Fremont Gold Ltd. (TSX-V: FRE) (OTC Pink: USTDF) is pleased to announce that it has entered into an option agreement with Ely Gold Royalties Inc. and its wholly-owned subsidiary Nevada Select Royalty, Inc. to acquire the Gold Canyon Property consisting of 26 unpatented lode mining claims covering approximately 460 acres situated in Eureka Country, Nevada.
Under the terms of the option agreement, the Company can earn a 100% interest in the Property by making payments totalling US$802,500 as follows: an initial payment of US$15,000, a US$37,500 payment in June 2018, a US$75,000 payment in December 2018, a US$112,500 payment in December 2019, a US$112,500 payment in December 2020, a US$150,000 payment in December 2021, and a final payment of US$300,000 in December 2022. The Company can accelerate the exercise of the option and acquire the Property at any time by making all payments.
The option will be subject to a 2% net smelter return royalty on the Property and a 1% net smelter royalty on any acquired or staked additional claims located within the area of interest in favour of the Optionor. The Company will have an option to purchase 1% of the 2% net smelter royalty on the Property by paying to the Optionor $3,000,000.
Gold Canyon is located in the Gold Bar District in the southern Roberts Mountains, a well-known precious metals mining area in the southern portion of the Battle Mountain-Eureka trend comprising a 200km long, N-NW trending structural zone. The claims are on BLM ground and include the original Gold Canyon pit as well as a stockpile west of the pit.
The Gold Canyon project is completely surrounded by claims owned by McEwen Mining Inc. (“McEwen”) that comprise their Gold Bar Mine development project. In November 2017 McEwen received the final environmental permit to begin building the mine and plant which is scheduled to produce 65,000 oz/annum for eight years from four open pits: Gold Pick; Gold Ridge; and two pits at Cabin Creek starting in the first quarter of 2019.
The Gold Canyon pit is located only 900 meters northwest of McEwen’s Gold Ridge ore body and is part of the same mineralized system as shown in the image below. The four McEwen pits, along with the Gold Canyon pit, were originally operated by Atlas from the late 1980s to early 1990s and were in fact secondary satellite pits to Atlas’ original Gold Bar mine, located 5 kms to the southwest of McEwen’s development project. This historic mine which produced 289,354 oz Au from 1986-94 is also controlled by Fremont (see Fremont press release dated September 12, 2017 and figure below).
Figure 1: Gold Canyon claims (yellow) and targets in relation to McEwen Mining’s Gold Bar project (red)
2016 Nevada Select Royalty Work Program
A sampling program was conducted at Gold Canyon by Nevada Select Royalty in May 2016. The purpose of the program was to test mineralization left in the Gold Canyon pit, sample the high grade feeder structure and determine cyanide solubility of the Gold Canyon material. In total, forty-eight samples were collected and assayed. Forty samples were collected from two benches in the bottom of the Gold Canyon pit. These were cuttings from blast holes that were never loaded when Atlas ceased operations. All forty samples were mineralized, and at a 0.15 g/t Au cutoff, thirty-three of the forty samples returned an average grade of 0.42 g/t Au. The gold grades seen in this sampling could be within minable grade for a heap leach operation. It also appears that the majority of the samples had no adverse metallurgical problems indicated by the CN assays. Most of the samples showed a CN soluble rate of over 70% of the fire assay gold value, with many over 90%3.
In addition, three rock chip samples were collected from the high angle feeder structure at the northeast end of the pit. The three samples ran 0.37, 1.56 and 9.15 g/t Au. This mineralized zone clearly trends to the NE out of the pit and is most likely the mineralized structure intersected in historical Atlas drill hole 100-45 which returned 60 feet grading 0.112 oz/ton Au (18.3m@ 3.48 g/t Au).
CEO of Fremont, Dennis Moore, stated: The Gold Canyon acquisition along with our historic Gold Bar project puts Fremont in a particularly strategic position within the Gold Bar District going forward. There is significant potential to discover additional and new gold mineralization at both Gold Canyon and at Gold Bar. We have applied for, and expect to receive drill permits within the next four to six weeks, and weather permitting, we will be drilling shortly thereafter.
Dennis Moore, the Company’s CEO and President, and a Qualified Person as defined in NI 43-101, has reviewed and approved the technical information in this press release.
About Fremont Gold Ltd.
Fremont holds exclusive leasing rights to the Hurricane project in Lander County and the Gold Bar and Gold Canyon Projects in Eureka County, Nevada. Fremont also owns the Goldrun Project, in the Adelaide mining district, in Humboldt County, Nevada. The Company’s strategy is to conduct exploration on its existing projects and to build a quality portfolio of gold projects in Nevada using the collective exploration expertise of the new management team. Further information regarding the Hurricane Project and Goldrun Project are described in the filing statement of the Company dated May 29, 2017, available at www.sedar.com.
1 Atlas Corporation, Gold Bar Review, January 1997
2 McEwen Mining Inc website: www.mcewenmining.com
3 Ely Gold Royalties Inc fact sheet and internal report
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