North Peak Signs Definitive Agreement to Acquire Prospect Mountain Mine Complex in Silver-Gold-Lead District of Eureka, Nevada
North Peak Signs Definitive Agreement to
Acquire Prospect Mountain Mine Complex in
Silver-Gold-Lead District of Eureka, Nevada
www.northpeakresources.com
TSXVenture: NPR
CALGARY, AB
,
May 4, 2023
/CNW/ -
North Peak Resources Ltd.
(TSXV: NPR) (the "
Company
"
or "
North Peak
") announces it has executed a binding, definitive agreement (the "
Agreement
")
dated effective
May 2, 2023
with Solarljos LLC ("
Solarljos
") and Gullsil LLC of
Nevada
and their
respective members, for the acquisition of the Prospect Mountain Mine complex (the "
Property
")
located in the
Eureka
district of
Nevada
(the "
Transaction
"). The Property is located in
Nevada's
Battle Mountain Eureka trend, in an area known as the Southern Eureka Gold Belt and within the
Ruby Hill lead gold and silver district. The Transaction involves the issuance of up to 8 million
common shares of the Company in two phases – an initial tranche of 5 million common shares that
acquires an 80% interest in the Property, and at the Company's discretion, an additional 3 million
common shares to acquire the remaining 20% interest. The Transaction is arm's length, and its
terms and conditions are summarized below.
"The Prospect Mountain Mine complex, with its extensive shaft and mine infrastructure sits squarely
on the important geological structures driving today's
Eureka
district exploration activity and will
benefit from the various drilling and geophysics programs this historic property will receive for the
first time," said
Brian Hinchcliffe
, CEO & President
.
"Significantly our team, will be promptly
coordinating the launch of these programs and we are looking forward to working with the Erickson's
as we advance the Property."
"We regard the gold, silver and base metal potential at Prospect Mountain as immense", said
Ty
Erickson
, Director of Solarljos and Gullsil LLC. "We are excited to work with the North Peak team to
realise this potential."
Transaction and Agreement
The Agreement sets forth that a Nevada LLC will be created where the Company (through its
Nevada
subsidiary) will hold initially, an 80% interest in that Nevada LLC (the
"Initial Interest"
) and
Solarljos will hold the remaining 20% interest, and the mining claims and rights and related permits
that constitute the Property will be transferred into the Nevada LLC (the date on which this is
completed is referred to herein as the
"Formation Date"
). The Company's
Nevada
subsidiary will
act as manager for the Nevada LLC and operator of the Property. Solarljos will not be required to
contribute any funds or assume any liabilities for the benefit of the Nevada LLC or in connection with
exploration and operations at the Property on account of its 20% interest.
As described above, the Company will acquire the Initial Interest by issuing 5,000,000 common
shares to Solarljos. The Company has the right to acquire the remaining 20% interest held by
Solarljos (the
"Right"
), provided it maintains its obligations under the Agreement (summarized
below) and by issuing an additional 3,000,000 common shares to Solarljos. The Company will have
until 90 days after the third anniversary of the Formation Date to exercise the Right. If the Company
decides not to exercise the Right within this time period, then the Initial Interest is to be transferred
to Solarljos, and Solarljos will in turn return to the Company the 5,000,000 common shares that have
been issued to it.
To maintain the Initial Interest:
the Company will undertake to complete a minimum three year exploration program at the
Property where expenditures will total no less than
US$1 million
per year;
the Company will make cash payments of
US$385,000
in total per year, for each of the first
three years following completion of the Transaction, with the first of the three payments to be
made on the Formation Date; and
on the Formation Date, the Company will issue 340,000 common share purchase warrants to
those persons designated by Solarljos, and such warrants will have a five-year term and are to
be issued and priced in accordance with the Policies of the TSX Venture Exchange (the
"
TSXV
") (or otherwise as required by the TSXV).
In addition:
on the Formation Date, Solarljos will be granted a 1% NSR royalty on mineral production from
the Property;
Solarljos will have the right to nominate one director to the Board of Directors of the Company,
provided that it continues to hold at least 500,000 common shares of the Company;
the Company has the right to transfer its Initial Interest to Solarljos at any time prior to the
exercise of the Right or the deadline to exercise the Right, with the result that its annual
obligations described above will cease and the 5,000,000 common shares issued to Solarljos
will be returned to the Company; and
Solarljos has a right of reversion in the event the obligations of the Company to maintain the
Initial Interest, as described above, are not completed within the agreed deadlines, which if
exercised would result in the Initial Interest being transferred to Solarljos, who would in turn,
return to the Company the 5,000,000 common shares of the Company that have been issued to
it.
The other terms of the Agreement include representations and warranties, covenants and conditions
that are customarily seen in agreements setting forth the terms of a transaction similar to the
Transaction.
About the Prospect Mountain Complex
The Property lies in the Battle Mountain Eureka trend, in an area known as the Southern Eureka
Gold Belt, where three styles of mineralization have been identified, Au only
Carlin
style
mineralization, Carbonate Replacement mineralization (CRD) and carbonate hosted Porphyry
Related Skarn lead, zinc and gold mineralization associated with cretaceous intrusions. At the
Property, the CRD mineralization is heavily oxidized to depths of at least
610m
(2000ft) below
the top of the ridge line (see Figure 1 below).
The Property is over 1,700 acres of high elevation lands and lies within the Ruby Hill lead gold
and silver district which during the late 19
th
century was famous for its high-grade gold-silver-
lead ores. Ore was first discovered at the Property in the early 1870's with limited production
from the Diamond, Excelsior, Silver Conner, Deadbroke, and Metamoras mines, peaking in the
1890's. The mines were consolidated in the 1930's and sporadic small volume production
continued into the 1980's.
