Vancouver, British Columbia – Emgold Mining Corporation (TSXV: EMR) (“Emgold” or the “Company”) announces it has signed a Letter of Intent (the “LOI”) with Searchlight Resources Inc. (TSXV: SCLT) (“Searchlight”) giving it the option to acquire a 100% interest the New York Canyon Property, NV (the “Property”), subject to underlying royalties. The Property includes 21-patented mineral claims and 60-unpatented mining claims, along with a significant database of historic information. Total historic drilling on the Property, to date, is 234 holes totaling 139,056 ft. (43,384 m). The Property has three main exploration targets – Longshot Ridge, Champion, and Copper Queen representing oxide and sulfide skarn and copper/molybdenum porphyry targets.
About the New York Canyon Property
The Property is located in the Santa Fe Mining District, Mineral County, in west-central Nevada, about 30 mi. (48 km) from Hawthorne, Nevada. The Property consists of 21-patented claims and 60-unpatented claims totaling about 1,500 ac. (607 ha). The claims are divided into two groups – the North and South Groups.
The North Group of claims comprising the Property covers historic past producing copper operations and gold occurrences and is adjacent to the past producing Santa Fe Gold Mine owned by Victoria Gold Corporation (TSX:V: VIT) (“Victoria Gold”) The Santa Fe deposit was discovered in the late 1970’s and mined by Corona Gold in the late 1980’s and early 1990’s. Historic production estimated from Santa Fe Mine is 345,499 ounces of gold and 710,629 ounces of silver between 1989 and 1995 (source: The Nevada Mineral Industry, Special Publication MI-2017, Nevada Bureau of Mines and Geology). Note that the vicinity of the Property to a past producing mine is not necessarily indicative of the mineralization that may be hosted at New York Canyon Property.
The South Group of claims comprising the Property hosts the Longshot Ridge, Champion, and Copper Queen deposits, which host copper skarn oxide, copper skarn sulfide, and copper sulfide porphyry mineralization. The discovery of these deposits dates back to 1875 and historic production, by the Wall Street Copper Company during 1906-1929, came from a number of small surface showings in the Longshot Ridge area. Historic production is reported to be 8.9 million pounds (4.04 million kg) of copper at an average grade of 5.5% (source: USGS Mineral Resource Data System, Deposit ID 10301559, New York Canyon / Longshot Ridge Project).
Copper mineralization is hosted primarily within the Triassic-age Gabbs Formation limestone sequence with some within the underlying Triassic-age Luning Formation limestone units and overlying Jurassic-age Sunrise Formations limestone sequence. Mineralization in skarns is adjacent to Cretaceous age felsic intrusive rocks.
In the mid-1960s to the late-1970s, several companies explored the Property for major copper porphyry deposits. This work defined additional copper oxide skarn mineralization at Longshot Ridge and copper sulfide skarn and porphyry mineralization at the Copper Queen prospects. Historic drilling by Conoco, the operator of the Property from 1977 to 1991, totaled 107 holes totaling approximately 98,433 ft. (30,000 m). Drilling by Conoco, reported in a May 10, 1979 internal report, included a significant interval of chalcopyrite and molybdenite mineralization in drill-hole MN-42, drilled in 1977, intersecting 1,020 ft. (311m) of 0.41% Cu, 0.012% Mo, 4.5 ppm Ag, and 0.1 ppm Au from 560 ft. (171 m) to 1,580 feet (482 m) (true width unknown) at the Copper Queen prospect, located approximately 2 mi. (3 km) west of the Longshot Ridge prospect.
Conoco reported a 142 million tons (129 million tonnes) inferred resource grading 0.35% copper, 0.015% molybdenum, 0.1% Zn, 4 ppm Ag, and 0.1% Au for the Copper Queen deposit in the internal report dated May 10, 1979. In another internal report completed on September 20, 1979, Conoco reported “possible reserves from drill-hole data and geologic interpretation on cross sections” of 13.2 million tons (11.0 million tonnes) grading 0.55% copper for the Longshot Ridge prospect. These are historical reserve and resource estimates prepared prior to the implementation of NI 43-101 and use terminology not compliant with current reporting standards. A qualified person has not audited or verified these historical estimates nor made any attempt to re-classify the estimates according to current NI 43-101 Standards of Disclosure or the CIM standards.
