(TheNewswire)
Vancouver, British Columbia – TheNewswire - April 20, 2023: Headwater Gold Inc. (CSE:HWG) (OTC:HWAUF) (the"Company" or "Headwater") is pleased to announce it has finalized drilling plans for themaiden drill program at the Midas North project, located directlynorth and adjacent to the historic high-grade Midas gold-silver minenow owned by Hecla Mining Company (“Hecla”). Headwater’smaiden Midas North exploration drill program is fully funded byNewcrest Mining Limited (“Newcrest”), pursuant to the option andearn-in agreement announced on August 16, 2022.
Highlights:
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Multiple priority drill targets have been identifiedwithin the multi-kilometre epithermal alteration footprint at MidasNorth;
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Drill plans have been finalized with Newcrest for atwo-rig maiden drill program projected to consist of up to an initial3,000 metres;
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Drill permits have been received and drilling iscurrently scheduled to commence in early June 2023;
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Recent geologic mapping and hyperspectral alterationmapping, combined with previously announced geophysics, havefacilitated detailed targeting of potential mineralized feederstructures at depth;
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Headwater’s drill program will represent thefirst-ever modern exploration drilling within the Midas North landposition; and,
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In addition to Midas North, Headwater is finalizingplans for drill programs for the Spring Peak, Katey, and Mahoganyprojects. In total, the Company is expecting 5 to 6 drill rigs to bein operation across the Headwater portfolio during the summer drillseason.
Caleb Stroup, the President and CEO of the Company,states: “We are extremelyexcited about the upcoming drilling at Midas North which is located ina highly prospective region of Nevada that has a proven history ofhigh-grade epithermal gold discoveries. Our team is confident thatthe Midas North project has the potential to yield a new discovery andwe are committed to utilizing the very best exploration techniques tounlock its full potential. Through our partnership with Newcrest, wehave compiled a comprehensive geologic and geophysical dataset thathas allowed us to generate numerous high-priority drill targets. Headwater interprets Midas North to represent a fully preservedepithermal alteration cell with no known historic drilling completedon the project. This upcoming drill program presents Headwatershareholders with a rare opportunity to be the first to explore thisportion of the Midas District, which hosts multiple past producinghigh-grade veins at the historic Midas Mine immediately to thesouth.”
Figure 1: Map of the Midas high-grade veindistrict in northern Nevada. Headwater Gold’s Midas North projectadjoins Hecla’s past producing Midas Mine complex, encompassinganother large epithermal alteration cell north along the trend of theMidas Mine.
Geologic andHyperspectral Alteration Mapping :
A geologic mapping and alteration study was completedwhere structure, lithology, and alteration were mapped in the fieldand an airborne hyperspectral survey was used to classify clayalteration mineralogy. The results from the survey correlate verywell with mapped silica alteration and structures which are oftenassociated with gold-silver mineralisation at depth. Abundantkaolinite and alunite alteration overlies mapped structures along theBig Opal and Nevada Grande fault corridors (Figure 2) with the mostintense clay alteration occurring in the hanging wall of the Big Opalfault, surrounding the mapped extent of a true sinter exhibitingfossilized geyser vents. Kaolinite and supergene alunite are commonminerals associated with steam-heated alteration in the upper portionsof fully preserved epithermal systems and often serve as indicatorsfor potential mineralized feeder structures at depth. Shallowpost-mineral gravel cover in the northern half of the project arealimits the effectiveness of surface mapping but provides additionalexploration upside under cover.
Figure 2: Hyperspectral mineralogy maphighlighting zones of abundant alunite and kaolinite alterationrelative to mapped silica alteration and faults.
