VANCOUVER, Aug. 22, 2017 /CNW/ - Amarc Resources Ltd.
("Amarc" or the "Company") (TSX-V: AHR; OTCBB: AXREF) is pleased to
announce it has entered into another Mineral Property Farm-In
Agreement (the "JOY Agreement") with Hudbay Minerals Inc.
("Hudbay") (TSX:HBM; NYSE:HBM). The new Agreement with Hudbay, has
a similar structure to the recently announced IKE Project Farm-In
Agreement (see Amarc News Release dated July
6, 2017), and has been established to advance the Company's
72 km2, 100% owned, JOY porphyry copper-gold mineral
property (the "JOY Project") which is located 25 km north of AuRico
Metals Inc.'s Kemess South Mine and Kemess Underground Project site
in north-central British Columbia
("BC"). Under the terms of the JOY Agreement, Hudbay may
acquire through a staged investment process, up to a 60% ownership
interest in the Project.
Robert Dickinson, Executive
Chairman of Amarc: "The prospectivity of the Kemess District is
well-known to Hunter Dickinson and
the Amarc technical team, as we were the first to develop its
porphyry potential – acquiring both the early-stage Kemess South
and Kemess North prospects and advancing them into significant
porphyry copper-gold deposits. We are excited to be combining
our proven porphyry copper discovery track record with Hudbay's
acknowledged capabilities as a first-class mine builder and
operator. We believe it will be a potent partnership that allows us
to advance the JOY Project in an expeditious way, and in a manner
that balances technical, economic, environmental and social
considerations."
Diane Nicolson, President of
Amarc: "We are thrilled to welcome Hudbay as a partner at JOY,
following our recent announcement of our agreement with them on the
IKE Project. We believe that JOY has the potential to be a
significant, new copper-gold camp in northern British Columbia, and an important extension
to the Kemess District. Having secured the required permits,
our crews have mobilized to the field to undertake a comprehensive
exploration program, including drilling, to assess the substantive
porphyry copper-gold deposit targets on the JOY property."
Agreement with Hudbay on JOY Project
Under the terms of the Agreement Hudbay can earn an initial 49%
interest in the JOY Project under a Stage 1 Farm-in Right by
funding $15 million1 of
expenditures before December 31,
2020, of which $1.9 million is
committed for 2017.
When its Stage 1 Farm-in Right is exercised, Hudbay can,
pursuant to a Stage 2 Farm-in Right, earn an additional 1%
ownership interest in the Project (for a total 50% ownership
interest) by funding $5 million of
expenditures (for a total of $20
million) also before December 31,
2020.
Stage 1 and Stage 2 Farm-in expenditures can be accelerated by
Hudbay at its discretion. Amarc will be the operator during
the Stage 1 and Stage 2 periods. A Joint Venture ("JV") will
be formed when Hudbay has acquired a 49% interest in the
Project.
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1 All
currency values are Canadian dollars.
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Provided that Hudbay has exercised the Stage 2 Farm-in Right and
acquired a 50% interest, it can then elect to go forward via one of
two paths.
First, Hudbay can replace Amarc as operator of the JV after it
funds all project expenditures and completes a Feasibility Study
for the JOY Project by December 31,
2025. Having gained operatorship, Hudbay can then choose to
either go forward with Amarc in a 50/50 participating JV or Hudbay
can instead elect to continue with its Farm-in (the "Stage 3
Farm-in Right") to acquire an additional 10% interest in the JOY
Project (for a total 60% ownership interest). To exercise its
Stage 3 Farm-in Right, Hudbay must fund all expenditures required
to submit a British Columbia
environmental assessment ("EA") application for the JOY Project
and, if applicable, a Canadian EA application, with the
application(s) being accepted for review by December 31, 2026. In addition, Hudbay must
also continue to fund all approved project expenditures until all
necessary EA Certificates are received. Following receipt of the EA
Certificate(s), all approved JOY Project expenditures going forward
will be shared by Hudbay and Amarc on a pro rata basis (Hudbay
60%/Amarc 40%) under the JV.
As a second alternative path, after exercising its Stage 2
Farm-in Right Hudbay can elect to proceed directly to the Stage 3
Farm-in Right, so immediately becoming the operator, and acquire a
further 10% interest (for a total 60% ownership interest) by, like
above, submitting a British Columbia EA application and, if
applicable, a Canadian EA application by December 31, 2026. Again, in this instance,
Hudbay must also fund all project expenditures until receipt of the
necessary EA Certificate(s). Following receipt of project
approvals from government, all approved JOY Project expenditures
going forward will be shared by Hudbay and Amarc on a pro rata
basis (Hudbay 60%/Amarc 40%) under the JV.
Hudbay has a one-time right to defer either of its 2019 or 2020
expenditures in the Stage 1 or Stage 2 Farm-in periods, for a
one-year period, subject to certain conditions. If this
deferral occurs, Amarc will have a "co-expenditure right", whereby
it can incur and fund approved additional expenditures on the JOY
Project up to the amount of the deferred expenditures. Hudbay
may elect to reimburse Amarc for these additional expenditures,
thereby retaining its interest in the Project. Under either
alternative path, if Hudbay does not submit the EA application(s)
by December 31, 2026, then Amarc will
become operator again.
About the JOY Project
Amarc's JOY property is located 310 km north of Mackenzie, BC, and 25 km north of the Kemess
South Mine site where owner, AuRico Metals recently secured a BC EA
Certificate for its nearby Kemess Underground Project.