Between 1992 and 1997 Kookaburra Resources Ltd. (“Kookaburra”) conducted further exploration, including exploration with various joint venture partners, including Coca Mines and Phelps Dodge. The tested the Longshot Ridge and Copper Queen skarns with an additional 54 drill-holes totaling 13,018 ft. (3,968 m). The primary goal of this exploration was to increase the size of the oxide skarn resource.
Subsequent to Kookaburra’s work on the Property, the unpatented claims lapsed in 1999. New unpatented claims were staked by two individuals and subsequently acquired by Nevada Sunrise LLC (“Nevada Sunrise”), a privately held Nevada corporation, along with rights to acquire the patented claims. Aberdene Mines Ltd. (subsequently Canyon Copper Corporation and then Searchlight Resources Inc.) acquired an option on the Property from Nevada Sunrise in March, 2004 and subsequently acquired rights to both the patented and unpatented claims that make up the current Property.
Searchlight completed 27,605 ft. (8,414 m) of drilling in 73 holes, focused on the Longshot Ridge deposit. Total historic drilling on the Property to date is therefore 234 holes totaling 139,056 ft. (43,384 m). In a 2010 Technical Report, Searchlight defined a historic indicated resource of 16.3 million tons (14.8 million tonnes) of 0.43% Cu and an historic inferred resource of 2.9 million tons (2.6 million tonnes) of 0.31% Cu in the Longshot Ridge copper oxide skarn area was defined. A cut-off grade of 0.20% Cu was used. This mineral resource estimate is considered historical as defined by NI 43-101 and a qualified person has not audited or verified this resource as a current mineral resource. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. The Company is not treating the historical estimate as current mineral resources or mineral reserves.
The Searchlight mineral resource was estimated using industry standards that conformed with CIM Definition Standards on Mineral Resources and Mineral Reserves. The mineral resource estimate database contains 58 historic drill holes from prior operators to Searchlight totaling 18,469 feet, 38 drill holes (10 HQ diamond drill holes and 28 reverse circular drill holes) totaling 14,585 feet completed by Searchlight during the period from 2004 to 2005, and various surface and trench samples from 34 trenches and road cuts obtained from Longshot Ridge. The estimate does not include 33 drill holes (7 HQ dimond drill holes and 26 reverse circulation holes) completed by the Company in 2006. Outlier high copper assays were capped at 4% Cu within the mineralized solid and at 1.3% Cu if outside the solid. Uniform 20 ft. composites were produced both inside and outside the mineralized solid from capped Cu values. Semivariograms were produced for Cu inside and outside the mineralized solid and used both to estimate and classify the resource. A three-dimensional geological and block model was generated using Gemcom and Techbase software. A block model with blocks of 50 x 50 x 40 feet in dimensions was placed over the mineralized solid with the percentage below topography and inside the mineralized solid recorded in each block. Densities of 2.94 for the mineralized zone and 2.70 outside the mineralized zone were used. Copper grades were interpolated into all blocks by using an ordinary kriging estimation method. Blocks were classified as either indicated or inferred based on grade continuity quantified by the semivariogram. To upgrade the resource to current, drilling by Searchlight from 2006 would need to be re-assayed due to QA/QC issues identified in the 2010 Technical Report and the new data incorporated into the resource model. The claims making up the Property package would also need to be updated.
The Longshot Ridge prospect is an advanced stage copper target in a carbonate-hosted skarn deposit. Other copper zones identified on the Property require additional exploration to evaluate their potential, including the opportunity to define a large copper porphyry (with molybdenum) target at the Copper Queen prospect.
