Volcanic enters into option agreement to acquire second gold property in Guinea
200 Burrard Street, Suite 650 Tel: 604.801.5432
Vancouver, BC V6C 3L6 Fax: 604.662.8829
TSX-V: VG
NEWS RELEASE
Volcanic enters into option agreement to acquire second gold property in Guinea
April 18, 2017 – Vancouver, British Columbia – Volcanic Gold Mines Inc. (“Volcanic”) (TSXV: VG) is
pleased to report that it has entered into a binding letter agreement (the “Agreement”) to acquire 80% of
West African Mining Associates SARL (“WAMA”) , a private Guinean company . The assets of WAMA
comprise two exploration permits and three mining permits (the “WAMA Project”), which together adjoin
the entire length of the southern boundary of , and lie within the same m ineralized trends as Volcanic’s
existing Mandiana Project (“Mandiana”). This acquisition will expand Volcanic’s holding in the Mandiana
district to almost 500 square kilometers.
The WAMA Project
One of the most notable mineralized occurr ences within the WAMA Project is the Farabakoura Prospect.
During 2014 and 2015 WAMA drilled 89 inclined RC holes beneath lateritic artisanal workings at
Farabakoura, results of which include:
Hole From
(meters)
To
(meters)
Interval
(meters)
Gold
Grade
(g/t)
Comments
FKRC003 64 71 7 29.0 Visible gold observed in RC chips
incl. 64 65 1 171.0
FKRC005 68 80 (end of hole) 12 40.1 Visible gold observed in RC chips
incl. 69 71 2 220.3
FKRC006 74 80 6 14.8
incl. 75 76 1 38.6
FKRC035 52 56 4 6.2
and 68 74 6 14.9
FKRC037 77 80 3 9.1
FKRC048 27 39 12 4.0
FKRC051 103 120 (end of hole) 17 2.0
FKRC071 62 69 7 103.5 Visible gold observed in RC chips
incl. 63 66 3 236.4
FKRC074 71 77 6 17.0
incl. 73 75 2 39.8
FKRC075 69 75 6 6.7
FKRC076 81 87 6 18.2
incl. 81 83 2 52.2
FKRC077 78 79 1 148.0
FKRC087 43 49 6 65.8
incl. 45 47 2 192.5
The reader is advised that the above results are historic in nature and are yet to be verified by Volcanic.
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As seen at Mandiana, art isanal working s at Farabakour a follow a semi -continuous north-south trend for
approximately two kilometers, only a minor portion of which has been drill -tested. This trend is consistent
with the orientation of dominant north-south mineralized structures seen elsewhere in the Siguiri Basin; east-
west displacements to this structure appear to give rise to higher grade zones of auriferous quartz-vein
stockworks.
QA/QC
Drilling was performed using a track -mounted UDR650 RC rig. Samples were then sent to ALS Minerals
laboratory in Bamako, Mali where they were analyzed by 50 gram fire assay with an AAS finish. RC drill
chips are preserved in chip trays, which have been inspected; quartz vein material similar to that observed in
the overlying artisanal workings coincides with elevated gold values . Coarse, visible gold was observed in
quartz veins from several holes. PVC drill collars are cemented and clearly labelled by WAMA, and are still
in good condition. Based on verification of selected collars and their orientations against WAMA’s drilling
database, no discrepancies were observed.
The Agreement
Volcanic has the right to acquire 100% of the issued shares of a British Virgin Island s corporation (“BVI”),
which will hold 80% of the issued shares of WAMA, on the following terms:
(a) over a period of 34 months, Volcanic must issue in stages a total of 12 million shares pro -rata to the
shareholders of BVI, and incur exploration expenditures on the WAMA Projec t in stages totalling at
least CDN$11.5 million. Of these expenditures, Volcanic must spend during an initial 120 day
period (“Initial Phase”) a minimum of CDN$500,000 on evaluation exploration work, including
drill-testing, after which Volcanic will decide if it wishes to continue making the prescribed share
issuances and exploration expenditures to complete the acquisition of BVI and the WAMA Project.
