Pancontinental Acquires Advanced Nickel-Cobalt-Copper Project IN Southern Ontario with TWO Defined Deposits
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April 26, 2018
PANCONTINENTAL ACQUIRES ADVANCED NICKEL-COBALT-COPPER
PROJECT IN SOUTHERN ONTARIO WITH TWO DEFINED DEPOSITS
Pancontinental Gold Corporation (TSX -V:PUC) (“Pancon” or the “Company”) has entered into
an option agreement (the “Agreement”) effective April 25, 2018 with Hastings Highlands
Resources Limited (“Hastings”) to earn up to 76% of the McBride Nickel -Cobalt-Copper Project
(the “McBride Project or the “Project”), located in Limerick Township, 25 kilometres south of
Bancroft, Ontario. If Hastings, a private company, chooses not to fund its share of the joint venture
after 76% is earned, Pancon can fully fund the joint venture and increase its ownership to 90%.
The McBride Project, covering 880 hectares, contains Historical Resources of an estimated 5.1
million tons of near -surface nickel -cobalt-copper mineralization. It includes : the North Zone
deposit, the South Zone deposit, and the South Extension prospect [Reno Pressacco, Micon
International Limited (“Micon”), 2004, NI 43-101 Technical Report]. The Project was discovered
in the 1960s and diamond drill tested with more than 90 holes by Macassa Gold Mines Limited
(“Macassa”) and Long Lac Minerals Limited (“Long Lac”), which later acquired control of
Macassa. In 1971, Long Lac produced the following Historical R esource estimate
[Pressacco/Micon, 2004; and Robert Chataway, 2015, NI 43-101 Technical Report]:
North Zone: 3.9 million tons grading 0.82% nickel, 0.054% cobalt and 0.25% copper;
South Zone: 1.2 million tons, grading 0.30% nickel, 0.03% cobalt and 0.14% copper.
The foregoing Historical Resource estimates presented above were completed prior to the
implementation of the NI 43 -101 requirements; however, given the high quality of the historic
work completed and the respective mining companies’ reputations and production history of the
previous Project owners, Pancon believes the Historical Resource estimates to be both relevant
and reliable. In addition, a Qualified Person has not completed sufficient work to classify these
historic mineral reso urces as current mineral resources; and the Company is not treating the
Historic Resources as current.
Pancon President and CEO, Layton Croft, stated: “Addi ng t his advanced stage nickel -cobalt-
copper Project to Pancon’s growing battery metals portfolio is a game changer. Given today’s
prices and market outlooks for nickel, cobalt and copper compared to 1971 when Long Lac planned
to mine these deposits, we believe there is exceptional exploration and development potential . Its
prime location and excellent i nfrastructure will keep costs and project risk down. The Project
development plan is to re-sample existing core, conduct infill and exploration drilling, verify and
possibly increase known resources, and produce an updated NI 43 -101-compliant Technical
Report. Following that will be state -of-the-art airborne versatile time domain electromagnetic
(VTEM) surveys and airborne gravity surveys, as well as soil geochemical surveys, in order to
identify and drill new targets, followed by metallurgical testing on f resh drill core and the
completion of a Preliminary Economic Assessment.”
365 Bay St, Suite 400
Toronto, Ontario
M5H 2V1
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Option Agreement Highlights
Pancon has the exclusive right to acquire up to a 76% interest in the McBride Project through three
option stages. The first option, for an initial 26% interest, requires the Company: to pay $142,500
in cash plus applicable 2017 property taxes; to issue 500,000 Common Shares of the Company to
Hastings; and to spend a minimum of $1.5 million on the Project within the first year of the option
period. The second option, for an additional 25% interest and a total of 51% ownership, requires
the Company: to make annual payments of $142,500 in cash plus applicable property taxes; and
to spend at least $3 million on work essential to producing a Scoping Study (Preliminary Economic
Assessment), during the next four years. The third option, for an additional 25% interest and a total
76% ownership, requires the Company to : to make annual payments of $142,500 in cash plus
applicable property taxes until the property is in production; and to complete a Feasibility Study
by the end of the sixth year of the option period.
Once Pancon earns 76%, Pancon and Hastings will form a joint venture. If Hastings chooses not
to fund its share of the joint venture, Pancon can fully fund the joint venture and increase its earned
share to 90%, with Hastings retaining a 10% free -carried interest. When the Project becomes a
producing mine, Pancon and Hastings will assume responsibility for paying the 16 mineral rights
holders their respective share of 1.75% net smelter returns (NSR) royalty payments. If Pancon’s
ownership increases to 90%, Pancon will assume full responsibility for the NSR payments, noting
that the 1.75% NSR can be reduced by 0.75%, to a 1% NSR, for a payment of $1 million.
