Goldspike Acquires High Grade Drill Hole Zinc Discovery
TORONTO, ONTARIO--(Marketwired - Jul 2, 2014) - Goldspike
Exploration Inc. ("Goldspike" or the "Company") (TSX-VENTURE:GSE)
is pleased to report that it has entered into an assignment
agreement granting the Company the right to acquire a 100% interest
in the Lone Mountain Zinc Property (the "Property") comprised of
170 claims in Eureka County, Nevada, (Figure 1). The Property
contains a significant drill hole zinc lead discovery that
intersects several intervals of high grade zinc lead mineralization
including an interval at the bottom of the hole assaying 41.3% zinc
and 1.4% lead over 4.1 metres. The discovery hole ended in high
grade zinc lead mineralization. No further work has been completed
on the Property since this zinc discovery in 2007. The Company has
commenced fieldwork on the Property and will begin drilling as soon
as arrangements can be finalized.
Highlights on the Property include:
- High grade zinc lead mineralized intervals were discovered in
reverse circulation drill hole LM-07-01. The mineralization is
reported to commence at 114.3 metres down hole and to continue to
the bottom of the hole at 155.4 metres for an aggregate interval of
41.1 metres.
- No sample material was recovered from one interval of 7.62
metres. This interval was bounded by high grade zinc lead
mineralization. It is not known if this interval was mineralized.
As a result of a lack of assays for this interval, composite assay
values for the entire interval cannot be calculated.
- The hole ended in high grade zinc lead mineralization grading
38.8% zinc and 2.3% lead over 1.52 metres.
- The drill hole encountered lead values of up to 51.24% over
1.52 metres in the upper part of the mineralized interval.
- The drill hole contained zinc values of up to 48.4% over 1.52
metres in the lower part of the mineralized interval.
- Only two intervals were assayed for germanium content and these
intervals at the bottom of the discovery hole were found to contain
significant germanium with values of 103 grams per tonne and 133
grams per tonne.
- Composite assay intervals in the discovery drill hole included
an upper high grade interval grading 32.55% lead and 0.71% zinc
over 6.08 metres and a high grade interval at the bottom of the
hole grading 41.3% zinc and 1.4% lead over 4.2 metres.
- At the time of the discovery in 2007 and by the time the
presence of the high grade zinc lead mineralization was established
by assaying, the drill had been de-mobilized from the Property and
no further drilling has been completed since the receipt of these
high grade zinc lead assays.
- While it was reported that further work was contemplated and
planned, it appears that a series of events that included corporate
M&A activity, the global financial crisis and metal and stock
market turmoil apparently precluded any follow-up exploration on
the Property. The vendors eventually reacquired the Property and
have held it privately since that time.
- At the time of the zinc lead discovery, the lessee was
evaluating the Property (as defined at that time) for its precious
metal potential.
- As part of that exploration program the lessee at the time
carried out programs that included geological mapping of the
somewhat limited outcrop, geophysical surveys and compilations, as
well as soil geochemical surveying. This preliminary work was
followed by a five hole, 795.5 metre reverse circulation drilling
program. Current available information indicates no field work was
competed after the drilling was terminated.
- Of particular note, the soil geochemical sampling was carried
out on wide spaced (500 metre centered) lines. Samples were
collected at only 50 metre intervals on the lines. The samples were
analyzed for a suite of elements and an evaluation of those results
show the strong correlation of a suite of indicator elements with
the location of the historic zinc mine workings and scattered
surface trenches that contain zinc mineralization as well as the
location of the high grade zinc lead mineralization in the
discovery drill hole, (Figure 2), (Figure 4).
- The suite of elements that correlate with the presence of zinc
lead mineralization include: zinc, lead, barium, mercury, cadmium,
arsenic, copper and thallium. The overall trend of this suite of
elements can be traced for more than 3 kilometres in a direction
sub-parallel to the bedding in a general northwest to southeast
direction. The geochemical anomaly tested with the discovery hole
was not the strongest part of the more than 3 kilometre long
multi-element anomaly.
- Goldspike has mobilized exploration personnel to the Property
to undertake field work in preparation for drilling and the Company
will commence drilling immediately upon receipt of the necessary
approvals.
At this time, the Company has not been able to ascertain the
details, if any, of any QA/QC programs that were in place at the
time of the last work on the Property and therefore the Company
advises readers that all technical data in this release must be
assumed to be historical in nature and as such should not be relied
upon.
Commenting on the acquisition, the Company's President and CEO
Bruce Durham said; "since our IPO in August of 2011 we have been
searching for a special project to complement our extensive Yukon
holdings and we have reviewed dozens of opportunities. What makes
the Lone Mountain Zinc Property so special is the fact that it is a
high grade, very significant drill hole discovery that remains open
in all directions. No follow-up was ever completed. The land
package covers a large area, the target is extensive and the
project is located in a great jurisdiction. We are excited to
secure the Property and can't wait to start drilling."