Terms of the Transaction
Emgold has agreed to purchase a 100 percent interest in the 21-patented and 60-unpatented mining claims comprising the Property from Searchlight (the “Transaction”) under the following terms:
- C$10,000 on signing the LOI;
- C$40,000 on closing of the Transaction;
- C$500,000 in common shares of the capital of Emgold at the date of closing, with the share price based on the 30-day volume weighted average price of the Company’s share immediately prior to the announcement of the Transaction;
- C$100,000 within 6 months of the date of closing of the Transaction;
- C$100,000 within 12 months of the date of closing of the Transaction; and
- C$100,000 within 18 months of the date of closing of the Transaction.
The Transaction is subject, amongst other conditions, to completion of a definitive agreement and regulatory approval by the TSX Venture Exchange.
Synergy with Mindora Property Acquisition
Emgold previously announced it had signed two letters of intent to acquire a 100% interest in the Mindora gold and base metal property (the “Mindora Property”) by press release dated May 21, 2019. The New York Canyon Property is located approximately 12 mi. (19 km) from the Mindora Property and Emgold management believes the two properties will have potential synergy for exploration and advancement.
Robert Pease, C.P.G., a qualified person under the NI 43-101 instrument, has reviewed and approved the content of this press release.
Emgold is a junior gold exploration company focused on Nevada and Quebec. The Company’s strategy is to look for asset acquisitions and divestitures, joint ventures, option, royalty, and other business opportunities to advance the Company and create value for our shareholders. Our properties include the Golden Arrow, Buckskin Rawhide East, Buckskin Rawhide West, and Koegel Rawhide Properties in Nevada and an option to acquire up to a 91% interest in the Casa South Property in Quebec, adjacent to Hecla Mining Corporation’s (NYSE: HL) operating Casa Berardi Mine. The Company has a strategic investment of 3.75 million shares of Troilus Gold Corporation (TSX: TLG) which is advancing the Troilus Gold Project in Quebec. For more information on the Company, investors should review the Company’s filings that are available at www.sedar.com or the Company’s website at www.emgold.com.
On behalf of the Board of Directors
David G. Watkinson, P.Eng.
President & CEO
For further information, please contact:
David G. Watkinson, P.Eng.
Tel: 530-271-0679 Ext 101
Neither TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note on Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian and U.S. securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein including, without limitation, statements regarding the anticipated results from exploration activities, the discovery and delineation of mineral deposits/resources/reserves and the anticipated business plans and timing of future activities of the Company, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are 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.
The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including potential acquisition of the Mindora Property and New York Canyon Property, further exploration, development, or mining activities on the Mindora, Property. New York Canyon,, or its other Properties, operating and technical difficulties in connection with mineral exploration and development activities, the estimation or realization of mineral reserves and mineral resources, the timing and amount of estimated future production, the costs of production, capital expenditures, the costs and timing of the development of new deposits, requirements for additional capital, future prices of precious metals, changes in general economic conditions, changes in the financial markets and in the demand and market price for commodities, labour disputes and other risks of the mining industry, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, changes in laws, regulations and policies affecting mining operations, title disputes, the inability of the Company to obtain any necessary permits, consents or authorizations required, including TSX Venture Exchange acceptance of any other current or future property acquisitions or financings and other planned activities, the timing and possible outcome of any pending litigation, environmental issues and liabilities, and risks related to joint venture operations, and other risks and uncertainties disclosed in the Company’s latest interim Management’s Discussion and Analysis and filed with certain securities commissions in Canada. The Company’s Canadian public disclosure filings may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties.
The Company does not undertake to update any forward-looking information provided in this press release or Management’s Discussion and Analysis, except as, and to the extent required by, applicable securities laws. For more information on the Company and its business, investors should review the Company’s annual information form and other regulatory filings filed with securities commissions or similar authorities in Canada that are available on SEDAR at www.sedar.com. The Company reviews its forward-looking statements on an ongoing basis and updates this information when circumstances require it.
Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to update any of the forward-looking statements in this news release or incorporated by reference herein, except as otherwise required by law.