Pancon and Hastings have formed a 4 -person Project Management Committee, with two
representatives from each company. Pancon has appointed Layton Croft, its President, CEO and
Director, and David Mosher, the Company’s founding Director and member of its Technical
Advisory Committee. Hastings has appointed its Chairman, Derek McBride, and its President,
Angus Ross. The Management Committee will prepare and approve work programs and budgets,
review quarterly progress reports, and monitor results during the option period. Decisions of the
Management Committee will be made by majority vote, with Pancon having the casting vote.
Project Development Plan
Pancon, in partnership with Hastings, has develope d a cost -effective project development plan
that, pending funding, aims to deliver the following:
an updated NI 43-101-compliant Technical Report;
a Scoping Study (Preliminary Economic Assessment); and
a Feasibility Study.
In May 2018, the Company plans to begin digitizing all available data and surveys, compiling
down-hole survey data, and planning a new drill program. The 70 drill holes from 1969-1970 will
be re-logged and re -sampled since hole locations are known, all col lars remain, and most were
surveyed precisely. The surface exploration program will focus on the eastern contact of the Thanet
Complex, along strike from both the North and South Zones.
Phase 1 of the project work program will include re-establishing grid lines, prospecting, geological
mapping, stripping, trenching, geochemical surveys, and state -of-the-art airborne gravity and
versatile time domain electromagnetic (VTEM) geophysical surveys. Phase 2 will include infill
drilling to test and confirm previous drill results, and exploration drilling on new targets generated
in Phase 1, all to support an updated NI 43 -101 resource estimate for the North Zone and South
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Zone. Phase 3 will include metallurgical work on fresh core that is not oxidized, in order to see
base metal recoveries as well as precious metal content and recoveries.
The technical team leader and Qualified Person for the McBride Project is Hastings’ Chairman,
Dr. Derek McBride, P.Eng., who possesses 40 years of professional experience as a geological
engineer and structural and economic geologist. McBride is credited with discovering the Nugget
Pond Gold Mine in Newfoundland, Canada, as well as the Reward Gold Deposit in New South
Wales, Australia. His written reports cover deposits in 16 countries around the world and include
most types of precious and base metal deposits. A Toronto native with a Diploma of Mining
Technology from the Haileybury School of Mines, B.Sc. and M.Sc. degrees in geological
engineering from Queen’s University, and a Ph.D. in structural and economic geology from the
University of New Brunswick, McBride has been diligently studying for more than 17 years what
Pancon has named the McBride Project.
McBride Project Highlights
Strategic Context
The Project is located in Limerick Township, 25 kilometres south of Bancroft, 80 kilometres north
of Belleville, and 250 kilometres east -northeast of Toronto. The property is easily accessible via
Provincial Highway 62 and then by a gravel road for approximately 1.5 kilometres. A s econdary
power line runs to within 1 kilometre of the Project’s North Zone, and the major Provincial power
grid crosses Highway 62 about 17 kilometres south of the Project [Chataway, 2015]. The Project
is proximal to the Canadian National Railway network, providing the opportunity to cost
effectively transport future concentrate to the nearest nickel smelting facility, in Sudbury.
The 880-hectare property consists of 41 fifty-acre half lots [Chataway, 2015]. Land titles are Fee
Simple Grants, Patented Mini ng Claims with surface and mineral rights or mineral rights only,
plus staked claims. Crown lands were staked by Hastings [Chataway, 2015]. Limerick Township
is a rural area with minor logging operations and no other industrial activity, and it has little
farming in the area due to a lack of arable soil and the cold mid-Ontario climate. The general region
around Bancroft has a long history of minerals exploration and mining; Bancroft is the nearest
community with necessities and accommodations for the rural population.
Salient History
Pancon has possession of Macassa’s September 29, 1970 Interim Report on its Feasibility Study
of the Project, conducted by W.A. Moore, P.Eng.. According to the Report, “it would appear that
the property could be brought succe ssfully into production and that it would make a profit,
provided that the ore reserve grade of 0.253% copper, 0.825% nickel and 0.054% cobalt…will
stand up.” The Report discusses four other factors that must be considered before going into
production, including “metallurgy, metal prices, tax climate, and the ore picture at depth” (Moore,
1970). The Report refers to “initial metallurgical test results which showed that recoveries of 95%
for copper and 85% for nickel and cobalt were possible” (Moore, 1970). The Report models three
production scenarios: 1,000 tons per day, 1,250 tons per day, and 1,500 ton s per day (Moore,
1970). However, sudden changes in Long Lac/Macassa corporate leadership and a decision to
focus on gold projects resulted in the Project not becoming a mine at the time. Long Lac sold the
Project in 1999.
