The Board of Directors of International Tower Hill Mines Ltd.
("ITH" or the "Company") (TSX: ITH)(NYSE Amex: THM)(FRANKFURT: IW9)
has unanimously approved a proposal to undertake a spin-out
transaction to segregate its assets into two separate and highly
focused companies. Under the terms of the proposed transaction, ITH
will retain all assets relating to the Livengood gold project in
Alaska, an advanced stage project, together with approximately CAD
41 million in working capital. Corvus Gold Inc. ("Corvus") will
hold all of ITH's other existing Alaska and Nevada assets and have
approximately CAD 3 million in working capital. A condition of the
closing of the transaction will be that Corvus obtains conditional
approval for the listing of its common shares on a major Canadian
stock exchange.
Spin-out of Corvus Gold Inc.
The transaction is intended to maximize value for ITH
shareholders by creating a new exploration focused company that
will work to advance ITH's current advanced to early stage
exploration properties (four in Alaska and one in Nevada). Corvus
will also actively seek out and acquire new prospects. ITH will
concentrate on moving the flagship Livengood project towards
feasibility and a potential production decision. ITH shareholders
will be asked to vote on the proposal at a special meeting of
shareholders, expected to be convened in July, 2010. The proposal
to be presented to shareholders would result in each ITH
shareholder receiving, on the effective date of the transaction,
one new ITH common share and one-half of a Corvus common share in
exchange for each ITH common share held. Adequate advance notice of
the effective date will be provided.
Jeff Pontius, President and CEO of ITH, stated, "The management
and Board of Directors of ITH believe that the proposed spin-out is
an excellent opportunity for shareholders to fully maximize the
value of their holdings. The separation of Corvus as an independent
company will provide shareholders with significant leverage to
ITH's current exploration assets, the potential of which management
believes is not being reflected in the current share price.
Furthermore, the proposed spin-out enables ITH's expanding mine
development team to fully focus on moving the Livengood project
towards a potential production decision."
Jeffrey A. Pontius will retain his position as President and CEO
of ITH, and will also be appointed as the CEO and Chairman of
Corvus. Dr. Russell Myers, currently Vice-President, Exploration of
ITH, will be appointed as President of Corvus to lead exploration
and discovery programs in North America. Carl Brechtel, currently
COO of ITH, will continue as such to lead the development of the
Livengood Gold Project into what ITH anticipates will be a world
class gold mine in Alaska. The names of the additional directors
and senior management of Corvus are expected to be announced in the
near future.
Corvus will initially hold four advanced to early stage projects
in Alaska and the North Bullfrog project in Nevada. The primary
focus of Corvus will be to leverage its exploration expertise to
discover major new gold deposits. Furthermore, Corvus will seek to
build a non-operator gold producer with significant carried
interests and royalty exposure. To meet this objective, ITH has
joint ventured the four Alaskan projects to be transferred to
Corvus and anticipates that these projects will have over CAD 8
million in partner funded work taking place in 2010. Corvus will
also receive from ITH a 100% interest in the North Bullfrog project
in Nevada, which has a number of high priority, bulk tonnage and
high-grade vein targets to be addressed with a 10,000 metre drill
program scheduled for Fall 2010. In 2010, Corvus anticipates
receiving up to CAD 1 million in payments and fees from the four
existing Alaskan option/joint venture arrangements, as well as
significant issuances of shares from some of the respective
optionee companies. Corvus anticipates adding quality projects to
its portfolio to which it can add significant value through
exploration.
The proposed transaction, which is subject to shareholder
approval and regulatory acceptance, including the acceptance for
filing by Toronto Stock Exchange (the "TSX") and the approval of
the NYSE Amex and the Supreme Court of British Columbia, is
expected to be implemented through a plan of arrangement under the
Business Corporations Act (BC). ITH is presently in the process of
transferring to Corvus all of its interest in the Chisna, Terra,
LMS and West Pogo projects in Alaska and its interest in Talon Gold
Nevada Inc. (which holds the North Bullfrog Project in Nevada) and
CAD 3 million in working capital. Subject to the final approval of
the Board of ITH and the fixing of a date for the planned special
meeting, ITH shareholders will receive an information circular
setting out further details of the proposed spin-out
transaction.