Past operators conducted prospecting-style work on the JOY
claims – collecting some 3,000 soil samples, 800 rock samples and
30 silt samples – but undertook no drilling. These surface
surveys clearly indicate a number of substantial porphyry
copper-gold and epithermal silver-gold deposit targets across the
JOY property. The copper-gold deposit targets located at JOY
are considered by Amarc to be a northern extension to the prolific
Kemess porphyry copper-gold district. Most importantly,
historical soil and rock sampling along with a recent soil survey,
has revealed a regionally significant, 9 km2 copper,
gold, molybdenum, silver and zinc geochemical anomaly, which
potentially reflects a large and shallowly buried, copper-gold
porphyry deposit.
Approved Project expenditures of $1.9
million will be directed towards core drilling to evaluate
this outstanding copper-gold soil anomaly for its major deposit
potential. Extensive surface exploration surveys, including
Induced Polarization, geological mapping and talus fine sampling,
will also be completed to firm up further porphyry copper-gold
deposit targets for testing next year. Amarc has mobilized
crews to the JOY site for the 2017 drilling season.
About Amarc Resources
Amarc is a mineral exploration and development company with an
experienced and successful management team focused on developing a
new generation of BC porphyry copper mines. By combining
strong projects and funding with successful management, Amarc has
created a solid platform to now commence value creation.
Amarc is advancing its 100% owned IKE, DUKE and JOY porphyry
copper deposit districts, located in southern, central and northern
BC, respectively, each with proximity to industrial infrastructure,
power, rail and highways. These projects represent
significant potential for the discovery of multiple,
important-scale, porphyry copper-gold and copper-molybdenum
deposits.
The 462 km2 IKE Project is located 33 km northwest of
the historical mining community of Gold Bridge. Over the last
three years, Amarc has made a significant new porphyry
copper-molybdenum-silver discovery, completing over 12,000 metres
of drilling in 21 wide-spaced core holes in the IKE deposit that
indicate the potential for extensive resource volumes which remain
open to expansion in all directions. Extensive regional surveys
have also identified numerous porphyry copper
(±molydenum±gold±silver) deposit targets all within 10 km of IKE.
Amarc believes the IKE Project has the potential to possess the
grades and tonnages to develop into an important mining camp. Amarc
has partnered with Hudbay to efficiently fund the advancement of
the IKE Project (see news release July 6,
2017) and as operator, has mobilized crews to the IKE site
for the 2017 drilling season.
Amarc's DUKE deposit and an adjacent 190 km2 porphyry
copper district is located 80 km northeast of Smithers, BC and 30 km north of former
copper-gold mines (Bell and Granisle) operated by Noranda Mines. The DUKE Project area is
logging road accessible from Smithers or Fort St.
James. Historically, DUKE has been explored with surface
geochemical and geophysical surveys, as well as 30 shallow diamond
drill holes. Many of the holes intersected significant
lengths of porphyry copper-molybdenum-silver-gold mineralization
which remains open both laterally and to depth. The surrounding
district hosts multiple, second-order porphyry copper deposit
targets. Plans are to drill the DUKE deposit target in fall
2017.
Amarc is associated with Hunter Dickinson Inc. ("HDI"), a
diversified, global mining company with a 25+-year history of
porphyry discovery and development success. Previous and
current HDI porphyry projects include some of BC's and the world's
most important mineral resources – such as Pebble, Mount Milligan,
Kemess South, Kemess North, Gibraltar, Prosperity, Xietongmen, Newtongmen,
Florence, Sisson, and Maggie. From its head office in
Vancouver, Canada, HDI applies its
unique strengths and capabilities to acquire, develop, operate and
monetize mineral projects to provide superior returns to
shareholders.
Amarc is committed to working collaboratively with governments
and stakeholders to achieve responsible development of its
projects, while contributing to sustainable development of the
communities in which it works. All work programs are
carefully planned to achieve high levels of environmental and
social performance.
Qualified Person as Defined Under National Instrument
43-101
Mark Rebagliati, P. Eng., a
Qualified Person as defined under National Instrument 43-101, has
reviewed and approved the technical content of this release.
ON BEHALF OF THE BOARD
Ronald W. Thiessen
Chief Executive Officer
Neither the TSX Venture Exchange nor any other regulatory
authority accepts responsibility for the adequacy or accuracy of
this release.
Forward Looking and other Cautionary Information
This news release includes certain statements that may be deemed
"forward-looking statements". All such statements, other than
statements of historical facts that address exploration drilling,
exploitation activities and other related events or developments
are forward-looking statements. Although the Company believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements.
Assumptions used by the Company to develop forward-looking
statements include the following: Amarc's projects will obtain all
required environmental and other permits and all land use and other
licenses, studies and exploration of Amarc's projects will continue
to be positive, and no geological or technical problems will occur.
The Company cannot guarantee that the Consolidated Loan and
issuance of securities contemplated by this release will
complete. There is no certainty that the Company will be able
to repay the Consolidated Loan or any other outstanding debt or
liability of the Company in a timely manner or at all.
Factors that could cause actual results to differ materially from
those in forward-looking statements include market prices,
potential environmental issues or liabilities associated with
exploration, development and mining activities, exploitation and
exploration successes, continuity of mineralization, uncertainties
related to the ability to obtain necessary permits, licenses and
tenure and delays due to third party opposition, changes in and the
effect of government policies regarding mining and natural resource
exploration and exploitation, exploration and development of
properties located within Aboriginal groups asserted territories
may affect or be perceived to affect asserted aboriginal rights and
title, which may cause permitting delays or opposition by
Aboriginal groups, continued availability of capital and financing,
and general economic, market or business conditions. Investors are
cautioned that any such statements are not guarantees of future
performance and actual results or developments may differ
materially from those projected in the forward-looking statements.
For more information on Amarc Resources Ltd., investors should
review the Company's annual Form 20-F filing with the United States
Securities and Exchange Commission at www.sec.gov and its home
jurisdiction filings that are available at www.sedar.com.
SOURCE Amarc Resources Ltd.