Thunder Mountain GOLD Inc. Signs Agreement with Bemetals ON the South Mountain Project
February 28, 2019 OTCQB: THMG & TSXV: THM
THUNDER MOUNTAIN GOLD INC. SIGNS AGREEMENT WITH BEMETALS
ON THE SOUTH MOUNTAIN PROJECT
BOISE, IDAHO - Thunder Mountain Gold, Inc. (OTC QB: THMG; TSX -V: THM), (Company or THMG) is
pleased to announce that It has entered into an option agreement (the “ Option Agreement”) with
BeMetals Corp. (TSXV: BMET) (“BeMetals” or the “ Company”) and its wholly-owned subsidiaries, to
acquire up to a 100% interest in the South Mountain Project (“South Mountain” or the “Project” or the
“Property”) in southwest Idaho, U.S.A . (see Principal Terms of the Option Agreement below) . South
Mountain is a high-grade zinc-silver-gold focused polymetallic development project largely located on
private property. The mine operated from the mid-1800s until the 1960s with most of production during
World War II for strategic minerals for the war effort.
Option Agreement Benefits to Thunder Mountain Shareholders:
• Unlocks immediate value while retaining exposure to the upside of South Mountain’s
advancement towards production
• Reduces shareholder risk and dilution
• Creates upside for THMG with exposure to work with a world-class development and operations
team that has proven ability to raise capital and expedite the advancement of South Mountain
• Leverage to results driven news flow for South Mountain, BeMetals’ Zambian exploration project,
as well as potential future acquisitions through the BeMetals consideration shares
• Access to higher trading liquidity and improved capital markets exposure
Eric T. Jones, President and CEO of Thunder Mountain, stated, “Given the current market interest in high
grade zinc, and base metal deposits, we are very pleased to be partnering with a strong group of mining
professionals that have the technical and financial capabilities to immediately begin advancing the South
Mountain Project. We look forward to working with the BeMetals tea m to unlock the true value of this
high-grade asset.”
The South Mountain Project
South Mountain is a polymetallic zinc-silver-gold development project, located approximately 70 miles
southwest of Boise, Idaho (see Figure 1). The Project was intermittently mined from the late 1800s to the
late 1960’s and its existing underground workings remain intact and well maintained. Historic production
at the Project has largely come from skarn -hosted, high-grade massive sulfide ore bodies that remain
open at depth and along strike (see Figure 2) . These high -grade massive sulfide zones comprise South
Mountain’s current mineral resource (see Table 1 below) . According to historical smelter records
approximately 53,642 tons of ore have been mined to date. These records also indicate average grades;
14.5% Zn, 10.6 o.p.t Ag, 0.058 o.p.t Au, 2.4% Pb, and 1.4% Cu were realised.
Since 2008, Thunder Mountain has completed 27 drill holes for a total of 5,500 metres on the Property.
Thus far, drill results have been encouraging and significant potential exists to increase the known mineral
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resource with additional drilling, as well as to expand the existing measured and indicated mineral
resource classifications with in -fill drilling. L ast year a technical report for the South Mountain Project
was completed by Hard Rock Consulting, LLC , entitled, “National Instrument 43 -101 Technical Report:
Updated Mineral Resource Estimate for the South Mountain Project Owyhee County, Idaho USA”.
Since the Project is largely on and surrounded by private surface land , the permitting and environmental
aspects of the Project are expected to be straightforward. Based on the existing Project permits, coupled
with the associated work completed to date, including a long and successful history of mineral exploration
in the re gion, BeMetals does not anticipate barriers to proposed exploration or development at the
Project.
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Figure 1. South Mountain Project Location Map
South Mountain
Project
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Figure 2. South Mountain Project Long Section (Showing mine levels and high-grade massive sulfide
zones)
Table 1: South Mountain Mineral Resource Estimate
Notes:
1. The effective date of the mineral resource estimate is April 7, 2018. The QP for the estimate is Mr. Randall
K. Martin, SME-RM, of Hard Rock Consulting, LLC, who is independent of Thunder Mountain.
2. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred
mineral resources are that part of the mineral resource for which quantity and grade or quality are
estimated on the basis of limited geologic evidence and sampling, which is sufficient to imply but not
verify grade or quality continuity. Inferred mineral resources may not be converted to mineral reserves. It
is reasonably expected, though not guaranteed, that the majority of Inferred mineral resources could be
upgraded to Indicated mineral resources with continued exploration.
