TORONTO, Oct. 11, 2017 /CNW/ - Kerr Mines Inc. ("Kerr"
or the "Company") (TSX: KER, OTC: KERMF, FRA: 7AZ1) is pleased
to announce its financial results for the year ended June 30, 2017. The June
30, 2016 Audited Financial Statements, Management's
Discussion and Analysis and the Company's Annual Information Form
are available at www.sedar.com. The overall financial
position of Kerr Mines has improved
substantially since last year as a result of a successful equity
financing and significant debt restructuring during the
year.
"The past 12 months have been an incredible journey"
said Claudio Ciavarella, CEO Kerr
Mines. "The Company has completely transformed itself
and has made tremendous strides forward. On behalf of your
Board and the Management team, we believe the coming year will be
another positive step forward in the execution of our
strategy".
Highlights for the Year ended June 30,
2017 and Significant Subsequent Events
Operational
- On October 19, 2016 The Company
announced that dewatering and rehabilitation work had begun at the
Copperstone mine.
- On March 2, 2017, the Company
announced it completed its de-watering and underground
rehabilitation program at its flagship Copperstone mine in
Arizona
- In June 2017 the Company then
underwent a tender process for the three key contracts to support
the execution of the 2017 Copperstone Mine exploration program and
pre-feasibility study.
- In July 2017, the three main
contracts for engineering, exploration and mine development were
awarded.
- On August 15, 2017, the Company
launched the first phase of the 2017 surface exploration drilling
campaign for the 2017 Copperstone Mine exploration program and
pre-feasibility study.
- On August 21, 2017 the Company
commenced the first phase of the 2017 underground drill access mine
development for the 2017 Copperstone Mine exploration/development
program and pre-feasibility study.
- On August 25, 2017 the Company
began the first phase of the 2017 underground exploration and
development drilling program.
Outlook
- The Company is executing the first phase of its 9,100 meter
(30,000 feet) 2017 exploration and development program to define
and expand current resources in the Copperstone Zone and define new
resources in the Footwall Target.
-
- The Copperstone zone was previously mined by open pit and
underground methods producing over 500,000 ounces Au.
- Previous successful drilling demonstrating similar geology,
grade and width as the Copperstone zone has indicated that further
drilling is warranted to advance the definition the Footwall
Target
- Currently, assays are pending on many drill holes with expected
release in October 2017.
- The Company is executing a NI 43-101 Technical Pre-Feasibility
Report, currently anticipated for Q1 2018. Highlights of the
study are as follows:
-
- Resource Update
- Preliminary Mine Plan
- Metallurgical tests
- Capital and Operating Costs
- Project Economics
Board & Management
- On April 11th, 2017,
strengthened the Board and Management with the appointments of
Claudio Ciavarella as Chief
Executive Officer and Martin Kostuik
as President and Director.
- Strengthened the technical team on June
30th, 2017 with the appointment of Brad
Atkinson as Director of Exploration and Geology and Michael R. Smith as a technical advisor of
Exploration and Geology.
- Work force expanded at site to include 23 employees and
contractors.
Financial position
- Achieving and maintaining a strong balance sheet remains a top
priority. The Company continued to strengthen its financial
position:
-
- As at June 30, 2017, the Company
had cash and cash equivalents of $5.1
million, an increase of $4.7
million from June 30,
2016.
- Working capital at June 30, 2017
totaled $2.8 million, $19.3 million higher than at June 30, 2016.
- On February 28, 2017 the Company
reached an agreement with Jubilee Gold Exploration Ltd to settle
the accrued advance royalty payable. The companies have also
revised their existing royalty agreement to remove all future
advance royalty obligations. The result in a further
reduction in liabilities of over $1,000,000.
- As at June 30, 2017, The Company
reduced debt and liabilities by $9.6
million from the previous year June
30, 2016 and converted current short term debt into long
term facilities
Financing Activities
- On July 10, 2017, the Company
completed an oversubscribed Non-Brokered Private Placement of
$8,000,000 through the issuance of
44,444,444 Units comprised one common share ("Share") and one-half
of one common share purchase warrant ("Warrant"). Each
Warrant entitles the holder thereof to acquire a Share at a price
of $0.27 per share for a period of 24
months from the date of issuance, provided, that if, at any time
the Shares trade at a volume weighted average trading price of
$0.40, or greater, per Share for a
period of 20 consecutive trading days.
Operational Update of the Drilling Campaign for 2017
Pre-Feasibility Study and Exploration Program
Kerr Mines is pleased to provide
an update to the previously announced commencement of the 2017
Exploration and Development Program. The first phase of this
program is comprised of underground and surface drilling programs
as well as development drifting for underground drilling
access.
