------------------------------------
Three Indic- 0.01 5,736 0.023 133,600 not calculated N/A 133,600
Hills ated
----------------------------------------------------------------------------
Hasbrouck and Three Hills Inferred Resource (Jan. 1, 2012)
----------------------------------------------------------------------------
Cate- Cut- AuEq
Deposit gory Off Tons Au Au Oz Ag Ag Oz AuEq oz(i)
----------------------------------------------------------------------------
Hasb- Infe- 0.005 128,608 0.009 1,157,474 0.228 29,322,669 0.013 1,671,907
rouck rred
----------------------------------------------------------------------------
Three Infe-
Hills rred 0.01 10.6 0.015 200 not calculated N/A 200
----------------------------------------------------------------------------
(i) An Au:Ag price ratio of 57:14:1 has been utilized to convert the silver
contained value to a gold equivalent grade, which has been added to the
actual gold grade.
The Mineral Resources have been prepared by Scott E. Wilson in conformity with
generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best
Practices" guidelines and are reported in accordance with the Canadian
Securities Administrators NI43-101. Mineral resources are not mineral reserves
and do not have demonstrated economic viability. There is no certainty that all
or any part of the mineral resource will be converted into mineral reserve.
Strategic Rationale for Transaction:
-- 1,671,907 inferred AuEq ounces at Hasbrouck and 133,600 indicated Au
ounces at the nearby Three Hills deposit (8km north) (see table above)
would add to WKM's portfolio of gold/silver assets in the southwest
United States including the TUG oxide deposit in Utah where WKM has
completed a preliminary economic assessment.
-- Hasbrouck and Three Hills are all-oxide deposits, suitable for open pit
mining and heap leaching, and are open at depth and laterally. An
intercept of 66 meters grading 3.33 grams per tonne outside of the
assessed resource at the Three Hills deposit highlights the exploration
potential.
-- Additional targets on 51 km2 of patented and unpatented claims.
-- The acquisition would elevate WKM from an exploration company to a
development company with potential for near-term production.
-- Potential strategic joint venture partnership with Allied, a current
gold producer in Nevada with specialization in large open pit mining
operations.
-- Deposits would be complimented by WKM's TUG deposit and approximately
1,000 km2 of exploration ground in the Long Canyon Trend of Nevada/Utah
and WKM would continue its focus on the southwest USA with its current
full time office in Nevada.
Related Financings:
In relation to the Transaction, WKM is arranging the Private Placement of up to
15,000,000 shares for gross proceeds of up to CAD$1,500,000 (the "Private
Placement Funds"). Of the Private Placement Funds, US$500,000 has been allocated
for the Deposit paid to ANV in consideration of the rights granted to WKM under
the Letter Agreement, including ANV agreeing to deal exclusively with WKM in
respect of the Properties for a period of 90 days. The Private Placement is
subject to acceptance by the TSX Venture Exchange (the "TSXV"). The Company may
pay finder's fees in connections with Private Placement, subject to the
acceptance of the TSXV.
WKM intends to raise additional funds through the Subsequent Offering and will
provide details of such offering in a later press release. Of these additional
funds, US$19,500,000 would be used to make the Initial Payment to complete the
acquisition of a 75% interest in the Properties. At a date prior to the Final
Payment Date, WKM may conduct a further financing to raise proceeds to pay the
Final Payment.
The securities described herein have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the United
States unless registered under the Act or unless an exemption from registration
is available.
Details of Hasbrouck and Three Hills
The Hasbrouck property is located in Esmeralda County, Nevada, is accessible by
paved road and consists of two claim blocks, Hasbrouck and Three Hills. The
Hasbrouck claim block consists of 28 patented and 583 unpatented mining claims.
The Three Hills claim block consists of six patented mining claims and 100
unpatented mining claims. Each claim block hosts a known significant gold
resource, with the potential for further discoveries and expansion. The historic
mining town of Tonopah, Nevada, lies within a short distance of the both
properties. Historic mining in the area focused on bonanza grade veins and took
place prior to the existence of technology to process oxide ores. Both deposits
are close to infrastructure with existing good access.
The Hasbrouck and Three Hills deposits are oxidized, low-sulphidation,
epithermal vein deposits with a combined Ag:Au ratio of 23:1 by weight. Most of
the ounces of gold in the known deposits are hosted within the Tertiary Siebert
Formation with minor amounts of mineralization in the underlying Fraction Tuff.
The Hasbrouck mineral resource estimate was defined by 287 boreholes totaling
259,318 feet (79,040 meters) drilled between 1974 and 2011. The Three Hills
deposit was defined by 260 boreholes totaling 74,524 feet (22,631 meters). Both
deposits outcrop and feature a combined strip ratio of 0.3:1. Both deposits are
open to further expansion, particularly Three Hills where hole THR12-15
encountered 66 meters of 3.33 g/t Au outside the known resource area.
Qualified Persons
Mr. Scott E. Wilson, AIPG Certified Professional Geologist, is WKM's Independent
Qualified Person as defined under NI 43-101. He has read and approved the
technical information in this news release. Mr. Wilson has reviewed and verified
the data disclosed in this news release to be in conformity with generally
accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best
Practices" guidelines and in accordance with NI 43-101.
