BEDFORD, NS, Sept. 27, 2012 /CNW/ - NSGold Corporation (TSXV: NSX) is pleased to announce that it has entered into a Letter of Intent with Cerro Rico Ventures LLC providing for the acquisition by NSGold of 100% ownership of the Silver Hill property located in Humboldt County, Nevada.
The Silver Hill property is located on the Getchell Trend, a major Nevada linear structure that has provided structural preparation for the introduction of gold and silver mineralization related to Cretaceous intrusive rocks that are found along the trend. Granodiorite intrusive rocks and skarns developed around the intrusive rocks are located near the Getchell and Pinson deposits to the north of the property and at the Adelaide deposit to the south of the property. The Getchell deposit (approximately 25 miles to the NNE) and Pinson deposit (approximately 20 miles to the NNE) are both multi-million ounce gold deposits with Getchell exceeding 10 million ounces. The Adelaide deposit located approximately 3.5 miles to the SSW has reported historic gold and silver production.
The Silver Hill property is comprised of 72 unpatented claims encompassing a 2,500 to 3,000 foot long shear zone that transects the western flank of Edna Mountain. The presence of silver, copper, arsenic and tungsten in the mineralized shear zone, which is thought to be part of the Golconda Thrust, suggests potential for sediment-hosted and/or skarn-related gold mineralization, similar to the Adelaide and McCoy deposits to the southeast, or possibly related to adjacent intrusive activity and gold-silver mineralization found near skarns at the Chimney Creek, Getchell, Pinson and Preble mines to the north.
NSGold's management considers the Silver Hill property to be highly prospective for the following reasons:
- Permissive stratigraphy - lower-plate rocks occur on the property, which are the same formations that host gold-silver mineralization at the Pinson, Preble and Adelaide deposits,
- Structural preparation is extensive, as evidenced by both high-angle Basin-Range faults and the Golconda Thrust on the property,
- Nearby granodiorite intrusive rocks - such intrusive rocks are associated with both tungsten-bearing skarn and gold-silver mineralization at all of the mines in the Getchell Trend (Chimney Creek, Getchell, Pinson, Preble and Adelaide),
- Strong silver and associated metals - sampling by several independent geologists and prior owners established the presence of high-grade silver associated with gold, copper, arsenic and tungsten, and
- Location - Silver Hill is located within the Getchell Trend, a well-known lineament in Nevada proven to host economic gold-silver deposits.
Glenn Holmes, Chief Executive Officer of NSGold Corporation, commented;
"We are excited to have been able to secure the option on the Silver Hill property. With the property being located in one of the most supportive mining jurisdictions in the world coupled with it being on an under-explored part of the prolific Getchell Trend, Silver Hill will be a great addition to NSGold's property portfolio. Our team continues to review other prospective acquisition opportunities as we work to further enhance NSGold's property portfolio."
Under the terms of the Letter of Intent, NSGold may, at any time during the ten-year term of the definitive Option Agreement, purchase a 100% interest in the Silver Hill property by making a cash payment of US$1,250,000. The Letter of Intent also provides that NSGold is required to make a payment of US$50,000 upon execution of the definitive Option Agreement, and to make advance minimum royalty payments as follows: US$25,000 on or before the first anniversary of the signing of the definitive Option Agreement, US$35,000 on or before the second anniversary of signing, and $50,000 on or before the third and subsequent anniversaries. The advance minimum royalty payments will be credited against a 3% production royalty based on net smelter returns from production or sale of minerals. NSGold will have the right to purchase 2% of the production royalty for US$1,500,000 prior to the commencement of production. The Letter of Intent further provides for certain bonus payments by NSGold in the event that it exercises the purchase option and certain resource thresholds are achieved. A bonus payment of US$1,000,000 will be payable to the optionor if NSGold delineates or publishes a measured or indicated resource on the Silver Hill property compliant with National Instrument 43-101 which includes a contained gold or gold equivalent content in excess of 1 million ounces. An additional bonus payment of US$2,000,000 will be payable by NSGold to the optionor if the contained gold or gold equivalent content is in excess of 2 million ounces.
NSGold's right to acquire the Silver Hill property is conditional upon the parties negotiating and signing a definitive Option Agreement.
Perry MacKinnon P. Geo., Chief Geologist, for NSGold, a qualified person as defined by National Instrument 43-101 has reviewed the information provided in this news release.
NSGold Corporation is a mineral exploration company actively exploring for gold in Nova Scotia, Canada. NSGold's principal property is the Mooseland Gold Property. NSGold's shares are listed on the TSX Venture Exchange under the symbol NSX.
This news release contains statements that may constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of NSGold Corporation ("NSGold"), or the assumptions underlying any of the foregoing. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that NSGold or its shareholders will derive. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond NSGold's control. These risks, uncertainties and assumptions include, but are not limited to, those described under "Risks and Uncertainties" in NSGold's Management Discussion and Analysis for the Year ended December 31, 2011, which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from those projected in any forward-looking statements. NSGold does not intend, nor does NSGold undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: NSGOLD CORPORATION
For further information:
Glenn A. Holmes
Chief Executive Officer, NSGold Corporation