Initial Corvus Projects
Nevada
North Bullfrog: The North Bullfrog Project covers approximately
27 km2 of patented and unpatented mining claims near Beatty, Nevada
and is located within the Bullfrog Mining District of Nevada, which
hosts Barrick Gold Corp's multimillion ounce Bullfrog Gold Mine
(located 14 kilometres to the south). As at August 25, 2008, the
North Bullfrog property hosts an indicated resource of 2.02 Mt at
an average grade of 0.88 g/t gold and 0.45 g/t silver and an
inferred resource of 0.95 Mt at an average grade of 0.78 g/t gold
and 0.36 g/t silver, both at a cutoff grade of 0.5 g/t gold (see
NR08-18 of September 2, 2008), as well as a number of high priority
targets for both large low-grade and narrow, high-grade vein
gold-silver systems. Corvus currently plans to complete a 10,000
metre drill program in the Fall of 2010 to test several of these
targets. Corvus will control 100% of the North Bullfrog project
(see NR09-20 of August 4, 2009) and will fund the 2010 program,
anticipated to cost approximately CAD 1 million, internally.
Alaska
Chisna: The Chisna Project covers approximately 840 km2 of State
of Alaska mining claims and Ahtna, Incorporated (an Alaska Native
Corporation) fee simple ground in an emerging new copper-gold belt
in Alaska. The project is targeting large copper-gold porphyry
systems similar to the Pebble deposit in western Alaska. To date,
two porphyry systems have been discovered that will be drilled in
2010. A number of other targets have been defined that will be
followed up on within this 65 kilometre long belt of gold and
copper mineralization (see NR08-23 dated November 4, 2008). This
project has been optioned to Ocean Park Ventures Corp. ("OCP")
which has the right to earn a 51% interest by contributing USD 20
million in exploration expenditures (USD 6.2 million budgeted in
2010), and making staged payments and share issuances, over 5
years. Upon earning the initial 51% interest, OCP may earn an
additional 19% by producing a bankable feasibility that delineates
a mining project on the Chisna property that produces at least
300,000 gold equivalent ounces per year. For details on the OCP
agreement, see NR09-29 dated November 5, 2009, and for details on
the agreement with Ahtna, Incorporated, see NR10-15 dated May 6,
2010).
Terra: The Terra Project represents a bonanza grade
low-sulphidation epithermal system with an overall strike length of
6 kilometres. Drilling by ITH in 2006/07 in one of four vein
structures has defined an estimated inferred resource (as at
February 1, 2008) of 428,000 tonnes at an average grade of 12.20
g/t gold (168,000 contained ounces) and 23.11 g/t silver (318,000
contained ounces) at a cutoff of 5.0 g/t gold (see NR08-04 dated
February 7, 2008). Two other vein structures have been drill tested
with positive results confirming the potential for significant
resource additions. The gold at Terra occurs as coarse native gold
and can be recovered by simple gravity methods, facilitating it as
a potentially rapid development small mining project. The Terra
project has been optioned to a private Nevada company, which can
earn an initial 51% interest by contributing a total of USD
6,000,000 in exploration expenditures over three years (USD
1,000,000 in 2010) and making staged cash payments of USD 300,000
and issuing 750,000 common shares over the same three-year period
(USD 50,000 and 250,000 shares in 2010). Upon having completed its
initial contribution, the private company will have the option to
increase its JV interest by 29% (to 80% total) by providing a
subsequent contribution of an additional USD 3.05 million in
funding in the fourth year, paying an additional USD 150,000 and
issuing an additional 150,000 common shares. (for details, see
NR10-05 dated March 4, 2010).
LMS: The LMS Project covers approximately 57 km2 within the
Goodpaster Mining District of Alaska, which hosts the world class
Pogo Gold Mine 40 kilometres to the north of the property. Prior
drilling by ITH in 2006/07 has defined an estimated inferred
resource (as at February 1, 2008) of 5.86 Mt at an average grade of
0.89 g/t gold (167,000 contained ounces) at a cutoff of 0.3 g/t
gold (see NR08-05 dated February 13, 2008). The property contains a
number of un-tested gold targets that will be the focus of the
partner funded exploration in 2010. ITH has signed a binding letter
of intent to joint venture the LMS project to First Star Resources
Inc. of Vancouver, British Columbia (TSXV: FS) ("First Star").