3. The mineral resource is reported at an underground mining cutoff of 6.04% ZnEq within coherent
wireframe models. The ZnEq calculation and cutoff is based on the following assumptions: an Au price of
$1,231/oz, Ag price of $16.62/oz, Pb price of $0.93/lb., Zn price of $1.10/lb. and Cu price of $2.54/lb.;
metallurgical recoveries of 75% for Au, 70% for Ag, 87% for Pb, 96% for Zn and 56% for Cu, assumed
mining cost of $70/ton, process costs of $25/ton, general and administrative costs of $7.5/ton, smelting
and refining costs of $25/ton. Based on the stated prices and recoveries the ZnEq
formula is calculated as follows; ZnEq = (Au grade * 43.71) + (Ag grade * 0.55) + (Pb grade * 0.77) + (Cu
grade * 1.35) + (Zn grade).
4. Rounding may result in apparent differences when summing tons, grade and contained metal content.
Tonnage and grade measurements are in imperial units.
Classification
Short tons ZnEq lbs ZnEq% Zn lbs Zn% Ag oz Ag Au oz Au opt Pb lbs Pb% Cu lbs Cu%
x1000 x1000 x1000 x1000 opt x1000 x1000 x1000 x1000
Measured 63.20 22,200 17.57 14,700 11.64 237 3.75 4.0 0.06 600 0.483 700 0.566
Indicated 106.70 37,800 17.72 21,500 10.08 576 5.40 7.0 0.07 2,100 0.983 1,600 0.766
Measured +
Indicated 169.90 60,000 17.66 36,200 10.66 813 4.78 11.0 0.07 2,700 0.797 2,300 0.692
Inferred 363.20 120,800 16.63 70,500 9.70 2,029 5.59 16.3 0.05 8,700 1,202.000 5,200 0.696
Zinc Equivalent Resource Contained Metal
Mineral Resources at 6.04% ZnEq Cut-off
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Principal Terms of the Option Agreement
The transaction structure was designed to mi nimize near-term share dilution for THMG shareholder s,
while allowing sufficient time for additional exploration and reserve definition to maximize the value of
the Project prior to its acquisition by BeMetals. Under the terms of the Option Agreement, a subsidiary of
BeMetals has the right to acquire all of Thunder Mountain’s interest in the South Mountain Project by
way of acquiring 100% of the outstanding shares of South Mountain Mines Inc. (“SMMI”), a wholly owned
subsidiary of Thunder Mountain (the “Acquisition”). SMMI currently holds a 75% interest in the Project
and has the right to acquire the remaining 25% subject to a 5% Net Returns Royalty capped at US$5 million
on or before November 3, 2026.
In order to complete the Acquisition, BeMetals must:
1. Make an initial cash payment of US$100,000 upon Thunder Mountain delivering voting support
agreements from shareholders controlling over 50% of outstanding Thunder Mountain shares;
2. Upon satisfaction of certain conditions precedent, including receipt of TSX Venture Exchange
acceptance and all requisite THMG shareholder approvals:
a. purchase 2.5 million shares of common stock of Thunder Mountain at US$0.10 per share, for
gross proceeds of US$250,000, by way of private placement; and
b. issue 10 million common shares of BeMetals to Thunder Mountain Gold Inc.
3. Make four cash payments of US$250,000 each on or before the 6, 12, 18 and 24 -month
anniversary dates, respectively, from when Thunder Mountain has satisfied certain conditions
precedent and items 1 and 2 above have been completed;
4. Complete a Preliminary Economic Assessment (“PEA”) for the Project; and
5. Make a final value payment to Thunder Mountain consisting of cash, common shares of BeMetals,
or a combination of both at the discretion of BeM etals. The final payment will be the greater of
either US$10 million or 20% of the after -tax net present value of the Property as calculated in a
PEA study completed by an independent engineer that is agreed to by both parties . The final
payment will be decreased by US$850,000 to account for certain cash payments previously made
under items 1 and 2 above, the value of the 10 million BeMetals shares issued under item 2 above,
as well as certain liabilities of SMMI to be assumed on Acquisition. The final value payment shall
be capped at a maximum of 50% of the market capitalization of BeMetals as of the completion
date of the Acquisition.
Pursuant to the Option Agreement, BeMetals will have two years to complete the Acquisition (subject to
a potential 12-month extension under certain limited circumstances). BeMetals' wholly owned subsidiary
will become the operator of the Project upon the completion of certain conditions precedent and will
solely fund the exploration programs and completion of the PEA at South Mountain.
A technical management committee will be formed that will be comprised of two representatives from
THMG, and two representatives from BMET USA effective as of the Tranche 2 completion date. The role
of the committee is to oversee the work program and budg et prepared and proposed by the Operator ,
review all exploration data obtained as a result of the work program, and direct the PEA author.
