(via TheNewswire)
Pursuant to the Earn-in Agreement,
Highlights:
Newcrest will sole fund a minimum commitment ofUS$2,000,000 in exploration expenditures on the Lodestar project, or pay the difference to Headwater;During the staged earn-in phase,
Newcrest will have the right to earn up to a 65% interest in the Project by sole funding exploration expenditures ofUS$30,000,000 over a 6-year period;Newcrest retains the right to earn an additional 10% interest in the Project (for a total interest of 75%) by: (1) ceding a 2% Net Smelter Return (“NSR”) royalty to Headwater on claims 100% owned by the Company and a 1% NSR royalty on inlying claims subject to an underlying option agreement and (2) completing a Pre-Feasibility Study, solely funded byNewcrest which includes a minimum 1.5 million ounce gold or gold-equivalent resource within an additional 24-month period; and,Newcrest will reimburse all expenditures previously incurred by the Company on the Project through a cash payment totallingUS$77,759 .
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Figure 1. Lodestar land position showing relation to the Company’s Spring Peak project and Hecla Mining Company’s (“Hecla”) adjoining past-producing Aurora mine complex.
About the
The Lodestar project is located in the
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Figure 2. Simplified geologic map of the Lodestar project area showing zone of strong silicification and sinter exposure as well as historic rock chip sample locations.
Historic exploration at the Project focused on surface rock chip sampling of the prominent silicified ridgeline at the core of the Project, sampling of a short historic adit (Figure 2) and the completion of several shallow drill holes in this immediate area. Drilling completed on the Project by Echo Bay Exploration and Borealis Exploration in the 1980’s reportedly consisted of four shallow drill holes immediately adjacent to the silicified ridgeline, designed to test for near-surface bulk-tonnage type mineralization. Headwater has obtained assays but not the exact collar and survey information for these historic holes, the deepest of which reached a maximum total depth of 91.44 metres and contained a 10.67 m interval grading 0.29 g/t Au. The Company interprets the anomalous gold observed in the historic drilling above the interpreted epithermal boiling zone to be a positive indicator for precious metal bearing structural feeders at depth, which remain untested.
Table 1: Principal Structure of the Earn-In Agreement:
Stage | Expenditures (US$) | Newcrest Interest (%) | Time for Each Stage | |
Minimum Commitment | 0% | 24 Months | ||
Stage 1 1 | 51% 2 | 36 Months 1 from Execution Date | ||
Stage 2 | 65% | 36 Months from commencement of Stage 2 | ||
Stage 3 3 | Completion of PFS | 75% | 24 Months 4from commencement of Stage 3 | |
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Terms of the Agreement:
Stage 1:
Stage 2:
Stage 3:
Ceding a 2% NSR royalty to Headwater on claims 100% owned by Headwater and a 1% NSR royalty on claims subject to an underlying option agreement. Newcrest retains the right to buy back 50% of each NSR royalty for Fair Value at any time; and
Delivering to Headwater a Pre-Feasibility Study for the Project, solely funded by
Newcrest which includes a minimum 1.5 million ounce gold or gold-equivalent resource within an additional 24-month period following the completion of Stage 2.
2023 Work Plan:
The exploration model that the Company intends to deploy at Lodestar is similar to that used at the Company’s nearby Spring Peak project. A combination of geological mapping, surface sampling and geophysics will be utilized to further define the highest-priority targets to test for high-grade epithermal vein mineralization in interpreted structural feeder zones below and adjacent to the outcropping alteration.
The Company is planning a controlled-source audio-frequency magnetotelluric (“CSAMT”) resistivity survey to identify high-resistivity targets at depth and explore beneath the exposed epithermal alteration as well as the shallow, young volcanic cover that blankets most of the Project masking the underlying prospective geology. Concurrently, the Company intends to complete a soil sampling program. Detailed geologic mapping and infill rock chip sampling focused on the core area of exposed alteration will also be completed with the aid of high-resolution drone imagery and a digital surface model. The results of this preliminary work will be used to design a potential maiden drill campaign at the Project.
Underlying Agreement:
The Lodestar project consists of a combination of unpatented mining claims staked by Headwater and a small number of unpatented mining claims acquired through an option agreement with a private prospector (the “Vendor Claims”). By making an initial cash payment of
Agate Point Update:
Further to the Company’s news release dated
About
For more information, please visit the Company's website atwww.headwatergold.com.
On Behalf of the Board of Directors
President and CEO
+1 (775) 409-3197
cstroup@headwatergold.com
For further information, please contact:
Investor Relations Manager
+1 (778) 867-5016
bzerb@headwatergold.com
Qualified Person:
The technical information contained in this news release has been reviewed and approved by
Forward-Looking Statements:
This news release includes certain forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein including, without limitation, 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 the timing thereof, and the anticipated business plans and timing of future activities of the Company, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Often, but not always, forward looking information can be identified by words such as “pro forma”, “plans”, “expects”, “may”, “should”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, “potential” or variations of such words including negative variations thereof, and phrases that refer to certain actions, events or results that may, could, would, might or will occur or be taken or achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, risks related to the anticipated business plans and timing of future activities of the Company, including the Company’s exploration plans and the proposed expenditures for exploration work thereon, the ability of the Company to obtain sufficient financing to fund its business activities and plans, the risk that
Readers are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to update any of the forward-looking statements, except as otherwise required by law.
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