Limerick Mines Limited (“Limerick”) acquired the Project, and in 2003 engaged Micon to
complete a National Instrument 43 -101-compliant Technical Report on the Project (which was
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filed on SED AR in October, 2004). Limerick conducted geophysical surveys and drilled 8
diamond drill holes, including 5 verification holes twinning historic drill holes, on the North Zone.
Limerick designed a work program to confirm the Historical Resource estimate, produce a NI 43-
101-compliant resource estimate, and produce a Scoping Study. The 2004 Micon Technical Report
concluded that the twinning drill results es sentially supported the Long Lac results, and agreed
with the work program proposed by Limerick. Unfort unately, the Limerick work program was
never completed. Hastings acquired the Project in 2010, and was left with the task of re-negotiating
agreements with all the landowners. Hastings also conducted limited geochemical and geophysical
surveys, led by Hast ings’ Chairman, Dr. Derek McBride, which resulted in discovery of the
Project’s Southern Extension prospect. In 2015, Hastings engaged Robert T. Chataway, P.Geo., to
produce an updated NI 43-101 Technical Report on the Project.
Technical Highlights
According to S. B. Lumbers, in his 1969 “Geology of Limerick and Tudor Townships” report on
file at the Ontario Department of Mines [Geological Report 67, page 75], an article published in
the Northern Miner on April 12, 1962 described Macassa’s resource estimat e based on the 23
diamond drill holes it drilled in 1960 -61. According to Lumbers [1969, page 75] referencing that
1962 Northern Miner article: “Average nickel assays as high as 1.77% over 66 feet (20 metres)
and as low as 0.52% over 21 feet (6.4 metres) h ave been obtained. Copper is rarely present in
amounts greater than 0.5%, and, in general, copper assays are highest where nickel assays are
highest. Cobalt is present in the mineralized zone in amounts generally less than 0.1%, and traces
of gold and silver are common.”
In the 1960s, Macassa drilled 23 holes (totalling 4,157 metres of core) on the North Zone, after
which Long Lac drilled another 70 holes (totalling 12,800 metres of core) on both the North Zone
and the South Zone [Pressacco/Micon, 2004]. The North Zone deposit was outli ned with a strike
length of 200-250 metres, to a vertical depth of approximately 300 metres. The South Zone deposit,
located 1,200 metres south-southwest of the North Zone deposit, was outlined with a strike length
of 360 metres, to a vertical depth of 150 metres. Both the North Zone and South Zone deposits are
open at depth and along strike [Pressacco/Micon, 2004].
According to the 2004 NI 43 -101 Technical Report by Reno Pressacco, M.Sc. and P.Geo., of
Micon International Limited [page 15], “The North Zo ne has a core of massive to semi -massive
sulphides surrounded by a halo of disseminated sulphides. The sulphides are dominated by
chalcopyrite, pyrrhotite, and pentlandite. The distribution of sulphide minerals indicates that the
North Zone consists of a band of massive sulphide mineralization that strikes north-south and dips
west at about 75 degrees. This mineralization has been traced along a strike length of some 200 -
250 metres, and is in the form of a “J,” with the best grade mineralization located alo ng the base
of the “J.” The plunge of the mineralization is to the north between 70 -80 degrees, and remains
open below a depth of approximately 300 metres. The northern strike extension of the
mineralization also remains untested. In the central part of th e North Zone, multiple bands are
present in the same hole. Such a pattern strongly suggests that the band has been deformed,
producing folds plunging north at a steep angle. Fold repetition produces a mineralized pod some
90 metres in diameter in the base of the “J.” The long arm of the “J” strikes in a northward
direction, and the short arm strikes in a westward direction.”
Pressacco [2004, page 15] continues: “The South Zone is subdivided into a north and south section.
Previous drilling has outlined min eralization, also consisting of pyrrhotite, chalcopyrite, and
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pentlandite, along a strike length of 360 metres and for depths up to 150 metres.”
