WEST Kirkland Mining Buys 1.1% NSR Royalty at Hasbrouck IN Exchange FOR Tug Project Interests
SUITE 788 – 550 BURRARD STREET, VANCOUVER, B.C. V6C 2B5 CANADA / TEL: 604-685-8311 / FAX: 604-484-4710
News Release No. 94-2017
May 9, 2017
WEST KIRKLAND MINING BUYS 1.1% NSR ROYALTY AT HASBROUCK
IN EXCHANGE FOR TUG PROJECT INTERESTS
VANCOUVER, BRITISH COLUMBIA, May 9, 2017 – West Kirkland Mining Inc. (WKM:TSXV)
(WKLDF:OTCQB) (“West Kirkland” or the “Company”) announces the execution of an exchange
agreement (the “EA”) with Newmont Mining Corporation (“Newmont”) whereby the Company has
exchanged all of its rights, title and interests in, and its obligations associated with the TUG Property,
located within the Long Canyon Trend of northern Nevada/Utah, for an approximate 1.1% net smelter
returns (“NSR”) royalty forming part of Newmont’s 2.4% NSR royalty on the Hasbrouck Gold Project,
located near Tonopah, Nevada, plus the r ight to US$1.194 million in payments due upon commercial
production at Hasbrouck or Three Hills and extinguishment of land fees. The Hasbrouck Gold Project
is held by a dedicated limited liability corporation (“LLC”) of which the Company holds a 75% inter est
and of which Clover Nevada LLC, a Nevada LLC wholly-owned by Waterton Precious Metals Fund II
Cayman, L.P., holds a 25% interest.
The Company now owns for its own account approximately a 1.1% NSR royalty, or 31.4% of the existing
3.5% NSR royalties on the Hasbrouck Gold Project. The existing NSR royalties are over claims hosting
the proven and probable reserves and have not been altered by way of this transaction.
A September 2016 Updated Pre-Feasibility Study (the “PFS Update”) was prepared for the Hasbrouck
Gold Project (see “Technical Report and Updated Preliminary Feasibility Study: Hasbrouck and Three
Hills Gold-Silver Project, Esmeralda County, Nevada,” dated September 14, 2016 and prepared by
Thomas L. Dyer, P.E., Paul Tietz, C.P.G., Ry an T. Baker, Herbert C. Osborne and Carl E. Defilippi).
Using the PFS Update financial model, the attributable Hasbrouck cash flow acquired by the Company
pursuant to the EA is US$9.5 million over the eleven -year project life. A t a 5% discount rate, this
attributable cash flow amounts to approximately US$7.8 million.
At the holding LLC level (75% owned by West Kirkland), the PFS Update estimated a US$120 million
NPV (5%) and a 43% IRR, after-tax, with a 3.1 year pay-back at US$1,275/oz Au and US$18.21/oz Ag
metal price assumptions. The 1.1% NSR royalty acquired by the Company would add to the Company’s
share of this modelled value.
West Kirkland’s CEO, R. Michael Jones, stated “We are very pleased to complete this transaction with
Newmont. Although we believe the TUG Property to be highly prospective, at current gold prices the
known deposit is not economic. By comparison, the acquisition of a 1.1% NSR royalty on the Hasbrouck
Gold Project plus US$1.194 million in payments and eliminated land fees is very accretive to West
Kirkland at today’s gold prices. We also see good exploration potential at Hasbrouck and the transaction
is attractive across all of the large land position where recent drilling has been successful.”
The PFS Update est imated open pit proven and probable reserves for 100% of the Hasbrouck Gold
Project (based on 100% of the project) total ling 45.3 million tons at a grade of 0.017 oz/ton gold and
0.233 oz/ton silver, containing 762,000 oz gold and 10.6 million oz silver. These reserves were used in
the PFS Update and the royalty value model.