Midas North DrillTargets :
Final drill target selection at Midas North (Figure 3) has beencompleted by synthesizing detailed geological mapping, hyperspectralalteration mapping and multiple geophysical datasets. Multiple faults associated with mapped alteration bisectthe Midas North property and will be tested for high-grade epithermalmineralization in the epithermal boiling zone at depth. Thesestructures have been identified through a combination of geologicmapping and interpretation of controlled-source audio-frequencymagnetotelluric (“CSAMT”) resistivity geophysics. Individualdrill targets were ranked using multiple criteria including alterationintensity, structural complexity, pathfinder element geochemistry andgeophysical characteristics. Three primary fault corridors will betargeted in the 2023 drilling, with an initial focus in the Big Opalsinter area where a structurally-controlled high-resistivity featureunderlies silica sinter and is surrounded by intense alunite andkaolinite alteration (Figures 2, 3, and 4).
Figure 3: Drill targets and planned drillholes for the maiden drill program at Midas North which is interpretedto represent a fully preserved epithermal system. Section A-A’corresponds to Figure 4.
Figure 4: Interpretive cross section throughsection A-A’ with CSAMT geophysics apparent resistivity profile,modelled geology and planned drill holes.
The Big Opal resistivity anomaly (see news releasedated January 23, 2023) underlies the length of the Big Opal faultcorridor and is interpreted by Headwater geologists to represent abroad area of intense silicification, potentially relating toepithermal feeders at depth. Two main high-angle faults appear tocut this resistivity feature (Figure 4) and represent the primaryfeeder targets that the Company intends to drill test within theprojected epithermal boiling zone at approximately 200 metres verticaldepth.
Detailed geological mapping in the Big Opal area hasidentified a large area of silica sinter with a number of diagnosticsilica sinter features including silicified microbial mats, reed castsand geyser vents. This sinter is surrounded by multiplecrater-shaped closed depressions approximately 50 metres in diameterand 5 metres in depth containing opaline silica and recessive clayalteration. Headwater geologists interpret these craters as largeepithermal collapse structures, analogous in form to similarstructures found in modern geothermal systems, including the ChampagnePool hot spring in New Zealand (Figure 5). Champagne Pool isparticularly a well-studied active geothermal system that serves as aglobal analog for fossil geothermal systems. Direct comparison ofthe sinter characteristics, geothermal features and footprints of bothareas suggests the Big Opal sinter area alteration was developed asthe result of a high-energy geothermal system which vented to surfaceand implies potential for mineralized feeder structures at depthimmediately below this alteration.
2023 Drill Program:
A multi-rig, mixed reverse circulation and diamond coredrill program has been planned and is currently scheduled to commencein June, 2023. Authorization for drilling has been granted by theBureau of Land Management and drill contracts are in place. Theinitial Midas North drilling is projected to consist of an initial 8to 12 holes with drill depths ranging from 250 metres to 400 metres. This program will represent the first known exploration drillingcampaign within the Midas North land position.
Figure 5: Comparison of sinter and geothermal(hot-spring-related) features at Midas North (top) and Champagne Pool,New Zealand (bottom). Champagne Pool is a globally recognized modernanalog for low-sulfidation epithermal systems. Photos demonstratethe comparable sinter characteristics, collapse structures and therelative scale of the two systems, which indicates the potential forMidas North to represent a robust and fully preserved epithermalsystem.
About the Midas North Project:
Headwater’s 100% owned and royalty-free Midas Northproject adjoins Hecla Mining Company’s (NYSE: HL) Midas Mine complexand covers a large hydrothermal alteration cell, extending at least 4kilometres in strike and 1 kilometre in width. Rock chip and streamsediment samples collected by the Company from the project area havehighlighted several priority areas of anomalous precious metal valueswith highly anomalous values of epithermal pathfinder elements (seeHeadwater news release dated October 4, 2021). Extensive epithermalalteration exists on the project, including widespread zones ofhigh-level chalcedonic to opaline silica flooding, clay alteration andlocal sinter formation, including fossilized geyser vents. Theproject has seen very limited historic exploration with no documentedexploration drilling. The Company believes the project has potentialfor epithermal mineralization at depth.
Option and Earn-in Agreement withNewcrest:
Newcrest will sole fund a firm minimum commitment ofUS$2,000,000 in exploration expenditures on the Midas North project orpay the difference to Headwater.
During the staged earn-in phase, Newcrest has the rightto earn up to an initial 65% interest in the Midas North project bysole funding exploration expenditures (inclusive of the minimumcommitment) of US$30,000,000 over a 6-year period.
