/NOT FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
VANCOUVER, June 10 /CNW/ - Otis Capital Corp. ("Otis" or the "Company")
is pleased to announce that it has entered into an agreement in principle
dated June 4th, 2008 to earn up to a 75% joint venture interest in the Kilgore
Gold Project, Clark County, Idaho, and two additional gold properties, Hai and
Gold Bug located in Lemhi Counties, Idaho (the "Properties"), from Bayswater
Uranium Corporation ("Bayswater"). The Kilgore land position is covered by 150
federal lode mining claims, Hai is covered by 7 claims, and Gold Bug is
covered by 9 claims.
Kilgore comprises a large, 5 square mile, volcanic-hosted disseminated
epithermal hot-spring gold system situated on the northern margin of the
eastern Snake River Plain. Mineralization is of Pliocene age and is hosted
within Miocene age lithic and crystal tuff on the margin of a caldera setting.
Mineralization style and setting, host rock type and thickness, and overall
size of the mineralizing system are analogous to those characterizing the
Round Mountain, Nevada and McDonald Meadows, Montana multi-million ounce
volcanic-hosted disseminated gold deposits.
Between 1983 and 1996, a total of 122,257 feet of drilling in 191 holes
was conducted on the Kilgore deposit by Bear Creek, Placer Dome US, Pegasus
Gold and Echo Bay Mines. The majority of this drilling, 82,897 feet in 122
holes, was performed by Echo Bay between 1994 and 1996. In 1996, Echo Bay
completed a NI 43-101 non-compliant cross-sectional global resource estimate
for the Kilgore deposit. This estimate comprises 706,000 ounces of gold in
22.582MM tons of material at an average grade of 0.031 opt Au (0.010 opt Au
cutoff). Also in 1996, Placer Dome US, Echo Bay's minority-position joint
venture partner on the property, estimated a NI 43-101 non-compliant resource
of 561,000 ounces of gold contained in 14.112MM tons at an average grade of
0.040 opt Au (0.015 opt Au cutoff). These estimates, which are based on the
above noted historic drilling, are mentioned for historic information and
reference purposes only. A Qualified Person has not done sufficient work to
classify the historical estimates as current mineral resources, the issuer is
not treating the historical estimates as current mineral resources and the
historical estimates should not be relied upon.
Within the Kilgore deposit is a higher-grade core comprising a series or
set of northwest-trending structurally controlled bonanza-style feeder quartz
vein zones that have only partially been drill tested. Some of the better
drill intercepts associated with these zones include 90' @ 1.091 opt Au (hole
PK-56, 370' - 460'), 75' @ 0.222 opt Au (hole 94 EKR-89, 95' - 175'), 45' @
0.331 opt Au (hole EKM-5, 267' - 312'), and 65' @ 0.243 opt Au (hole 94
EKR-86, 250' - 315'). These zones represent a high priority exploration target
Deposit metallurgy is considered excellent based on favorable results of
bottle roll and column leach tests performed in 1995 and 1996 by Hazen
Research, Inc, Golden, Colorado on Echo Bay drill core and RC cuttings. All
bottle roll tests resulted in greater than 90% gold extractability and showed
that the mineralization is not refractory. Column leach tests indicate 94.3%
recovery on oxidized material (-1/2" crush size) and 86.9% on mixed/partially
oxidized material (-1" crush size), material types which together comprise
over 85% of the deposit. As noted in a 2002 Rayner and Associates and Van
Brunt NI 43-101 compliant report on the property, the extraction of 86.9% gold
on mixed material after 75 days of leach time is excellent and suggests that
even coarser crush sizes may also lend themselves to favorable extractability,
thus enhancing deposit economics.
John R. Carden, Ph.D., P. Geo., a Qualified Person as defined by National
Instrument Policy 43-101, is responsible for the technical information
contained in this news release.
Otis can earn-in an initial 50% joint venture interest in the Properties
i) Payment of US$100,000 in cash and the issuance of 500,000 common
shares upon receipt of TSX Venture Exchange approval of the
ii) Payment of US$100,000 in cash, issuance of 400,000 common shares
and incurring US$250,000 in exploration expenditures in Year One;
iii) Issuance of 400,000 common shares and incurring US$350,000 in
exploration expenditures in Year Two;
iv) Issuance of 400,000 common shares and incurring US$500,000 in
exploration expenditures in Year Three;
v) Issuance of 400,000 common shares and incurring US$900,000 in
exploration expenditures in Year Four; and
vi) Issuance of 400,000 common shares and incurring US$1,000,000 in
exploration expenditures in Year Five.
Otis can increase its interest to 75% by issuing an additional 1,000,000
common shares and by completing an independent pre-feasibility study on the
Kilgore Gold Project (one of the three projects being joint-ventured). In the
event Otis does not exercise its right to earn the additional 25% interest,
for a total of 75%, Bayswater then may elect to earn back a 10% interest, for
a total interest of 60%, by expending $600,000 within the year following its
election to exercise.
A 2.0% net smelter royalty ("NSR") will be paid to Bayswater on
production of gold from the Property. At any time, Otis will have right to
purchase each one-fourth of the NSR for the sum of $500,000, up to a maximum
of three-fourths (3/4), following which Bayswater would hold a 0.5% NSR.
Completion of the transaction is subject to TSX Venture Exchange
acceptance and the approval of the Qualifying Transaction announced on
April 22, 2008. There can be no assurance that the transaction will be
completed as proposed or at all. Investors are cautioned that, except as
disclosed in the filing statement to be prepared in connection with the
transaction, any information released or received with respect to the
transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered
highly speculative. The TSX Venture Exchange Inc. has in no way passed upon
the merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
ON BEHALF OF THE BOARD
"Craig T. Lindsay"
President & CEO
This news release does not constitute an offer to sell or a solicitation
of an offer to sell any of securities in the United States. The securities
have not been and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") or any state securities
laws and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is available.
For further information:
For further information: Tel: (604) 683-2507, Fax: (604) 683-2506,
E-mail: firstname.lastname@example.org, www.otiscapital.com