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Hasbrouck Gold Project Reserves - June 3, 2015, Mine Development Associates
(“MDA”)
Three Hills K tons Grade
(oz Au/ ton) K oz Au oz Ag/ton K oz Ag
0.005 opt
Au cut-off
Proven - - - - -
Probable 9,653 0.018 175 - -
P&P 9,653 0.018 175 - -
Hasbrouck
Variable
(see note 3 below)
Proven 6,242 0.020 127 0.410 2,562
Probable 29,374 0.016 461 0.273 8,007
P&P 35,617 0.017 588 0.297 10,569
Total Hasbrouck Gold Project
Variable
(see note 3 below)
Proven 6,242 0.020 127 0.410 2,562
Probable 39,028 0.016 635 0.205 8,007
P&P 45,270 0.017 762 0.233 10,569
Notes:
1. The estimation and classification of proven and probable reserves have been prepared by Thomas L. Dyer, P.E., of
MDA following CIM standards.
2. Reserves are estimated based on US$1,225/oz gold and US$17.50/oz silver.
3. Cutoff grades used for reserves are: Three Hills 0.005 oz Au/ton, Hasbrouck Upper Siebert 0.008 oz Au/ton, and
Hasbrouck Lower Siebert 0.007 oz Au/ton.
4. It is MDA’s opinion that the sampling, assaying, and security procedures used at Three Hills and Hasbrouck follow
industry standard procedures, and are adequate for the estimation of the current Mineral Reserves.
5. MDA completed audits of the database, performed a site visit, reviewed QAQC data and confirmed historic assays.
After performing their review, they consider the assay data to be adequate for the estimation of the current Mineral
Reserves.
6. MDA has reviewed and verified the data disclosed in the above table to be in conformity with generally accepted
CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines in accordance with NI 43 -
101.
Details of the transaction include:
• The Company has acquired all NSR royalties in excess of 1.25% held by Newmont over the
Hasbrouck Gold Project, comprising the planned Three Hills and Hasbrouck open pit, heap leach
mines.
• The Company has acquired Newmont’s contractual right to (i) a US$500,000 payment due upon
the commencement of comm ercial production at Hasbrouck; and (ii) a second US$500,000
payment due to Newmont if after commencement of production the price of gold exceeds US$400
for any continuous three-month period. These amounts are in the modelled value to the Company.
• In exchange, the Company has transferred to Newmont all its rights, title and interests to the TUG
Property. The Company earned a 60% project interest in the 50 km2 of mineral rights comprising
the TUG Property by way of a 2010 earn-in agreement with Fronteer Gold Inc. Fronteer was later
acquired by Newmont in 2011.
• Newmont will assume responsibility for US$194,000 in land holding fees currently due in respect
of West Kirkland’s 60% interest in the TUG mineral rights.
West Kirkland completed an initial Resour ce estimate on the TUG deposit in June 2012. The TUG
deposit is located within the Long Canyon Trend, which is part of the old Tecoma Mining District. The
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TUG deposit is a sediment hosted, Carlin style gold deposit that was extensively drilled by the Company
and previous operators. An updated NI 43 -101 Resource Estimate and Preliminary Economic
Assessment (“PEA”) by Roscoe Postle Associates USA Ltd. was announced on August 1, 2013 and
filed on SEDAR September 13, 2013. Based on a 100% project interest for TUG, the PEA predicted a
26% after-tax IRR and US$9 million NPV (8%) at US$1,525 gold/ US$28 silver. Initial capital cost was
projected to be US$24 million.
PIT-CONSTRAINED RESOURCE – APRIL 30, 2013
Category Tonnes Gold Ag AuEq* Gold Ag
t (000) (g/t) (g/t) (g/t) (oz) (oz)
Indicated 3,944 0.90 42.8 1.69 114,000 5,427,000
Inferred 255 0.42 36.32 1.09 3,000 298,000
Notes:
1. CIM definitions are followed for classification of Mineral Resources within the pit used for the economic analysis
2. Mineral Resources are estimated using a gold price of $1,700 per ounce and a silver price of $29 per ounce
3. Heap Leaching gold and silver recovery factors of 58% and 15%, respectively are used
4. Tonnage factor for mineralization was 2.55 t/m³
5. No dilution applied to mineral resources, 97% mining recovery used
6. Resources are constrained by a Whittle shell and reported at a $8.05/t NSR cut-off for heap leaching
7. Totals may not represent the sum of the parts due to rounding
8. The Mineral Resource Estimate used in the economic analysis was prepared by Luke Evans, M.Sc, P.Eng, RPA,
April 30, 2013
9. AuEq was calculated using the following formula: AuEq = Au grade + Ag Grade * 0.0183
To date the Company has spent approximately US$4.85 million on the TUG Property. After an
impairment in a prior period, at year end December 31, 2016 the Company recorded a US$3.37 million
carrying value (CAD$4.53 million) for its rights and interests in the TUG Property.