Newcrest retains the further right to earn anadditional 10% interest in the project (for a total interest of 75%)by ceding a 2% net smelter return royalty to Headwater subject tocertain partial buydown rights and completing a Pre-Feasibility Study,solely funded by Newcrest and which includes a minimum 1.5 millionounce gold or gold-equivalent resource within an additional 24-monthperiod.
The Midas North project is one of four Headwaterprojects under option and earn-in agreements with Newcrest (see newsrelease dated August 16, 2022 for information on all Newcrest optionand earn-in agreements).
About Headwater Gold:
Headwater Gold Inc. (CSE: HWG, OTCQB: HWAUF) is atechnically-driven mineral exploration company focused on theexploration and discovery of high-grade precious metal deposits in theWestern USA. Headwater is aggressively exploring one of the mostwell-endowed and mining-friendly jurisdictions in the world with agoal of making world-class precious metal discoveries. Headwater hasa large portfolio of epithermal vein exploration projects and atechnical team comprised of experienced geologists with diversecapital markets, junior company and major mining company experience. The Company is systematically drill testing several projects inNevada, Idaho, and Oregon and in August 2022 announced a significanttransaction with Newcrest Mining Limited where Newcrest acquired a9.9% strategic equity interest in the Company and entered into optionand earn-in agreements on four of Headwater’s projects.
For more information, please visit the Company'swebsite at www.headwatergold.com .
On Behalf of the Board ofDirectors
Caleb Stroup
President and CEO
+1 (775) 409-3197
For further information, please contact:
Brennan Zerb
Investor Relations Manager
+1 (778) 867-5016
Qualified Person:
The technical information contained in this newsrelease has been reviewed and approved by Scott Close, P.Geo (158157),a “Qualified Person” (“QP”) as defined in National Instrument43-101 – Standards of Disclosure for Mineral Projects.
Forward-Looking Statements:
This news release includes certainforward-looking statements and forward-looking information(collectively, “forward-looking statements”) within the meaning ofapplicable Canadian securities legislation. All statements, other thanstatements of historical fact, included herein including, withoutlimitation, statements regarding future capital expenditures,exploration activities and the specifications, targets, results,analyses, interpretations, benefits, costs and timing of them,Newcrest’s anticipated funding of the earn-in projects and thetiming thereof, and the anticipated business plans and timing offuture activities of the Company, are forward-looking statements.Although the Company believes that such statements are reasonable, itcan give no assurance that such expectations will prove to be correct.Often, but not always, forward looking information can be identifiedby words such as “pro forma”, “plans”, “expects”,“may”, “should”, “budget”, “scheduled”,“estimates”, “forecasts”, “intends”, “anticipates”,“believes”, “potential” or variations of such words includingnegative variations thereof, and phrases that refer to certainactions, events or results that may, could, would, might or will occuror be taken or achieved. Forward-looking statements involve known andunknown risks, uncertainties and other factors which may cause theactual results, performance or achievements of the Company to differmaterially from any future results, performance or achievementsexpressed or implied by the forward-looking statements. Such risks andother factors include, among others, risks related to the anticipatedbusiness plans and timing of future activities of the Company,including the Company’s exploration plans and the proposedexpenditures for exploration work thereon, the ability of the Companyto obtain sufficient financing to fund its business activities andplans, the risk that Newcrest will not elect to obtain any additionalinterest in the Projects in excess of the minimum commitment, theability of the Company to obtain the required permits, changes inlaws, regulations and policies affecting mining operations, theCompany’s limited operating history, currency fluctuations, titledisputes or claims, environmental issues and liabilities, as well asthose factors discussed under the heading “Risk Factors” in theCompany’s prospectus dated May 26, 2021 and other filings of theCompany with the Canadian Securities Authorities, copies of which canbe found under the Company’s profile on the SEDAR website atwww.sedar.com.
Readers are cautioned not to placeundue reliance on forward-looking statements. The Company undertakesno obligation to update any of the forward-looking statements, exceptas otherwise required by law.
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