Silver Spruce Signs Purchase Agreement for 100% interest in Past-Producing Kay Mine in Arizona, USA
Silver Spruce Signs Purchase Agreement for 100% interest in
Past-Producing Kay Mine in Arizona, USA
March 21, 2017 - Bridgewater, NS - (TSXVSE:SSE) – Silver Spruce Resources Inc. ("Silver
Spruce" or the "Company") is pleased to announce it has entered a Purchase Agreement with Cedar
Forrest, LLC (the “Vendor”) to acquire 100% ownership of 70.84 acres of patented claims covering the
past-producing Kay Mine, located in Yavapai county, Arizona, roughly 50 miles north of Phoenix. The
Kay Copper Company and others produced Au- Ag-Cu-Pb-Zn ore on the property intermittently from
1916 until 1956. Exploration conducted from 1972 to 1982 by Exxon Minerals Company, a subsidiary of
Exxon Petroleum, indicates that substantial additional mineralization exists down dip and potentially
along strike from the previously producing mineral deposits.
Known mineralization occurs in two zones of massive sulfide, the N orth and South Zones, extending
from the surface to at least 2100 feet in depth. Mineralization is open at depth. A November 1982 internal
Exxon Minerals Company report by M. L. Fellows stated that the deposit contains a resource of “Proven
and Probable ore” with a tonnage of 6.4 million short tons grading an estimated 2.2% copper, 3.03% zinc,
1.6 ounces per ton silver and 0.082 ounces per ton gold. The estimate was made using assay data from
historic mine level plans and Exxon drill hole inter cepts. Exxon’s use of the word “ore” is not to be
construed in the strict sense .. After examining mine assay level plans and Exxon drill hold data, Silver
Spruce has concluded that “Indicated Mineral Resource” is the appropriate term for Exxon’s historical
estimate. Additional drilling is needed to verify this estimate. The Qualified Pe rson for Silver Spruce has
not conducted sufficient work to definitively classify Exxon’s resource estimate to be compliant with NI-
43-101 resource definitions. The issuer is not treating the historical estimate as current mineral resources
or mineral res erves. Exxon also reported t he deposits to be open down dip, with significant additional
potential for the discovery of new deposits.
“We are excited to have this opportunity to purchase, explore and develop resources at the Kay
Mine property, located near Black Canyon City, Arizona, a very mining supportive community. We
intend to apply geophysical methods that did not yet exist in the early 1980’s and to drill the
Historic Estimate outlined by Exxon,” stated Karl J. Boltz, President and CEO.
Kay Mine History
The Kay Mine was discovered prior to 1900 and was mined on a small scale up to 1916, producing some
700 tons of ore, 470 tons of which ran 9.1% copper, 1.06 ounces per ton silver and 0.072 ounces per ton
gold. It was during this period that the No. 1 shaft was sunk. The major underground development of the
mine took place between 1918 and 1923 when the No.1 shaft was deepened and the 1200 foot vertical No.
4 shaft (with an internal winze to 1500 feet) was sunk and several thousand feet of development drifts
were driven, but no ore was shipped. The property was acquired for back taxes in the late 1940’s. It was
leased in 1949 by the Black Canyon Copper Corporation which shipped 1,000 tons of high grade ore that
year.
In 1950, Shattuck-Denn Mining Company and New Jersey Zinc dewatered and rehabilitated the number 4
shaft and conducted surface and underground exploration until 1952. This was the first time since 1929
that the mine was dewatered and made accessible. During this time, 1,571 tons of ore were shipped from
underground workings and from dump material, the total averaging 5.67% Cu, 0.98 ounces per ton Ag
and 0.059 ounces per ton Au.
In 1955, Republic Metals Company shipped a few hundred tons from above the 350’ level in the number
4 shaft. About this time a cave -in destroyed the pump station and the mine was allowed to flood. The
underground workings have been inaccessible ever since and no underground production or development
has been done since then. Only about 4,000 tons of ore was documented to have been produced at the Kay
Mine property, largely due to the intermittent production in between periods of litigation.
The proper ty was acquired in 1972 by Exxon Minerals Company. Between 1972 and 1982 Exxon
conducted an extensive exploration program consisting of geologic mapping, sampling, ground and
airborne geophysics and drilling. Exxon drilled 23 core and rotary holes totaling 26,554 feet. Exxon
expended roughly $1,500,000 during this time.
Terms of Purchase
Upon execution of the Purchase Agreement to acquire 100% interest in the patented claims, free of any
royalties, Silver Spruce has paid a non-refundable deposit of US $50,000 to the Vendor.
The Company will pay US $450,000 cash to the Vendor within 75 days.
The Vendor will carry a two -year, 6%, convertible debenture for the principle amount of US $477,000
which is the balance of the total purchase price.
The interest on the debenture will be paid monthly, and the principle may be converted into common
shares of the Company at an exercise price of CAD $0.225 per common share, at any time during the
term of the debenture.
This acquisition is subject to Exchange acceptance.
A finder’s fee will be paid to a party that is Arm’s Length to Silver Spruce and to the Vendor , subject to
TSXVSE approval.
The Finder is Rift Exploration LLC, and will be paid 7.5% of the purchase price, paid in common shares
of the Company.
Due Diligence
The Company has rapidly and efficiently conducted due diligence acti vities on the project, since January
30, 2017. These activities included a site visit, an appraisal of the fee simple surface land value, a fee
simple surface title opinion, an extensive mining ti tle search and analysis of the mining rights held with
the patented claims titles and a legal opinion of the mineral title rights by a prominent mining attorney in
Arizona.
Qualified Person
Mr. Leonard J. Karr, professional geologist and a Qualified Person, under TSX guidelines, is the author of
the Company's NI 43-101 report on the Pino de Plata project, dated 7 July 2015, and is responsible for the
technical content of this press release.
About Silver Spruce Resources Inc.
Silver Spruce Resources Inc. is a well-positioned Canadian junior exploration company pursuing
development of the Pino De Plata and the Encino De Oro epithermal silver/ base metal/ gold projects
located in the prolific Sierra Madre Occidental region of western Chihuahua State in Mexico. Silver
Spruce also retains a portfolio of uranium and rare earth element properties in Labrador.
Neither 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.
The company seeks Safe Harbour.
Contact:
Silver Spruce Resources Inc.
Karl Boltz, President & CEO, Director
Toll Free: (866) 641-3397
www.silverspruceresources.com