WEST Kirkland Mining Enters Agreement FOR Lease of Water Rights Hasbrouck Open Pit Heap Leach GOLD Project, Nevada
SUITE 788 – 550 BURRARD STREET, VANCOUVER, B.C. V6C 2B5 CANADA / TEL: 604-685-8311 / FAX: 604-484-4710
News Release No. 90-2017
February 21, 2017
Not for distribution to U.S. newswire services or for dissemination in the United States
WEST KIRKLAND MINING ENTERS AGREEMENT FOR LEASE OF WATER RIGHTS
HASBROUCK OPEN PIT HEAP LEACH GOLD PROJECT, NEVADA
VANCOUVER, BRITISH COLUMBIA, February 21 , 2017 – West Kirkland Mining Inc.
(WKM:TSXV) (“West Kirkland”, “WKM” or the “Company”) announces that it has entered into an
agreement to lease water rights (the “Lease”) in Nevada from Liberty Moly LLC (“Liberty Moly”).
Liberty Moly holds certain water rights which allow it to appropriate ground water within Basin
137a for use at their Liberty Moly p roject, located 30 km from WKM’s Hasbrouck Gold Project.
The lease allows WKM to appropriate ground water in the amount of 1.522 cubic feet per second
with an annual duty of 800 acre feet. The quantity of water leased by WKM is a portion of Liberty
Moly’s right to 6,200 acre feet annually and is sufficient for all of WKM `s water needs for
production at the Hasbrouck Project.
The Three Hills Mine is the first phase of the Hasbrouck Gold Project and is also located within
Basin 137a. Obtaining approval from Nevada’s state engineer to change the point of diversion of
the leased water to the Hasbrouck Project is expected to be in the normal course of affairs. The
Hasbrouck Mine is the second phase of the project and is located in the adjacent Basin 142; an
inter-basin approval is required for the leased water to be diverted to the Hasbrouck Mine. The
company plans to make this application and work on it during Three Hills Mine construction and
gold production phases. The Three Hills Mine involves an open pit, heap leach and gold plant,
and is fully permitted for construction and operation. Purchase of private lands for the Three Hills
heap leach facility was concluded in January 2017. Work on permitting the Hasbrouck Mine is
ongoing and is expected to be completed under an Environmental Assessment. Assay results
from recent exploration drilling at Three Hills are pending.
The Hasbrouck Project consists of the Hasbrouck Mine, Three Hills Mine, and surrounding land
package, all located near Tonopah, Nevada. All dollar values presented in this news release are
U.S. dollars and are presented on a 100% project basis. Highlights include:
Low initial capital cost of $47 million with a 12-month construction period
Open pit mining with minimal pre-stripping and an overall stripping ratio of 1.1:1
594,000 recoverable gold equivalent ounces*
74,000 gold equivalent ounces* produced annually for eight years
$717 All-in Sustaining Cost per Au ounce
Robust 2016 pre-feasibility study indicating after-tax NPV (5%) of $120 million and
a 43% IRR
$1,275/oz Au and $18.21/oz Ag metal price assumptions
Good exploration potential proximal to the Three Hills permitted pit
*Gold equivalent ounces are calculated by multiplying the silver ounces by 18.21 over 1,275 and
then adding to the gold ounces
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Proven and Probable Reserves total 45.3 million tons containing 762,000 ounces gold and 10.6
million ounces silver as detailed below:
Hasbrouck Project Reserves, June 3, 2015, Mine Development Associates (1, 2)
Three Hills Mine Reserves K tons
Ore
Grade
(oz Au/ton)
K oz
Au
Grade
(oz Ag/ton)
K oz Ag
0.005 opt
Au cutoff
Proven - - - - -
Probable 9,653 0.018 175 - -
P&P 9,653 0.018 175 - -
Hasbrouck Mine Reserves
Variable
cutoff grade(3)
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 Project
Reserves
Variable
cutoff grade(3)
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 Mineral Reserves have been prepared by Thomas
L. Dyer, P.E., of Mine Development Associates following CIM standards
2) Mineral Reserves are estimated based on $1,225/oz gold and $17.50/oz silver
3) Cutoff grades used for Mineral 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
WKM Chief Operating Officer Sandy McVey commented that “Securing this water supply is a
major milestone for the Company and significantly advan ces the project, as well as improving
project economics. We understand from discussions with Nevada Division of Water Resources
that State approval for this water transfer should be granted on application. We look forward to
further progressing the Hasbrouck Gold Project by permitting the Hasbrouck Mine under an
Environmental Assessment as we did in seven months at the Three Hills Mine”.