Under the terms of the LOI, First Star has the ability to earn an
initial 55% interest, and a second option to earn a further 45% for
a total 100% interest. To earn the 55% interest First Star will pay
USD 280,000 and expend USD 3.5 million on exploration. To acquire a
100% ownership, First Star will fund the project through to an
advanced exploration stage by spending a further USD 3 million
prior to December 31, 2015, or by producing, filing and having
accepted by the TSX Venture Exchange a NI 43-101 compliant inferred
resource of two million ounces of gold using a 0.3 g/t cutoff
grade, whichever costs less. A net smelter returns ("NSR") royalty
of 3% or 4% on gold/silver and 1% on all other products will be
payable to Corvus. The royalty can be reduced by 1% by paying
Corvus USD 3 million.
West Pogo: The West Pogo project lies 4.5 kilometres west of the
Pogo Gold Mine, and is situated along its western property
boundary. Work to date by ITH has defined a surface gold anomaly
approximately 1.5 kilometres in strike length with potential for
high-grade, vein type, gold mineralization (see NR08-26 dated
December 1, 2008). ITH has signed a binding letter of intent to
joint venture the LMS project to First Star. Under the terms of the
LOI, First Star has the ability to earn an initial 55% interest,
and a second option to earn a further 45% for a total 100%
interest. To earn the 55% interest First Star will pay USD 250,000
and expend USD 2.8 million on exploration. To acquire a 100%
ownership, First Star will fund the project through to an advanced
exploration stage by spending a further USD 2 million prior to
December 31, 2015, or by producing, filing and having accepted by
the TSX Venture Exchange a NI 43-101 compliant inferred resource of
one million ounces of gold using a 0.3 g/t cutoff grade, whichever
costs less. A NSR royalty of 3% or 4% on gold/silver and 1% on all
other products will be payable to Corvus. The royalty can be
reduced by 1% by paying Corvus USD 3 million.
Readers are referred to the most recent NI 43-101 technical
reports on the North Bullfrog, Terra and LMS projects, which are
available on SEDAR under the ITH disclosure documents, and on the
Chisna project, which is available on SEDAR under the Ocean Park
disclosure documents, for further information on these
projects.
Qualified Person
Jeffrey A. Pontius (CPG 11044), a qualified person as defined by
National Instrument 43-101, has supervised the preparation of the
scientific and technical information that forms the basis for this
news release and has approved the disclosure herein. Mr. Pontius is
not independent of ITH, as he is the President and CEO and holds
common shares and incentive stock options.
About International Tower Hill Mines Ltd.
International Tower Hill Mines Ltd. is a resource exploration
company, focused in Alaska and Nevada, which controls a number of
exploration projects representing a spectrum from early stage to
the advanced multimillion ounce gold discovery at Livengood. ITH is
committed to building shareholder value through new discoveries
while maintaining a majority interest in its key holdings, thereby
giving its shareholders the maximum value for their investment.
On behalf of International Tower Hill Mines Ltd.