A second surface drill has commenced drilling at the Copperstone
Project. This addition to the existing surface core drill and
underground core drill is a reverse circulation drill capable of
drilling to 305 meters (1,000 feet) in all types of ground
conditions and will provide very expedient and cost effective
results. The drill will be used in areas where geologic
characteristics and data from core drilling are well
documented.
The underground drift access is progressing well as the first
exploration drill station has recently been completed. The
new underground drift is accessed from existing underground
workings and will extend the overall extents of mine access by
approximately 365 meters (1,200 feet) to the South East, along the
strike of the Copperstone Zone. This access is placed in
between the Copperstone Zone and the parallel Footwall Target,
giving simultaneous exploration drilling access to both
zones. The drift is also strategically placed to provide
access to the Copperstone Zone for potential future mining
purposes.
The 4,600 meters (15,000 feet) allocated to the first phase of
the surface program has mainly been dedicated to the Footwall
Target and the establishment of this parallel structure as a
mineralized zone. Core recovery has been excellent and
geologic features similar to the Copperstone Zone in rock type,
alteration, structure and thickness have largely been encountered
where expected.
The 4,600 meters (15,000 feet) of drilling allocated to the
first phase of the underground program has the goals of increasing
the confidence levels and ounces of the existing resource in the
Copperstone Zone, and further defining the parallel Footwall
Target. To achieve these goals, the program is designed to
contain confidence targets, infill targets and open ground
targets. Confidence targets are drilled in close proximity to
previous successful drill hole intercepts, infill targets increase
granularity and density of drilling results and open ground
drilling steps out beyond known results to extend the boundaries of
the resource. The drilling is producing good recovery of core
and is largely exhibiting the supporting characteristics of
mineralized zones where expected.
The Copperstone Zone produced over 500,000 ounces of gold
between 1987 and 1993 when the pit reached economic limits at the
time and when gold prices averaged under $400/troy ounce. The down-dip extension of
the Copperstone Zone, located primarily east of and below the
bottom of the open pit, has a mineral resource of 313,000 ounces at
10.35 gram per tonne (0.302 ounce per ton) (measured + indicated),
estimated in 2010*.
"We are very excited to add the second surface drill to the
first phase of this program. The program is advancing well on
all fronts and we are expecting to announce the first batch of
assay results in as little as four weeks from now. The
underground and surface programs are the cornerstone for the
forthcoming pre-feasibility study which is a key component to the
strategy of advancing the Copperstone Mine project towards a
production decision," said Martin
Kostuik, President Kerr
Mines.
The technical information in this news release has been prepared
in accordance with the Canadian regulatory requirements set out in
NI 43-101 and reviewed and approved by Michael R. Smith, Registered Geologist., a
"Qualified Person" as defined by NI 43-101 for this project.
*Mineral Resource Tabulation – Model capped at 5.0 oz Au/t with
a 0.15 oz Au/t cutoff grade, 1,038,000 tons (measured +
indicated) - NI 43-101 Technical Feasibility Report, Copperstone
Project, February 11, 2010.
Limited mining of this resource occurred in the period between Q4
2012 and Q3 2013 and will be tabulated when a new resource is
estimated in early 2018.
About Kerr Mines Inc.
Kerr
Mines is a North American gold development and exploration
company currently advancing the 100% owned, fully permitted
past-producing Copperstone Mine project. Copperstone is a
high-grade gold project located along the Walker Lane mineral belt
in mining-friendly Arizona. The project demonstrates
significant upside exploration potential within a 3,570 hectare
(8,821 acres) land package that includes a production history of
over 500,000 ounces of gold. The Company's current focus is
on maximizing Copperstone's potential by defining and expanding
current resources and strengthening the mine's economics leading to
a production decision.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements, including
current expectations on the timing of the commencement of
production and the rate of production, if commenced. These
forward-looking statements entail various risks and uncertainties
that could cause actual results to differ materially from those
reflected in these forward-looking statements. Such statements are
based on current expectations, are subject to a number of
uncertainties and risks, and actual results may differ materially
from those contained in such statements. These uncertainties and
risks include, but are not limited to, the strength of the Canadian
economy; the price of gold; operational, funding, and liquidity
risks; the degree to which mineral resource estimates are
reflective of actual mineral resources; and the degree to which
factors which would make a mineral deposit commercially viable are
present; the risks and hazards associated with underground
operations. Risks and uncertainties about Kerr Mines' business are more fully discussed in
the Company's disclosure materials, including its annual
information form and MD&A, filed with the securities regulatory
authorities in Canada and
available at www.sedar.com and readers are urged to read these
materials. Kerr Mines assumes no
obligation to update any forward-looking statement or to update the
reasons why actual results could differ from such statements unless
required by law.
Neither TSX nor its Regulation Services Provider (as that term
is defined in the policies of the TSX) accepts responsibility for
the adequacy or accuracy of this release and no stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
SOURCE Kerr Mines Inc.