The initial term of the Lease is for six (6) years commencing on February 10, 2017. WKM may
extend the Lease for one additional four (4) year term. WKM’s diversion and use of ground water
pursuant to the Lease is subject to the approval of the Nevada State Engineer. In the event that
Liberty Moly requires the leased water rights for the construction and operation of its own mine
project during the term or extension of the Lease, Liberty Moly may terminate th e Lease by
providing twenty-four (24) months’ notice to WKM.
As initial compensation for the leased water r ights, WKM will issue to Liberty Moly US$100,000
worth of WKM common shares calculated on the last closing price of one WKM common share
on the TSX Venture Exchange (the “TSXV”) on February 13, 2017, converted into U.S. d ollars
based on the noon buying rate reported by the Bank of Canada on February 14, 2017 (being
1,454,778 WKM common shares).
On each anniversary date during the term of the Lease, WKM is to pay Liberty Moly either
US$10,000 in cash or the equivalent value in common shares calculated by dividing US$10,000
by the last closing price of one WKM common s hare on the TSXV imme diately preceding the
anniversary date, converted into U.S. dollars based on the foreign exchange rate reported by the
Bank of Canada on the applicable payment anniversary.
All WKM common shares issued pursuant to the Lease will be subject to TSXV approval and will
bear a resale restriction under Canadian securities laws for a period of four months and one day
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from the date of issue and will also bear a legend and be subject to resale restrictions under
applicable U.S. securities laws. WKM may terminate the Lease by written notice if at any time
WKM is prevented from using the leased water rights because of judicial orders, court decrees or
local, state or federal laws, rules or regulations now or later in effect.
Authors and Qualified Persons Statement
The referenced Mineral Reserve Estimate was prepared in conformance with NI 43 -101 by
Thomas L. Dyer, P.E. of MDA and was filed on SEDAR on September 2016. Mr. Dyer is a
"Qualified Person" under NI 43-101 and has reviewed and approved the information in this news
release. MDA has reviewed and verified that the data disclosed in this news release conforms to
CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines and to NI
43-101.
Sandy McVey, P.Eng., Chief Operating Officer of West Kirkland, and a non-independent Qualified
Person as defined by NI 43-101, has reviewed the information contained in this news release and
has verified the data.
Sample Preparation, Analyses, and Security
It is MDA’s opinion that the sampling, assaying, and security procedures used at Three Hills and
Hasbrouck deposits follow industry standard procedures, and are adequate for the estimation of
the current Mineral Resources and Mineral Reserves.
Data Verification
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 Resources and Mineral Reserves.
About West Kirkland Mining Inc.
West Kirkland owns a 75% interest in the Hasbrouck Gold Project in Tonopah, Nevada. A Pre -
Feasibility Study and Environmental Assessment with construction-level drawings and all federal
and state permits for the phase-one Three Hills Mine provides an advanced project for potential
expansion with drilling underway. West Kirkland also holds a 60% interest in the open pit heap -
leach TUG Gold Project in Utah in Joint Venture with Newmont.
On behalf of West Kirkland Mining Inc.
“R. Michael Jones”
Chief Executive Officer
For more information, contact:
For further information, please see the Company’s website at www.wkmining.com or contact us
by email at [email protected].
Investor Relations Contact:
Rob Bruggeman
(416) 884-3556
The securities described in this press release have not been and will not be registered under the
United States Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent such registration or an exemption therefrom.
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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: “believe”, “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 statements regarding the approval of the TSXV for the issuance of the WKM
common shares, any use of the water supply and the future issuance of WKM common shares
under the Lease and other statements that are not historical facts. Information concerning mineral
resource/reserve estimates and the economic analysis thereof contained in the prefeasibility
study are also forward -looking statements in that they reflect a prediction of the mineralization
that would be encountered, and the results of mining it, if a mineral deposit were developed and
mined. Although West Kirkland believes that such timing and expenses 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, the state
of the market for gold or other minerals that may be produced generally, significant increas es in
any of the machinery, equipment or supplies required to develop and operate a mine, a significant
change in the availability or cost of the labor force required to operate a mine, a significant
increases in the cost of transportation for the Company’s products, 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 required 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.