Jeffrey A. Pontius, President and Chief Executive Officer
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 27E of
the Exchange Act. All statements, other than statements of
historical fact, included herein including, without limitation,
statements regarding the anticipated content, commencement and cost
of exploration programs, anticipated exploration program results,
the discovery and delineation of mineral
deposits/resources/reserves, the potential for the completion of
the spin-out of certain assets of ITH into Corvus Gold Inc., plans
and expectations related to Corvus Gold Inc., plans of ITH related
to Livengood project, the potential for the preparation of a
feasibility study and potential for production from the Livengood
project, the potential for the optionees/joint venture partners on
the Terra, Chisna, LMS and West Pogo projects to incur the
expenditures, make the cash payments and/or issue the required
shares as necessary to complete the acquisition of an interest in
such, business and financing plans and business trends, are
forward-looking statements. Information concerning mineral resource
estimates and the preliminary economic analysis thereof also may be
deemed to be forward-looking statements in that it reflects a
prediction of the mineralization that would be encountered, and the
results of mining it, if a mineral deposit were developed and
mined. Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will
prove to be correct. Forward-looking statements are 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. The Company cautions
investors that any forward-looking statements by the Company are
not guarantees of future results or performance, and that actual
results may differ materially from those in forward looking
statements as a result of various factors, including, but not
limited to, variations in the nature, quality and quantity of any
mineral deposits that may be located, variations in the market
price of any mineral products the Company may produce or plan to
produce, the inability of the Company to obtain any necessary
permits, consents or authorizations required for its activities
(including the proposed Corvus Gold Inc. spin-out), the inability
of the Company to produce minerals from its properties successfully
or profitably, to continue its projected growth, to raise the
necessary capital or to be fully able to implement its business
strategies, and other risks and uncertainties disclosed in the
Company's Annual Information Form filed with certain securities
commissions in Canada and the Company's annual report on Form 40-F
filed with the United States Securities and Exchange Commission
(the "SEC"), and other information released by the Company and
filed with the appropriate regulatory agencies. All of the
Company's Canadian public disclosure filings may be accessed via
www.sedar.com and its United States public disclosure filings may
be accessed via www.sec.gov, and readers are urged to review these
materials, including the technical reports filed with respect to
the Company's mineral properties.
Cautionary Note Regarding References to Resources and
Reserves
National Instrument 43 101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") is a rule developed by the Canadian
Securities Administrators which establishes standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Unless otherwise
indicated, all resource estimates contained in or incorporated by
reference in this press release have been prepared in accordance
with NI 43-101 and the guidelines set out in the Canadian Institute
of Mining, Metallurgy and Petroleum (the "CIM") Standards on
Mineral Resource and Mineral Reserves, adopted by the CIM Council
on November 14, 2004 (the "CIM Standards") as they may be amended
from time to time by the CIM.
United States shareholders are cautioned that the requirements
and terminology of NI 43-101 and the CIM Standards differ
significantly from the requirements and terminology of the SEC set
forth Industry Guide 7. Accordingly, the Company's disclosures
regarding mineralization may not be comparable to similar
information disclosed by companies subject to the SEC's Industry
Guide 7. Without limiting the foregoing, while the terms "mineral
resources", "inferred mineral resources" and "indicated mineral
resources" are recognized and required by NI 43-101 and the CIM
Standards, they are not recognized by the SEC and are not permitted
to be used in documents filed with the SEC by companies subject to
Industry Guide 7. Mineral resources which are not mineral reserves
do not have demonstrated economic viability, and United States
shareholders are cautioned not to assume that all or any part of a
mineral resource will ever be converted into reserves. Further,
inferred resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or
economically. It cannot be assumed that all or any part of the
inferred resources will ever be upgraded to a higher resource
category. In addition, the NI 43-101 and CIM Standards definition
of a "reserve" differs from the definition adopted by the SEC in
Industry Guide 7. In the United States, a mineral reserve is
defined as a part of a mineral deposit which could be economically
and legally extracted or produced at the time the mineral reserve
determination is made.
Cautionary Note Concerning Similar or Adjacent Mineral
Properties
This press release contains information with respect to adjacent
or similar mineral properties in respect of which the Company has
no interest or rights to explore or mine. The Company advises US
investors that the US Securities and Exchange Commission's mining
guidelines strictly prohibit information of this type in documents
filed with the SEC. Readers are cautioned that the Company has no
interest in or right to acquire any interest in any such
properties, and that mineral deposits on adjacent or similar
properties are not indicative of mineral deposits on the Company's
properties.
The securities contemplated to be distributed in the proposed
transaction have not been and will not be registered under the
United States Securities Act of 1933, as amended, or any state
securities laws, and are anticipated to be issued in the United
States pursuant to exemptions from such registration
requirements.
This press release is not, and is not to be construed in any way
as, an offer to buy or sell securities in the United States.
NR10-17
Contacts: International Tower Hill Mines Ltd. Quentin Mai
Vice-President - Corporate Communications 1-888-770-7488 (toll
free) or (604) 683-6332 (604) 408-7499 (FAX)
qmai@internationaltowerhill.com www.ITHmines.com /
www.internationaltowerhill.com
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