(TheNewswire)
VANCOUVER, BRITISH COLUMBIA – TheNewswire - April 19, 2023 – Four Nines Gold Inc. (CSE:FNAU ) , ( OTC:FNAUF) ( “ FourNines ” or the “ Company ” ) is pleasedto announce it has entered into an ExplorationAgreement and Option with a Kinross Gold U.S.A.Inc., subsidiary, Kinam Gold Inc. (“ Kinam ”) to exploreand evaluate certain fee lands and unpatented mining claims in LassenCounty, California known as the Hayden Hill Property (the“ Property ”), including the past-producing Hayden Hill gold mine. Under this agreement, the Company has the option to purchase all ofthe shares of Lassen Gold Mining Inc. (“ Lassen ”), a Nevadacorporation and wholly owned subsidiary of Kinam that holds all right,title and a 100% undivided interest in the Property. Kinam acquiredthe Property in 1998 from AMAX Gold Inc., (“ AMAX ”).
The Hayden Hill open pit mine, carbon-in-pulp mill, andheap leach plant were in operation by AMAX from 1992 – 1997. Heapleach processing continued through 2000 by Kinam. Total processedmaterial was approximately 31 million tons at a head grade of 0.024troy ounces of gold per ton, with 483,000 troy ounces of gold and 1.4million troy ounces of silver recovered. There has been no systematicproperty exploration since the mine closure in 1997.
Charles Ross, CEO, President, and Director of FourNines, said, “Our world-class geological team has done significantdue diligence and is very excited to enter into this agreement andbegin the exploration of the Hayden Hill mine. We are targeting amultimillion-ounce high-grade gold deposit. Our exploration teambelieves the Hayden Hill project has potential for significant upsidefor all shareholders.”
In a 1989 Feasibility Study, AMAX calculated “provenand probable” resources of 57,775,00 tons at a gold grade of 0.032troy ounces per ton (1.10 g/tonne) and “possible” resources of8,847,000 tons at a gold grade of 0.024 troy ounces (0.82 g/tonne),for 1,999,000 total oz of gold. These historical estimates weretabulated at a 0.01 troy ounce per ton gold cut-off grade. Theseresources were estimated prior to theimplementation of National Instrument 43-101Standards of Disclosure for Mineral Projects (“NI 43-101”) . These estimates use categories other than the ones set out in theCanadian Institute of Mining, Metallurgy and Petroleum’s “CIMDefinition Standards - For Mineral Resources and Reserves, Definitionsand Guidelines” (“CIM Standards”) and are therefore not inaccordance with NI-43-101 and should not berelied upon . The AMAXresource block model was calculated using 80-foot by 80-foot by20-foot blocks. Gold was estimated for each block using a multipleindicator kriging approach. Silver was estimated using ordinarykriging. Blocks estimated with a minimum of eight data points withina search distance of 80 feet were classified as Proven; blocks witheight data points within a distance of 160 feet were classified asProbable; and blocks extending up to 200 feet were classified asPossible. A substantial portion of thesehistorical resources was mined by AMAX in 1992 – 1997; however, thisinformation is relevant for historical completeness and explorationplanning purposes.
A qualified person has not donesufficient work to classify the historical estimate as current mineralresources or mineral reserves, and the Company is not treating thehistorical estimate as current mineral resources or mineralreserves . However, theCompany believes that it could be indicative of the presence ofmineralized material remaining within the Hayden Hill property. Insufficient work has been done to determine what explorationactivities need to be conducted to upgrade the remaining historicalresources to current mineral resources.
The Company’s exploration team has reviewed thehistorical exploration database. It includes various reports andincomplete records for 327,514.5 feet (99,826.42 meters) of drillingin 742 holes. The team has also analyzed the AMAX production blasthole database, which consists of 112,000 assays with locationcoordinates. The review of this drill data in a three-dimensionalsoftware system indicates that drill intersections, which averagehigher than the AMAX Gold cut-off grades, are present with the wallsof, and beneath, the current Pit. Four Nines’ geological team,through limited field investigations, has identified zones of pervasive silicification, hydrothermalbreccias, quartz veining and quartz stockworks – all favourablesites for the deposition of precious metal mineralization. Thesuitability of various geophysical survey techniques to aid in theidentification of potential mineralized material is currently beingevaluated.
