West Kirkland’s TUG Gold Project Advances, Partner Elects to Acquire Mineral Rights
October 18, 2012
VANCOUVER, BRITISH COLUMBIA, October 18, 2012 - West Kirkland Mining Inc. (WKM:TSXV) (“West Kirkland” or the “Company”) is pleased to announce that Newmont Mining Corporation (NEM:NYSE, NMC:TSX) (“Newmont”) has exercised its rights under the December 2010 Agreement between West Kirkland and Fronteer Development to acquire 35% of certain private mineral rights for six sections of the TUG property in Utah, which hosts a NI43-101 compliant gold/silver resource. The rights were held by non-active third parties and this acquisition converts the 35% into a participating interest held by Newmont within the TUG option agreement. West Kirkland recently secured the rights and Newmont then elected to acquire them under its area of interest rights in the December 2010 agreement (Newmont acquired Fronteer Development on April 18, 2011). West Kirkland continues to participate in an Exploration and Development Agreement where they can earn up to a 60% interest over all of the TUG deposit and would be the operator of the project. A royalty of 1.4% net smelter return on the acquired property will be payable.
This transaction significantly consolidates the ownership of the TUG deposit and allows the next stage of evaluation, engineering and permitting of the TUG deposit to move forward.
Under the terms of the December 2010 Agreement, West Kirkland can earn up to a 60% interest in the TUG property by spending an aggregate of $4,000,000 in exploration expenditures. After West Kirkland earns its interest, the Company and Newmont have a one-time option to both participate in the property on a pro-rata basis with each party contributing funds based on ownership. Newmont also holds a 40% interest in the balance of the sections over the TUG deposit. Newmont continues to be a significant shareholder of the Company, with approximately 9.94% of the issued and outstanding shares of West Kirkland.
In addition, West Kirkland has notified Newmont the Company has completed the first earn-in on the TUG property as defined by the December 2010 agreement. Newmont is required to register West Kirkland as a 51% title holder of the TUG property. The Company has also notified Newmont of its intention to complete its second earn in right, taking West Kirkland to a 60% interest in the TUG property. To complete its second earn in right, the Company is required to spend an aggregate of $4,000,000 on the TUG property. To date, West Kirkland has spent approximately $3,300,000 on the TUG property and to complete its second earn in right, the Company has to spend a further $700,000.
West Kirkland is currently designing and permitting a drill program to confirm and upgrade the TUG gold/silver resource and provide material for metallurgical studies. This drill program will commence shortly. The Company intends on completing a Preliminary Economic Assessment (PEA) on the TUG deposit, based on a shallow open pit mine plan targeting the near surface portion of the deposit.
Concurrent with the PEA, West Kirkland will begin permitting a mining operation on the TUG property. TUG has the advantage of being located within the State of Utah where permitting on state lands is under the oversight of the Department of Oil Gas and Minerals, which incorporates a “one window” approach to permitting.
TUG Property Details
The TUG property is located in Box Elder County Utah. West Kirkland is earning its interest in the TUG property through an option agreement with Fronteer Gold (now Newmont). The TUG property hosts a shallow oxidized gold resource that was extensively drilled by previous operators, including Noranda, Phelps Dodge and Western States Minerals. Upon optioning the property, West Kirkland completed the first three-dimensional compilation of the historic data and expanded the resource through drilling. West Kirkland completed the first NI 43-101 compliant resource estimate on the TUG deposit on May 29, 2012. The inferred TUG resource was estimated by Caracle Creek International Consultants to be 679,000 gold equivalent ounces contained in 27,110,000 tonnes grading 0.49 g/t Au and 15.8 g/t Ag using a cut-off 0.1 g/t Au. For further information on the TUG resource please refer to the Company’s June 1, 2012 news release and the technical report filed with SEDAR.
The Company’s focus in the United States is to expand and complement the TUG gold deposit through regional exploration for near surface gold deposits. The structural model for gold deposits in the Long Canyon Trend has accelerated exploration in the area since the discovery of Newmont’s large scale Long Canyon deposit. The Long Canyon Trend is delineated by the Long Canyon deposit in the south west and TUG deposit 65 kilometers to the northeast. West Kirkland has the dominant land position between the two deposits.
Data, Verification, Quality Control and Assurance
Michael G. Allen, Vice President of Exploration for West Kirkland and a qualified person as defined by NI 43-101, has reviewed and approved the technical information in this news release. He is the non-independent qualified person for the purpose of this news release.
About West Kirkland
West Kirkland was formed in 2010 to focus on gold exploration along major trends in North America. The Company has consolidated significant mineral rights positions in the Kirkland Lake area of Ontario and within major gold trends of northeastern Nevada - two of North America’s premier gold jurisdictions. The founders and Board of West Kirkland have successful gold discovery, development and mine operations experience in both Ontario and Nevada over the past 40 years.
For further information, please see the Company’s website at www.wkmining.com or contact us by email at [email protected] or call:
West Kirkland Mining Inc.
R. Michael Jones, Michael Allen or Knox Henderson at (604) 685-8311
Neither the 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.
Disclaimer for Forward-Looking Information
This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding proposed exploration activities. Although the Company believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to, the state of the financial markets for the Company’s equity securities, the state of the market for gold or other minerals that may be produced generally, recent market volatility; variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's ability to obtain any necessary permits, consents or authorizations required for its activities, to raise the necessary capital or to be fully able to implement its business strategies and other risks associated with the exploration and development of mineral properties. The reader is referred to the Company's public filings for a more complete discussion of such risk factors and their potential effects which may be accessed through the Company’s profile on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors Regarding Estimates of Inferred Mineral Resources
This press release uses the terms “inferred mineral resources.” We advise U.S. investors that while these terms are recognized and required by Canadian regulations, the SEC does not recognize them. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimates of “inferred mineral resources” may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute “reserves” as in-place tonnage and grade without reference to unit measures. The terms “contained gold ounces” and “contained silver ounces” used in this press release are not permitted under the rules of the SEC. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally mineable.