Advisors and Counsel
McMillan LLP and Hawley Troxell acted as legal counsel for Thunder Mountain , Evans and Evans Inc. of
Vancouver, B.C. provided the independent fairness evaluation.
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Qualified/Competent Persons
The Technical information in this news release has been reviewed and approved by Larry D. Kornz e, P.
Eng., Qualified Person, and Director of Thunder Mountain Gold Inc., and Edward D. Fields, P.G., technical
advisor to the board of Thunder Mountain, and a “Qualified Person” as defined by National Instrument
43-101 standards.
ABOUT THUNDER MOUNTAIN GOLD INC.
Thunder Mountain Gold Inc. is a junior exploration company founded in 1935 and owns interests in base
and precious metals projects in the wester n U.S. Thunder Mountain’s principal asset is The South
Mountain Mine, an historic former producer of zinc, silver, gold, lead, and copper, located on private land
in southern Idaho, just north of the Nevada border. The Company also owns 100% of the Trout Creek
Project – a grass roots gold target in the Eureka -Battle Mountain trend of central Nevada. For more
information on Thunder Mountain, visit www.thundermountaingold.com.
ABOUT BEMETALS CORP.
BeMetals' f ounding Directors include Clive Johnson, Roger Richer, Tom Garagan and John Wilton.
BeMetals is a new base metal mining company focused on becoming a significant base metal producer
through the acquisition of quality exploration, development and production stage base metals projects.
The Company’s growth strategy is led by a strong Board, key members of which have an extensive proven
record of accomplishment in delivering considerable value in the mining sector through the discovery,
construction and operation of mines around the world. The Board, its Advisors, and senior management
also provide outstanding deal flow of projects to BeMetals based upon their extensive network of contacts
in the international minerals business. You can find more on BeMetals at www.Bemetalscorp.com
ON BEHALF OF THUNDER MOUNTAIN GOLD INC.
“Eric T. Jones”
Eric T. Jones
President & CEO
For further information please contact:
Eric T. Jones Jim Collord
President and Chief Executive Officer Vice President and Chief Operating Officer
[email protected] [email protected]
Tel: (208) 658-1037 Tel: (208) 658-1037
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.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on the beliefs of management and reflect the
Company’s current expectations. The forward -looking statements in this press release include statements with
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respect to the terms and use of proceeds of the Private Placement, the ability of the Company to complete the Private
Placement and the impact of the Private Placement on the Company. Generally, forward-looking statements can be
identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates”, “believes” or variations of such words and phrases or statements
that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”
or the negative connotation thereof. The forward-looking statements are based on certain assumptions, which could
change materially in the future, including the assumption that the Private Placement will be complete d. By their
nature, forward-looking information involves known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by the forward -looking information. Such factors include the risk of completion
of the Private Placement and uncertainties affecting the expected use of proceeds. There can be no assurance that
forward-looking information will prove to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, investors should not place undue reliance on forward -looking
information. Forward-looking information is provided as of the date of this press release, and the Company assumes
no obligation to update or revise them to reflect new events or circumstances, except as required in accordance with
applicable laws.
Cautionary note to United States investors concerning estimates of measured, indicated and inferred resources.
This news release contains certain disclosure that has been prepared in accordance with the requirements of
Canadian securities laws, including Canadian National Instrument 43-101 (“NI 43-101”), which differ from the current
requirements of the U.S. Securities and Exchange Commission (“SEC”) set out in Industry Guide 7. In particular, this
news release refers to “mineral resources,” “measured mineral resources,” “indicated mineral resources,” a nd
“inferred mineral resources.” While these categories of mineralization are recognized and required by Canadian
securities laws, they are not recognized by Industry Guide 7 and are not normally permitted to be disclosed in SEC
filings. United States investors are cautioned not to assume that all or any of measured, indicated or inferred mineral
resources will ever be converted into mineral reserves. Under Industry Guide 7, mineralization may not be classified
as a “reserve” unless the m ineralization can be economically or legally extracted at the time the “reserve”
determination is made. "Inferred mineral resources" have a great amount of uncertainty as to their existence and
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. Disclosure of "contained ounces" in a resource is permitted disclosure under Canadian
reporting standards; however, Industry Guide 7 normally only permits issuers to report mineralization that does not
constitute "reserves" by Industry Guide 7 standards as in -place tonnage and grade without reference to unit
measures. Accordingly, information contained in this news release containing descriptions of South Mountain’s
mineral deposits may not be comparable to similar information made public by U.S. companies subject to the
reporting and disclosure requirements of Industry Guide 7.