VANCOUVER, May 19, 2016 /CNW/ - Eureka Resources Inc. ("Eureka" or the "Company") (TSXV: EUK) is pleased to provide the following update of recent developments on its Gemini Lithium Project ("Gemini"). Gemini is located in the Lida Valley, Nevada, and consists of 247 placer claims totaling 4,940 acres (2,000 hectares). On January 20, 2016, Eureka entered into a letter agreement (the "Agreement") with Nevada Sunrise Gold Corporation ("Nevada Sunrise") (TSXV: NEV) which gave it the right to acquire a 50% participating interest in Gemini (see Eureka news release dated January 21, 2016).
On May 4, 2016, Eureka and Nevada Sunrise entered into an addendum to the Agreement in which they agreed that Eureka had completed its due diligence review on Gemini and that Nevada Sunrise had confirmed receipt of approximately CAD$97,000 from Eureka representing 50% of the acquisition and evaluation costs on Gemini as provided for in the Agreement. The companies also agreed that a definitive joint venture agreement would be entered into on or before September 30, 2016, or such other date as may be mutually agreed to by the companies. All approvals of the independent directors of each company have been obtained and the Agreement and its addendum have been filed with the TSXV. Upon acceptance by the TSXV, Eureka will issue 300,000 common shares to Nevada Sunrise and will become the beneficial owner of a 50% interest in Gemini.
About the Gemini Lithium Project
The exploration strategy at Gemini is to target desert sub-basins, or playas, that exhibit similar geological and geophysical characteristics to the Clayton Valley basin where lithium brines are known to accumulate. The Clayton Valley hosts North America's only producing lithium mine 40 kilometres (26 miles) to the northwest of Gemini. Such desert sub-basins can be delineated by gravity surveys that detect strong gravity lows. A geophysical gravity survey carried out in 2012 and 2013 indicated strong gravity lows at Gemini West and Gemini East, two faulted sub-basins located approximately 7 kilometres (4.5 miles) apart and each interpreted to be hundreds of metres deep. To view maps of Gemini visit: https://www.eurekaresourcesinc.com/projects/lida-valley
The decision to stake the Gemini claims was made after review of the geophysical gravity data in conjunction with the favourable local geology. Specifically, the late Miocene felsic volcanic tuffs adjacent to Gemini could provide a source of lithium for trapped ground-waters within the sub-basins.
In February and March 2016, Nevada Sunrise completed two reconnaissance time domain electromagnetic ("TDEM") surveys totaling 23.3 kilometres (15.1 miles) across Gemini West and Gemini East. The TDEM surveys each detected conductive zones within the sub-basins defined by the previous gravity survey. The results gained from the surveys could be interpreted to be conductive brines at depth well below the non-conductive alluvium sediments at surface. A conductive layer 150–250 metres deep appears to cover most of Gemini West and Gemini East. In addition, several isolated strong conductive zones were interpreted at depths from 400 to 600 metres. The conductive layers and zones may be indicative of brine solutions in porous aquifers and traps within each sub-basin. After the review and interpretation of the compiled TDEM data is completed, the companies intend to apply to the U.S. Bureau of Land Management for a drilling permit which should occur by the end of the second quarter of 2016. There are no known drill holes at Gemini.
John R. Kerr, P. Eng., is the Company's designated Qualified Person for this news release within the meaning of National Instrument 43-101 and has reviewed and approved the technical information contained in this news release.
FORWARD LOOKING STATEMENTS
All statements in this release, other than statements of historical fact, are "forward-looking information" within the meaning of applicable Canadian securities laws, including statements that address future exploration and drilling plans; potential mineralization; timing of application for drilling permits; and the intention of Eureka and Nevada Sunrise to enter into a definitive joint venture agreement. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Eureka to differ materially from those anticipated in such forward-looking information.
Such factors include, among others: that Eureka and Nevada Sunrise may not obtain TSXV approval for the Agreement and its addendum thereto; that the companies may be unable to agree on the terms of the definitive joint venture agreement in the time expected or at all; that appropriate drilling targets may not be identified in the time expected; risks related to the interpretation and actual results of historical exploration at the Gemini property, reliance on technical information provided by third parties, including access to historical information on the Gemini property, current exploration and development activities; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, as well as those factors discussed in the section entitled "Risk Factors" in the Company's Management Discussion and Analysis for the Three Months Ended January 31, 2016, which is available under Company's SEDAR profile at www.sedar.com.
Although Eureka has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Eureka disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information.
Forward-looking statements are made as of the date hereof and accordingly are subject to change after such date. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of the Company's operating environment. Eureka does not undertake to update any forward-looking statements that are included in this news release, except as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this release.
SOURCE Eureka Resources, Inc.
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For further information: Further information about Eureka can be found on the Company's website at www.eurekaresourcesinc.com and at www.sedar.com, or by contacting Michael Sweatman, President and CEO or Bob Ferguson by email at [email protected], or by telephone at (604) 449-2273.