Under the terms of the agreement, Four Nines isrequired to:
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Cash payment of US$50,000 upon entry into the agreement(paid);
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Cash payment of an additional US$60,000 on or beforeMarch 1, 2023 (paid);
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Cash payment of an additional US$100,000 on or beforeNovember 1, 2024;
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incur at least US$250,000 in qualified expenditures onor before March 1, 2023;
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incur at least an additional US$500,000 in qualifiedexpenditures on or before November 1, 2024; and
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incur at least an additional US$500,000 in qualifiedexpenditures on or before November 1, 2025.
The obligation to fund $250,000 in qualifiedexpenditures on or before March 1, 2023, is a firm commitment, withall other obligations being at the sole option and discretion of theCompany.
At any time prior to November 1, 2025, the Company mayelect to purchase all of the shares of Lassen and indirectly acquirethe Property in consideration for: (i) Lassen (once owned by theCompany) granting a 2.0% net smelter returns royalty on all mineralsproduced and sold from the Property (the “ Reserved Royalty ”);(ii) the Company advancing a cash payment of US$2,000,000 less anyoption payments advanced by the Company to Lassen under the agreement;and (iii) the assumption of any bonds, guarantees, or other financialassurances provided or guaranteed by Kinam or its affiliates inrespect of the Property which total is currently estimated to beUS$1,449,533. This assumed amount is subject to an adjustment clausewhereby, if the such assumed amount has increased as of the closingdate of the Lassen acquisition, the Company may offset the increasedassumed amount up to a maximum offset of US$3,600,000, with thepurchase price for the Lassen acquisition being reduced up to amaximum of US$500,000 and any additional increase in the assumedamount (i.e. in excess of US$500,000) being offset against futureproduction royalty payments payable under the Reserved Royalty, up toa maximum royalty offset of US$3,100,000. The Reserved Royalty issubject to a buyback right whereby the Company may buyback 0.5%(leaving a Reserved Royalty of 1.5%) by paying the royalty holderUS$1.9 million within seven years following the signing of theagreement. The Company has determined that the entry into theagreement constitutes a “Significant Transaction” in accordancewith Policy 7 of the Canadian Securities Exchange.
David Flint, MSc., AIPG CPG, a Qualified Person asdefined in National Instrument 43-101, and a director of the Company,has reviewed and approved the technical information in this pressrelease.
About Four Nines Gold Inc.
Four Nines Gold Inc. has the right to acquire 100% ofthe Hayden Hill Mine from a Kinross Gold USA Inc subsidiary. TheCompany is exploring and developing the project in mining-friendlyNorthern California. Hayden Hill is a former producing mine with99,862.42 meters of drilling in 742 holes and no systematic propertyexploration since the mine closed in 1997. Four Nines Gold Inc.continues to hold an option to acquire 100% interest in the Bonnevillegold-silver-copper project in central Quebec. For more information,please get in touch with the Company at info@fourninesgold.ca or visit ourwebsite at www.fourninesgold.ca for project updates and related backgroundinformation.
ON BEHALF OF THE BOARD OF DIRECTORS
FOUR NINES GOLD INC.
Charles Ross
President
1000 - 409 Granville Street
Vancouver, BC, V6C 1T2
Tel: 604.602.0001
Forward-looking statements
This press release contains forward-looking statementsand forward-looking information within the meaning of Canadiansecurities laws (collectively, “forward-looking statements”).Statements and information that are not historical facts areforward-looking statements. Forward-looking statements are frequently,but not always, identified by words such as “expects”,“anticipates”, “believes”, “intends”, “estimates”,“potential”, “possible” and similar expressions, or statementsthat events, conditions or results “will”, “may”, “could”or “should” occur or be achieved. Forward-looking statements andthe assumptions made in respect thereof involve known and unknownrisks, uncertainties, and other factors beyond the Company’scontrol. Forward-looking statements in this press release includestatements regarding beliefs, plans, expectations, or intentions ofthe Company. Mineral exploration is highly speculative andcharacterized by several significant risks, which even a combinationof careful evaluation, experience and knowledge may not eliminate.Forward-looking statements in this press release are made as of thedate herein. Although the Company believes that the assumptions andfactors used in preparing the forward-looking statements in this pressrelease are reasonable, undue reliance should not be placed on suchstatements. The Company undertakes no obligation to update publicly orotherwise revise any forward-looking statements, whether as a resultof new information or future events or otherwise, except as may berequired by law.
Neither the Canadian SecuritiesExchange nor its regulation services provider accepts responsibilityfor the adequacy or accuracy of this news release.
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