Extensive underground workings are present on the Property, with approximately eleven miles
(17.7 km) of adits, drifting and development (see Figure 2 below). Ground conditions are
excellent and the workings and stopes are largely intact and accessible, despite their
considerable age. Workings are accessed mainly through the Diamond Tunnel adit, which
penetrates westwards into the side of the ridge at 7,900 ft (
2408 m
) above mean sea level
(amsl) and joins an extensive north south trending series of workings that access multiple
historic stopes over a 5,500 ft (
1676m
) strike, accessing the 3 shafts that exist on this main
level. The shafts are open but no longer in use. Shaft 1 (500 feet depth) and Shaft 3 (770 feet
depth) are both two compartment shafts, whilst Shaft 2 is a one compartment shaft (270 feet
depth). The Diamond mine area is connected to the deeper Silver Connor tunnel by an inclined
winze from the 300-650 ft level. Shaft 4 commences on the 650 ft level and extends for 576 ft
(
175.6m
) to 6640 ft amsl, giving over 2000 ft (
609.6m
) of vertical extent to the historical
workings. The mine is dry to the lowest levels of the workings due to it being above the water
table.
Despite the 150-year history of exploration and mining at the Prospect Mountain Mine complex,
the Property contains very limited recorded drilling. Some drilling and surface sampling occurred
in 1990's and early 2000 by various optionees, but there has been no systematic modern
drilling. The surface geochemistry undertaken by Homestake (2001-2003) successfully identified
several multi-element surface geochemical anomalies on the western flank of Prospect ridge, as
well as other areas. These have not been followed up and represent high priority exploration
targets.
The Erickson family during their ownership of the Property have undertaken significant
rehabilitation work to the Property including reopening the Diamond tunnel, as well as bringing
water and power to the site. In addition, they completed a Plan of Operations which covers part
of the Property (totalling 81 acres) and entitles an operator to pursue surface exploration,
underground mining of up to 365,000 tons per annum and certain infrastructural works. It also
includes a permit to extract water from a well and to build water containment facilities.
The Transaction is subject to approval of the TSXV, which the Company is promptly seeking. It is
not expected the TSXV will impose sponsorship requirements as part of its approval of the
Transaction. No finders' fees are payable by the Company in connection with the Transaction.
Mr.
Mike Sutton
, P.Geo., a director of the Company, is the Qualified Person, as defined under
National Instrument 43-101 -
Standards of Disclosure for Mineral Projects,
who reviewed and
approved scientific and technical disclosure in this news release. The Qualified Person has not
reviewed the mineral tenure, nor independently verified the legal status and ownership of the
Property or any underlying property agreements.
Investors are cautioned that there can be no assurance that the Transaction will be
completed as proposed, or at all. In addition, the Company
can give no assurances at this
time that the Property will fulfil the Company's business development goals described
herein.
Trading in the securities of the Company should be considered highly speculative.
The Company will issue additional press release related to approvals from the TSXV for the
Transaction and other material information as it becomes available.
About North Peak
The Company is a Canadian based gold exploration and development company that is listed on the
TSX Venture Exchange under the symbol "NPR". The Company is focused on acquiring historic sites,
with low cost producing gold and other metals properties, with near term production potential and 8+
year mine life in the northern hemisphere.
Website:
www.northpeakresources.com
Figure 1: Eureka Mountain Belt Historical mines and important occurrences. (CNW Group/North
Peak Resources Ltd.)
Figure 2: Prospect Mountain Mine complex underground workings (green) and stopes (red)
projected to surface with names of main mine areas (NPR,2023) (CNW Group/North Peak
Resources Ltd.)
The TSXV has in no way passed upon the merits of the Transaction and has neither
approved nor disapproved the contents of this news release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
:
This news
release includes certain "forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not limited to,
statements with respect to
the ability to receive applicable approvals from the TSXV and applicable governmental authorities
for the Transaction, the ability of the parties to complete the Transaction, the ability of the
Company to complete the exploration programs as proposed and on the timelines suggested,
estimates of mineralization from drilling and the potential for minerals and/or mineral resources
and reserves, and
regarding the plans, intentions, beliefs, and current expectations of the Property
and the Company
that may be described herein
. Forward-looking statements consist of statements
that are not purely historical, including any statements regarding beliefs, plans, expectations or
intentions regarding the future. Such information can generally be identified by the use of
forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and
"continue" or the negative thereof or similar variations. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur.
By their nature, forward-looking statements involve numerous assumptions, known and unknown
risks and uncertainties, both general and specific, that contribute to the possibility that the
predictions, estimates, forecasts, projections and other forward-looking statements will not occur.
These assumptions, risks and uncertainties include, among other things, the state of the economy
in general and capital markets in particular,
accuracy of assay results, geological interpretations
from drilling results, timing and amount of capital expenditures; performance of available
laboratory and other related services, future operating costs, and the historical basis for current
estimates of potential quantities and grades of target zones,
as well as those risk factors discussed
or referred to in the Company's Management's Discussion and Analysis for the year ended
December 31, 2022
, available at
www.sedar.com
, many of which are beyond the control of the
Company. Forward-looking statements contained in this press release are expressly qualified by
this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this
press release. Except as required by law, the Company disclaims any intention and assumes no
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Additionally, the Company undertakes no obligation to
comment on the expectations of, or statements made by, third parties in respect of the matters
discussed above.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy
or accuracy of this release.
SOURCE
North Peak Resources Ltd.
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/May2023/04/c5138.html
%SEDAR: 00032415E
For further information:
Brian Hinchcliffe, CEO, Phone: +1-647-424-2305, Email:
[email protected]; Chelsea Hayes, Director, Phone: +1-647-424-2305, Email:
CO: North Peak Resources Ltd.
CNW 07:30e 04-MAY-23