Resource Expansion and Precious Metal Potential
According to the 2015 NI 43 -101 Technical Report by Robert T. Chataway, P.Geo. [page 19]:
“For the most part, the strike and depth limits of these zones have not been identified by these
historical drill holes. In the writer’s opinion, there remains potential for the discovery of
concentrations of more nickel -copper sulphide mineralization in the vicinity of the North and
South Zones. As well, the strike length of the eastern contact of the Thanet Complex has not been
fully evaluated for its potential to host nickel -copper mineralization, and this area is an attractiv e
target for exploration activities. The author agrees with Micon’s [2004] conclusion that the
presence and approximate grades of nickel-copper mineralization at the North Zone are reliable as
‘Historical Resources.’ As well, the author is satisfied that the quality of information presented for
the South Zone is of sufficient calibre to use as a guide for exploration activities. Potential risks to
the project are a change in commodity prices.”
In addition to the above, historical drill logs from Long Lac show evidence of precious metals,
including gold, silver, platinum and palladium. According to Chataway [2015, page 16], “early in
the exploration history of this property, the lack of assay values for platinum and palladium can be
attributed to the high cost of an individual assay and the low commodity prices for platinum and
palladium. It wasn’t until the late 1980s and early 1990s that assay costs and analytical reliabilities
became acceptable for use in applications of exploration programs. Along with higher commodity
prices and increased demand, the inclusion of precious group metal value became more common
in the evaluation of nickel-copper deposits.”
Pancon: A Rapidly Growing Battery Metals Explorer and Developer
The advanced stage McBride Project enables Pancon to dramatically build on its new battery
metals commodity focus, taking advantage of rising market demand and prices for cobalt, nickel
and copper. Like the Company’s Montcalm West Nickel -Cobalt-Copper Project near Timmins,
Ontario, and the Company’s Jefferson Gold Project in South Carolina, Pancon’s new McBride
Nickel-Cobalt-Copper Project is:
A highly prospective, under-explored project in a proven historic mining region; and
Located in a safe, low -risk jurisdiction with a stable, predictable and pro -mining legal,
regulatory and political regime, excellent infrastructure, and strong community support.
However, unlike Montcalm West and Jefferson, McBride is an advanced stage Pr oject with two
existing deposits, the result of more than 100 diamond drill holes by reputable and successful
exploration and mining companies. To reflect Pancon’s focus on battery metals, the McBride
Project acquisition, and the Company’s new growth traje ctory, the Board of Directors intends to
propose a change in the Company’s name to Pancontinental Resources Corporation at the June 21,
2018 Annual General Meeting.
Qualified Person
The technical information in this news release has been prepared in accordance with the Canadian
regulatory requirements set out in NI 43-101 and reviewed and approved by Dr. Derek McBride,
P.Eng., a Qualified Person as defined by NI 43-101 and a technical advisor for Pancontinental.
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About Pancontinental Gold Corporation
Pancontinental is a Canadian-based mining company focused on the exploration and development
of its McBride Nickel -Cobalt-Copper Project in Ontario, Canada; its Montcalm West Nickel -
Cobalt-Copper Project in Ontario, Canada; and its 100% -owned Jefferson Gold Project in South
Carolina, USA. The Company continues to focus on acquiring additional prospective properties in
low-risk areas with existing resources and/or in proximity to producing or former mines. In 2015,
Pancontinental sold its interest in its Australian rare earth element (REE) and uranium properties,
formerly held through a joint venture, and retains a 1% gross overriding royalty on 100% of future
production.
For further information, please contact:
Layton Croft
President and CEO
1-416-293-8437
1-980-309-8419
For additional information please visit our web site: www.pancongold.com, and our Twitter feed:
@PanconGold.
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policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Language and Forward Looking Statements
This news release contains forward -looking information which is not comprised of historical facts. Forward -looking
information is characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”
and other similar w ords, or statements that certain events or conditions “may” or “will” occur. Forward -looking
information involves risks, uncertainties and other factors that could cause actual events, results, and opportunities to
differ materially from those expressed or implied by such forward-looking information. Factors that could cause actual
results to differ materially from such forward-looking information include, but are not limited to, changes in the state
of equity and debt markets, fluctuations in commodity prices, delays in obtaining required regulatory or governmental
approvals, and other risks involved in the mineral exploration and development industry, including those risks set out
in the Company’s management’s discussion and analysis as filed under the Com pany’s profile at www.sedar.com.
Forward-looking information in this news release is based on the opinions and assumptions of management considered
reasonable as of the date hereof, including that all necessary governmental and regulatory approvals will be received
as and when expected. Although the Company believes that the assumptions and factors used in preparing the forward-
looking information in this news release are reasonable, undue reliance should not be placed on such information. The
Company disclaims any intention or obligation to update or revise any forward -looking information, other than as
required by applicable securities laws.