Michael G. Allen, Vice President of Exploration for WKM, and a Qualified Person
as defined by NI 43-101, has reviewed the information contained in this news
release. He is the non-independent qualified person for this new release and has
verified the data.
In compliance with NI 43-101, WKM will provide a technical report on the
Properties within 45 days of the date of this announcement in support of the
technical disclosure in this news release related to the mineral resource
estimate for the Properties.
About West Kirkland Mining Inc.
WKM was formed in 2010 to focus on gold exploration along major trends in North
America. The Company has consolidated significant mineral rights positions
within the Long Canyon Trend of Nevada/Utah. The founders and Board members of
WKM have successful experience in gold discovery, mine development and mine
operations in Nevada and other gold producing jurisdictions in North America.
Disclaimer for Forward-Looking Information
This press release contains forward-looking information or forward looking
statements (collectively "forward-looking information") within the meaning of
applicable securities laws. Forward-looking information is typically identified
by words such as: believe, expect, anticipate, intend, estimate, postulate and
similar expressions, or are those, which, by their nature, refer to future
events. Forward-looking information in this news release includes, without
limitation, all statements regarding the terms, proposed timing and completion
of the Transaction, forming a workable joint venture with Allied, the
anticipated timing and completion of the Private Placement, Subsequent Offering
and any other financing in connection with the Transaction, the receipt of
necessary approvals with respect to the Private Placement, Subsequent Offering
and any other financing in connection with the Transaction and the anticipated
timing of a NI 43-101 technical report on the Properties prepared for WKM.
Although WKM believes that such timing as set out in this press release is
reasonable, it can give no assurance that such expectations will prove to be
correct. The Company cautions investors that any forward-looking information
provided by the Company is not a guarantee of future results or performance, and
that actual results may differ materially from those in forward looking
information as a result of various factors, including, but not limited to, the
state of the financial markets for the Company's equity securities, the state of
the market for gold or other minerals that may be produced generally, recent
market volatility; the results of the Company's due diligence evaluations with
respect to the Property; developments with respect to Allied Nevada or the
Property; variations in the nature, quality and quantity of any mineral deposits
that may be located, the Company's ability to obtain any necessary permits,
consents or authorizations required for its activities, to raise the necessary
capital or to be fully able to implement its business strategies and other risks
associated with the exploration and development of mineral properties. The
reader is referred to the Company's public filings for a more complete
discussion of such risk factors and their potential effects which may be
accessed through the Company's profile on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors Regarding the Use of Mining Terms
This press release has been prepared in accordance with the securities laws in
effect in Canada, which differ from the requirements of U.S. securities laws.
Unless otherwise indicated, all resource and reserve estimates included in this
press release have been prepared in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral
Resources and Mineral Reserves. NI 43-101 is a rule developed by the Canadian
Securities Administrators which establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning mineral
projects. Canadian standards, including NI 43-101, differ significantly from the
requirements of the U.S. Securities and Exchange Commission (the "SEC"), and
resource and reserve information contained therein may not be comparable to
similar information disclosed by U.S. companies. In particular, and without
limiting the generality of the foregoing, the term "resource" does not equate to
the term "reserves". Under U.S. standards, mineralization may not be classified
as a "reserve" unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time the reserve
determination is made. The SEC's disclosure standards normally do not permit the
inclusion of information concerning "measured mineral resources", "indicated
mineral resources" or "inferred mineral resources" or other descriptions of the
amount of mineralization in mineral deposits that do not constitute "reserves"
by U.S. standards in documents filed with the SEC. U.S. investors are cautioned
not to assume that any part or all of mineral deposits in these categories will
ever be converted into reserves.
U.S. investors should also understand that "inferred mineral resources" have a
great amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part
of an "inferred mineral resource" will ever be upgraded to a higher category.
Under Canadian rules, estimated "inferred mineral resources" may not form the
basis of feasibility or pre-feasibility studies except in rare cases. Investors
are cautioned not to assume that all or any part of an "inferred mineral
resource" exists or is economically or legally mineable. Disclosure of
"contained ounces" in a resource is permitted disclosure under Canadian
regulations; however, the SEC normally only permits issuers to report
mineralization that does not constitute "reserves" by SEC standards as in-place
tonnage and grade without reference to unit measures. The requirements of NI
43-101 for identification of "reserves" are also not the same as those of the
SEC, and reserves reported by the Company in compliance with NI 43-101 may not
qualify as "reserves" under SEC standards. In addition, under SEC standards, a
company may only be identified as "development" stage if it has established
"reserves" by SEC standards and is engaged in the preparation of such reserves
for extraction. Accordingly, information concerning mineral deposits set forth
in this press release may not be comparable with information made public by
companies that report in accordance with U.S. standards.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
West Kirkland Mining Inc.
R. Michael Jones
(604) 685-8311
West Kirkland Mining Inc.
Michael Allen
(604) 685-8311
West Kirkland Mining Inc.
Knox Henderson
(604) 685-8311
(604) 484-4710 (FAX)
info@wkmining.com
www.wkmining.com
West Kirkland Mining (TSXV:WKM)
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