US OTC: MMNGF Metallic Minerals Corp. Acquires Klondike Gold District Claims and Enters First Royalty Agreement on Alluvial Gold Production
TSX-V: MMG
US OTC: MMNGF
Metallic Minerals Corp. Acquires Klondike Gold District Claims and Enters First
Royalty Agreement on Alluvial Gold Production
September 11, 2017, Vancouver, B.C., Metallic Minerals Corp. (TSX-V: MMG; US OTC: MMNGF)
(“Metallic” or the “Company”) is pleased to announce that it has entered into an option agreement to
acquire a 100% interest in 36.4 square kilometres (“km2”) of mining rights (the “Property”) along the
Australia Creek drainage, a tributary to the Indian River, in the Klondike gold district near Dawson City,
Yukon. In parallel with this acquisition, Metallic has entered into a production royalty agreement with an
experienced alluvial mining operator with respect to a 2.8 km2 portion of the Property (Lower Australia
Creek). Under this agreement, the operators will have exclusive rights to mine the Lower Australia Creek
property, in exchange for a 12% royalty on all gold production payable to Metallic. The property is road
accessible and is permitted for alluvial gold production. Mining equipment has been mobilized to the site
to commence test work in September for the remainder of the northern field season.
Australia Creek is part of the historic Klondike gold district that is estimated to have produced over 20
million ounces of gold since its discovery in 1898. Australia Creek and its benches are now recognized by
Yukon Geological Survey as an eastern continuation of the highly-productive Indian River drainage, which
is the largest placer gold producing area in the Yukon. Mining on the Indian River began in the late 1970s
and has produced about 250,000 ounces or more than 40% of all placer production in the Yukon through
2015. With the expansion of larger-scale, open-pit operations, production on the Indian River has doubled
since 2010 and accounted for 46% of the Yukon’s total placer gold production in 20151.
Despite extensive mining activity nearby, Australia Creek itself was never historically mined due to its
importance as a source of water and hydro-electric power for supporting the broad scale, floating dredge
operations that were being conducted in the area by Yukon Consolidated Gold Company (YCGC) which
operated in the Klondike Region between 1920s and 1960s. The dams on Australia Creek have been
removed with only the historic diversion channels now remaining. YCGC did limited exploration churn
drilling at the mouth of Australia Creek, but no further exploration up the drainage. The mouth area is being
actively mined at present and auger drill holes on Lower Australia Creek have returned values in the
gravels similar to other parts of the Indian River, with initial test pits in 2015 to 2017 confirming the
presence of alluvial gold.
1Yukon Geological Survey (“YGS”) Yukon Placer Mining Industry Report 2010-2014
At the beginning of September, Prime Minister Justin Trudeau and Yukon Premier Sandy Silver
announced a combined $360 million in federal and territorial funding for the improvement of existing road
access in the territory as part of a demonstrated commitment to facilitating resource development. One
portion of this initiative is the upgrading of the existing public road through the Klondike gold district that
begins near Dawson City and travels along Hunker and Sulphur Creeks before reaching Australia Creek
and continuing south to the Dawson Range in the central part of the Yukon Territory.
Greg Johnson, CEO and Chairman of Metallic Minerals, noted, "We are very pleased to have acquired the
high-potential Australia Creek Property in the prolific Klondike gold district and to have entered into our first
production royalty agreement on the lower 2.8 km2 of this package. We also support the commitment by
the Federal and Territorial governments to improving infrastructure for resource development in the region,
which will benefit development at Australia Creek. Though the core focus for Metallic will remain on
exploration in the Keno Silver district, we see an opportunity to build a portfolio of production royalties from
our holdings in the Klondike region, starting with this first one on Lower Australia Creek, and to increase
the number of production royalties on the remaining large land position with additional experienced alluvial
operators over time. Test work is anticipated to be conducted starting in September and continue
throughout the remainder of the 2017 season. The alluvial mining operators are expected to make a
decision regarding full-scale production, with respect to these Lower Australia Creek claims, in early 2018.”
Terms of the Australia Creek Property option agreement are as follows:
Upon regulatory approval of the agreement, a total of $50,000 is to be paid by Metallic to the
underlying claim holders upon signing for partial reimbursement of accrued expenditures.
In December 2017, a further $25,000 is to be paid to the underlying claim holders for carrying out
consulting and supervision activities in 2017 and 250,000 shares are to be issued based on a
program of drilling, geophysics and test pitting, provided at least $75,000 has been spent on the
ground by Metallic or its operating production royalty parties.