ABOUT THE HASBROUCK GOLD PROJECT
The Hasbrouck Gold Project consists of two all -oxide gold-silver deposits eight kilometers apart.
Both deposits will be mined in open pits having low stripping ratios and minimal pre-stripping should
the project proceed to production.
West Kirkland’s indepe ndent consultants, MDA, produced an updated Pre -feasibility Study in
September 2016 which is available on SEDAR and at www.wkmining.com. All necessary permits to
construct and operate the Three Hills Mine are in hand, and work to obtain permits for the Hasbrouck
Mine is ongoing, with submission of a Plan of Operation to the Bureau of Land Management (BLM)
targeted for Q4, 2017.
QUALIFIED PERSON
R. Michael Jones P.Eng, CEO for West Kirkland Mining, is a non -independent Qualified Person as
defined by NI 43 -101. He has reviewed the information contained in this news release and has
verified the data by hiring qualified geologists and engineers and has completed a review of the
detailed technical information. Mineral Reserve information in this news release re lating to the
Hasbrouck Gold Project has been developed and approved by Thomas L. Dyer, P.E., of MDA
following CIM standards. Mineral Resource information in this news release relating to the TUG
Property has been developed and approved by Stuart Collins, P.E., and Luke Evans, P.Eng, of
Roscoe Postle Associates USA Ltd (RPA), following CIM standards.
QUALITY ASSURANCE/QUALITY CONTROL
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West Kirkland Mining utilizes a well-documented system of inserting blanks and standards into the
assay stream and has a strict chain of custody. Assays are completed at independent laboratories
which have internal quality assurance and quality control systems and procedures. Assays were
performed by ALS Chemex Labs Ltd., by fire assay and ICP methods.
ABOUT WEST KIRKLAND MINING INC.
West Kirkland owns a 75% interest in the Hasbrouck Gold Project in Tonopah, Nevada. The
remaining 25% is owned by Clover Nevada LLC, a Nevada limited LLC and 100% subsidiary of
Waterton Precious Metals Fund II Cayman, LP. A Pre -feasibility Study with construction -level
drawings and all federal and state permits for the phase -one Three Hills Mine provides a ready -to-
construct project. Exploration for potential expansion is underway.
On behalf of West Kirkland Mining Inc.
“R. Michael Jones”
Chief Executive Officer
For further information, please see the Company’s website at www.wkmining.com or contact us by
email at [email protected].
Investor Relations:
Rob Bruggeman
(416) 884-3556
Disclaimer for Forward-Looking Information
This press release contains forward -looking information or forward -looking statements (collectively "forward -
looking information") within the meaning of applicable securities laws. Forward -looking information is typically
identified by words such as: “bel ieve”, “expect”, “anticipate”, “intend”, “estimate”, “postulate” and similar
expressions, or are those, which, by their nature, refer to future events. Forward -looking information in this
news release includes, without limitation, the completion of the Prefeasibility Study, the project approach of the
Prefeasibility Study and exploration and all information under the heading “Prefeasibility Study Detail”, including
the Prefeasibility Study budget. Although West Kirkland believes that such timing and expen ses as set out in
this press release are reasonable, it can give no assurance that such expectations and estimates will prove to
be correct. The Company cautions investors that any forward -looking information provided by the Company
is not a guarantee of future results or performance, and that actual results may differ materially from those in
forward-looking information as a result of various factors, including, but not limited to, the state of the financial
markets for the Company's equity securities, th e state of the market for gold or other minerals that may be
produced generally, variations in the nature, quality and quantity of any mineral deposits that may be located,
the Company's ability to obtain any necessary permits, consents or authorizations r equired for its activities, to
raise the necessary capital or to be fully able to implement its business strategies and other risks associated
with the exploration and development of mineral properties. The reader is referred to the Company's public
filings for a more complete discussion of such risk factors and their potential effects which may be accessed
through the Company's profile on SEDAR at www.sedar.com.
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.