(b) Volcanic will assume, subject to certain conditions, US$9.1 million of debt (the “Debt”) currently
owing by WAMA to its principal shareholder (the “Debt Holder”). The Debt will become payable by
Volcanic only upon the definition by Volcanic of a minimum Mineral R esource prepared in a
manner consistent with current definitions and requirements as set out by CIM and Canadian
National Instrument 43- 101 (“Minimum Resource”) of 1.5 million ounces of gold at a minimum
grade of 2.0 g/t gold on the WAMA Project . The Debt would be repaid partly in cash and partly in
Volcanic shares. Volcanic will initially make a secured cash loan of US$500,000 to the Debt
Holder, toward payment of the Debt, but this loan will be reimbursed should Volcanic not opt to
proceed beyond the Initial Phase.
(c) Volcanic will issue warrants (the “Warrants”) entitling the Debt Holder to purchase up to 6.0 million
shares of Volcanic exercisable for a period of five years at a price of CDN$1.00 per share, to be
exercisable (i) as to 50% at such time as Volcanic has completed its acquisition of 100% of BVI and
has established the Minimum Resource, and (ii) as to 100% at such time as Volcanic has completed
its acquisition of BVI and has established a Mineral R esource prepared in a manner consi stent with
current definitions and requirements as set out by CIM and Canadian National Instrument 43- 101of
at least 2.0 million ounces of gold at a minimum grade of 2.0 g/t gold.
The Agreement is subject to approval by the TSX Venture Exchange.
About Volcanic
Volcanic brings together a deeply experienced and successful mining, exploration and capital markets team
focused on building a multi -million ounce gold resource in the underexplored West African country of
Guinea and its neighbouring countries. Through the strategic acquisition of mineral properties with
demonstrated potential for hosting gold resources, and by undertaking effective exploration and drill
programs, Volcanic looks to become a leading junior gold resource company.
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Qualified Person
Mr. Simon Meadows-Smith is a Qualified Person as defined by “National Instrument 43- 101 - Standards of
Disclosure for Mineral Projects” and has approved the disclosure of the scientific and technical information
contained in this news release. Mr. Meadows -Smith holds a BSc degree in geology from Nottingham
University, England, and has been involved in mineral exploration since 1988, including 20 years of
experience working in West Africa. He is a Fellow in good standing of the Institute of Materials, Minerals &
Mining in London.
For further information, contact Alex Langer, the Company’s VP Capital Markets, at 604-765-1604, or visit
our website at www.volgold.com.
Volcanic Gold Mines Inc.
Jeremy Crozier, President
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts
responsibility for the adequacy or accuracy of this release.
Forward-looking statements
Certain statements contained in this news release constitute forward- looking statements within the meaning of
Canadian securities legislation. All statements included herein, other than statements of historical fact, are forward -
looking statements and include, without li mitation, statements about the Company’s proposed acquisition of the WAMA
Project. Often, but not always, these forward looking statements can be identified by the use of words such as
“estimate”, “estimates”, “estimated”, “potential”, “open”, “future”, “assumed”, “projected”, “used”, “detailed”,
“has been”, “gain”, “upgra ded”, “offset”, “limited”, “contained”, “reflecting”, “containing”, “remaining”, “to be”,
“periodically”, or statements that events, “could” or “should” occur or be achieved and similar expressions, including
negative variations.
Forward-looking stateme nts involve known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially different from any results, performance or
achievements expressed or implied by forward -looking statements. Such uncertainties and factors include, among
others, whether the Company will complete the acquisition of the WAMA Project as planned; changes in general
economic conditions and financial markets; the Company or any joint venture partner not having the financial ability to
meet its exploration and development goals; risks associated with the results of exploration and development activities,
estimation of mineral resources and the geology, grade and continuity of mineral deposits; unantic ipated costs and
expenses; and such other risks detailed from time to time in the Company’s quarterly and annual filings with securities
regulators and available under the Company’s profile on SEDAR at www.sedar.com . Although the Company has
attempted to identify important factors that could cause actual actions, events or results to differ materially from those
described in forward- looking statements, there may be other factors that cause actions, events or results to differ from
those anticipated, estimated or intended.
Forward-looking statements contained herein are based on the assumptions, beliefs, expectations and opinions of
management, including but not limited to: that the Company will complete its acquisition of the WAMA Project as
planned; that the Company’s stated goals and planned exploration and development activities will be achieved; that
there will be no material adverse change affecting the Company or its properties; and such other assumptions as set out
herein. Forward -looking statements are made as of the date hereof and the Company disclaims any obligation to
update any forward- looking statements, whether as a result of new information, future events or results or otherwise,
except as required by law. There can be no assurance that for ward-looking statements 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 statements.