In December 2018, another $50,000 is to be paid and 250,000 shares are to be issued based on
follow-up exploration and test mining program producing gold and at least $100,000 spent on the
ground by Metallic or its operating production royalty parties.
In December 2019, a final $50,000 is to be paid and 400,000 shares are to be issued based on
continued mining on the Australia Creek property with gold royalty production or a new mining
lease agreement with another alluvial mining operator on additional claims.
Under the option agreement on the Australia Creek Property the underlying claim holders will receive a 4%
royalty on all alluvial gold production from Metallic. Metallic can purchase each 2% of the underlying
royalty for $250,000 in cash, gold or Metallic shares at a minimum price of $0.35 per share. One of the co-
partners in this option agreement is a related party as a director of Metallic. The option agreement is
subject to regulatory approval.
Update on Keno Silver and McKay Hill Projects
Metallic Minerals has been engaged in a two-phase exploration season at its flagship Keno Silver project,
which commenced in May with targeted geophysical and geochemical surveys, stratigraphic mapping, and
trenching to further refine the identified priority targets. Diamond drilling on the project commenced in
August and is focused on testing down-dip and along-strike extensions of previously identified
mineralization along the known mineralized trends, including at some of the historic producing mines on
the property. Initial samples from drilling and continued surface work on the Keno Silver project have been
submitted for assay and results are pending. In addition to work undertaken in the Keno Hill silver district,
Metallic also engaged in a program of surface sampling and trenching at its McKay Hill silver-gold project
50 km northwest of Keno Hill. The Company expects to provide updates and results from these programs
over the ensuing weeks.
About Metallic Minerals Corp.
Metallic Minerals Corp. is a growth stage exploration company focused on the acquisition and
development of high-grade silver and gold in the Yukon within underexplored districts proven to produce
top-tier assets. Our objective is to create value through a disciplined, systematic approach to exploration,
reducing investment risk and maximizing probability of long-term success. Our core Keno Silver Project is
located in the historic Keno Hill silver district of Canada's Yukon Territory, a region which has produced
over 200 million ounces of silver and currently hosts one of the world’s highest-grade silver resources. The
Company’s McKay Hill project northeast of Keno Hill is a high-grade historic silver-gold producer. Metallic
Minerals is also building a portfolio of gold royalties in the historic Klondike gold district. Metallic Minerals
is led by a team with a track record of discovery and exploration success, including large scale
development, permitting and project financing.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Website: www.metallic-minerals.com
Email: [email protected]
Phone: 604-629-7800
Toll Free: 1-888-570-4420
Qualified Person
Scott Petsel, P.Geo, Vice President, Exploration and an employee of Metallic Minerals Corp., is a Qualified
Person as defined by National Instrument 43-101. Mr. Petsel has reviewed the scientific and technical
information in this news release and approves the disclosure contained herein. Mr. Petsel has reviewed the
results of the sampling program and confirmed that all procedures, protocols and methodologies used in the drill
program conform to industry standards.
Forward-Looking Statements
Forward Looking Statements: This news release includes certain statements that may be deemed "forward-
looking statements". All statements in this release, other than statements of historical facts including, without
limitation, statements regarding potential mineralization, historic production, estimation of mineral resources, the
realization of mineral resource estimates, interpretation of prior exploration and potential exploration results, the
timing and success of exploration activities generally, the timing and results of future resource estimates,
permitting time lines, metal prices and currency exchange rates, availability of capital, government regulation of
exploration operations, environmental risks, reclamation, title, and future plans and objectives of the company
are forward-looking statements that involve various risks and uncertainties. Although Metallic Minerals believes
the expectations expressed in such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results or developments may differ materially
from those in the forward-looking statements. Forward-looking statements are based on a number of material
factors and assumptions. Factors that could cause actual results to differ materially from those in forward-
looking statements include failure to obtain necessary approvals, unsuccessful exploration results, changes in
project parameters as plans continue to be refined, results of future resource estimates, future metal prices,
availability of capital and financing on acceptable terms, general economic, market or business conditions, risks
associated with regulatory changes, defects in title, availability of personnel, materials and equipment on a
timely basis, accidents or equipment breakdowns, uninsured risks, delays in receiving government approvals,
unanticipated environmental impacts on operations and costs to remedy same, and other exploration or other
risks detailed herein and from time to time in the filings made by the companies with securities regulators.
Readers are cautioned that mineral resources that are not mineral reserves do not have demonstrated
economic viability. Mineral exploration and development of mines is an inherently risky business. Accordingly,
the actual events may differ materially from those projected in the forward-looking statements. For more
information on Metallic Minerals and the risks and challenges of their businesses, investors should review their
annual filings that are available at www.sedar.com.
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