Wildcat signs letter agreement for Regal Resources' Sunnyside Project
VANCOUVER, April 9, 2014 /CNW/ - Wildcat Silver Corporation (TSX: WS) ("Wildcat" or "The Company") announces that it has signed a letter agreement with Regal Resources Inc. ("Regal") which sets out the terms and conditions pursuant to which Wildcat may earn up to a 70% interest in Regal's Patagonia/Sunnyside Project ("Sunnyside" or the "Project"), located near Nogales, Arizona. All dollar amounts referred to are Canadian dollars.
Sunnyside is approximately 70 kilometres south of Tucson, immediately to the west and adjoining Wildcat's Hermosa property (Please see Figure 1) in Santa Cruz County, Arizona. The Project consists of 295 unpatented claims totalling approximately 5,900 acres.
Sunnyside hosts compelling shallow and deep porphyry copper-molybdenum targets. Based on geologic mapping and core drilling, there are four main exploration targets: 1) Sunnyside Deep (copper sulfide); 2) Sunnyside Shallow (near surface copper oxide); 3) Chalcocite Enrichment Zone; and, 4) Sunnyside Skarn (sulfide). Wildcat believes that there is significant exploration potential at these targets, and that the Sunnyside Skarn may be an extension of the sulfide skarn resource identified on the Hermosa property. Recent re-assays of historic core drilling by Regal has confirmed the robust nature of the Sunnyside Skarn target returning up to 306.65 g/t silver, 1.17% copper, 4.27% lead and 10.70% zinc over 17.37 metres (as reported in the June 11, 2012 43-101 Technical Report for Sunnyside).
The principal terms and conditions pursuant to which Wildcat shall have the right to earn interest in Sunnyside are as follows:
- Wildcat may earn a 60% interest (the "Initial Interest") in Sunnyside upon cash payment to Regal of an aggregate of $4 million over five years and completion of exploration work expenditures in respect of Sunnyside for an aggregate of $25 million over a period of six years following the execution of an earn-in agreement (the "Agreement").
- Following the acquisition of the Initial Interest, Wildcat may earn an additional 10% interest (for an aggregate of 70% interest) by paying Regal an additional $1.5 million in cash and completing a feasibility study on Sunnyside.
- Regal shall issue an aggregate of 15,000,000 common share purchase warrants to Wildcat on execution of the Agreement where each warrant ("Warrant") is exercisable for one common share of Regal ("Common Share") in the following increments: a) 5,000,000 Warrants exercisable at $0.20 per Common Share for a period of two years from the date of issue; b) 5,000,000 Warrants exercisable at $0.50 per Common Share for a period of four years from the date of issue; and c) 5,000,000 Warrants exercisable at $1.00 per Common Share for a period of five years from the date of issue.
- Wildcat will act as operator of the Project following execution of the Agreement.
Wildcat has an exclusive period of 30 days from the signing of the letter agreement to complete its due diligence on Sunnyside and determine if it wishes to proceed with the execution of an earn-in agreement.
About Regal Resources Inc.
Regal Resources Inc. is a junior mineral exploration and development company based in Vancouver, Canada. The Company is focused on the development and acquisition of copper projects in the prolific copper producing state of Arizona. The Company is currently focused on its advanced exploration copper/silver property, the Patagonia (Sunnyside) property, located near Nogales, Arizona. Regal Resources is listed on the Canadian Securities Exchange (CSE) under the symbol (RGR).
Wildcat is a Canadian mineral exploration company focused on the development of its 80% owned Hermosa silver-manganese project located in Santa Cruz County, Arizona. When in production, Hermosa is expected to be one of the largest primary silver producers as well as the only electrolytic manganese metal producer in the USA at industry low cash costs. The recently announced pre-feasibility study (December 10, 2013) estimates, annual production of 5.7 million ounces of silver and 110 million pounds of electrolytic manganese metal (EMM) at average cash costs of $4.41 per silver ounce and $0.74 per EMM pound over an 18 year mine life.
Cautionary Note Regarding Forward-Looking Information
Certain information contained in this press release constitutes forward-looking statements. All statements, other than statements of historical facts, are forward looking statements including statements with respect to the Company's due diligence and plans with respect to Sunnyside and the Company's intentions for its Hermosa project in Arizona, USA including, without limitation, expected future mineral production and operating costs. Forward-looking statements are often, but not always, identified by the use of words such as may, will, seek, anticipate, believe, plan, estimate, budget, schedule, forecast, project, expect, intend, or similar expressions.
The forward-looking statements are based on a number of assumptions which, while considered reasonable by Wildcat, are subject to risks and uncertainties. In addition to the assumptions herein, these assumptions include the assumptions described in Wildcat's management's discussion and analysis for the year ended December 31, 2013 ("MD&A"). Wildcat cautions readers that forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements and forward-looking statements are not guarantees of future results, performance or achievement. These risks, uncertainties and factors include general business, economic, competitive, political, regulatory and social uncertainties; actual results of exploration activities and economic evaluations; fluctuations in currency exchange rates; changes in project parameters; changes in costs, including labour, infrastructure, operating and production costs; future prices of silver and other minerals; variations of mineral grade or recovery rates; operating or technical difficulties in connection with exploration, development or mining activities, including the failure of plant, equipment or processes to operate as anticipated; delays in completion of exploration, development or construction activities; changes in government legislation and regulation; the ability to maintain and renew existing licenses and permits or obtain required licenses and permits in a timely manner; the ability to obtain financing on acceptable terms in a timely manner; contests over title to properties; employee relations and shortages of skilled personnel and contractors; the speculative nature of, and the risks involved in, the exploration, development and mining business; and the factors discussed in the section entitled "Risks and Uncertainties" in the MD&A.
Although Wildcat has attempted to identify important risks, uncertainties and other factors that could cause actual performance, achievements, actions, events, results or conditions to differ materially from those expressed in or implied by the forward-looking information, there may be other risks, uncertainties and other factors that cause performance, achievements, actions, events, results or conditions to differ from those anticipated, estimated or intended. Unless otherwise indicated, forward-looking statements contained herein are as of the date hereof and Wildcat disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable law.
To view Figure One, please click here: http://files.newswire.ca/918/WildcatApr92014.pdf
SOURCE Wildcat Silver Corporation
Letitia Cornacchia, Vice President, Investor Relations and Corporate Communications
Telephone: +1 416 860 6310