History of Work and Geology
Zinc mineralization was first reported to have been mined in the
area of the Property in 1942 and operations between 1942 and 1964
were reported to have mined nearly 5 million pounds of zinc, 650
thousand pounds of lead and 4 thousand ounces of silver. Mined
mineralization has been reported to consist of smithsonite,
zincite, hydrozincite, cerussite, malachite and azurite along with
minor sulphides. At this time it does not appear there is any
public record of any significant history of modern exploration work
in the area of the Property for zinc lead mineralization. The
discovery of the high grade zinc lead mineralization in hole
LM-07-01 appears to be a largely fortuitous event that occurred in
the course of exploring the property for precious metal
mineralization. The Company is not aware of any mineralogical work
having been completed on the mineralization in discovery hole
LM-07-01. Part of the property that extends well to the southeast
of the discovery hole is reported to have prospectivity for gold.
The Company will evaluate these prospects as work on the Property
proceeds.
Work by the previous lessee in the period from 2006-2008
included re-evaluation of the gravity and magnetic data available
on the Property. Their evaluation also included the geochemical
surveying as described above and also included a CSAMT geophysical
survey that successfully identified a significant resistivity
contact crossing much of the Property in a direction mostly
parallel to the interpreted stratigraphic trends in the area. The
high grade zinc lead mineralization appears to sit very close to
the interpreted resistivity contact, (Figure 3). This interpreted
contact may prove to be an excellent marker in follow-up drilling
programs.
The mineralization discovered in drill hole LM-07-01 has not
been well studied and remains open to considerable interpretation.
The mineralization is thought to be located at or close to the
contact of the Devils Gate Formation, an Early to Middle Devonian
dolomite in the Nevada Formation. Rocks in the area generally
strike northwest-southeast and dip generally 55 degrees easterly,
(Figure 5). There is a suggestion by some workers that the
mineralization may be located at the intersection of northwest and
generally northeast trending structures, however, the single drill
hole in the high grade zinc lead discovery to-date, LM-07-01,
precludes any conclusions at this time as to the orientation of the
mineralization. The previous operator of the Property drilled four
additional holes to the discovery hole. The second hole, drilled on
the same section line as discovery hole LM-07-01, was collared 100
metres to the north and drilled parallel to hole LM-07-01, (Figure
5). The second hole was stopped at 183 metres and based on the
geology and assay data from samples at the bottom of the hole it
appears to the Company that this hole was stopped just above the
down dip extension of the high grade zinc lead mineralization. The
remaining three holes were drilled 3 kilometres to the east of the
discovery hole evaluating other unrelated targets, thereby leaving
the high grade zinc lead discovery completely untested up dip, down
dip and along strike.
Principal Transaction Terms
Goldspike has been granted the right to acquire a 100% interest
in the 170 claims that comprise the Property pursuant to an
assignment agreement (the "Assignment Agreement") between Norvista
Capital Corporation ("Norvista") and the Company. Pursuant to the
terms of the Assignment Agreement, Norvista will assign all of its
rights and obligations under a lease agreement of the Property (the
"Lease Agreement") between Norvista, as lessee, and Owyhee
Exploration II LLC, as lessor, to Lone Mountain Zinc Ltd., a
wholly-owned Nevada subsidiary of the Company.
Under the terms of the Lease Agreement the lessee has the right
to continually lease the Property for a minimum 20 year period or
longer if the Lease Agreement is extended beyond 20 years. The
principal terms of the Lease Agreement require the lessee to make
annual lease payments of $25,000 to the lessor during the first
three years of the Lease Agreement, after which the lease payments
increase to $50,000 per year in years four and five. Beginning in
year six and thereafter the lease payments increase to $100,000 per
year, however, these lease payments are treated as advances against
royalty payments from production, if any, during the year the lease
payment is made.
The lessee must also make all payments to keep the Property in
good standing and must carry out work programs during the first
five years of the Lease Agreement. The work programs are comprised
of a minimum of $50,000 per year in the first three years of the
Lease Agreement and a minimum of $100,000 in years four and five of
the Lease Agreement.
The Lessor will retain a 3% net smelter returns royalty on
precious metals production, if any, and a 2% net smelter returns
royalty on base metal production, if any, from the Property. The
precious metals and base metals net smelter returns royalties on
the Property can be reduced to 2% and 1%, respectively, under
certain circumstances.
R. Bruce Durham, President and Chief Executive Officer of the
Company, and Donald H. Christie, Chief Financial Officer and
Secretary of the Company, both also serve as directors of Norvista.
As such, the assignment of the Property under the terms of the
Assignment Agreement `is a "related party transaction" for the
purposes of Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). The Company is relying on an exemption from the minority
approval and formal valuation requirements of MI 61-101 due to the
fact that the value of the transaction does not represent greater
than 25% of the Company's market capitalization. The independent
directors of the Company approved the Assignment Agreement and
Messers. Durham and Christie abstained from voting on the approval
of the Assignment Agreement. Other than Mr. Durham and Mr.
Christie, no director of the Company abstained from voting on the
Assignment Agreement.
Pursuant to the terms of the Assignment Agreement the Company
will issue 2,000,000 common shares in its capital stock (the
"Common Shares") to Norvista at a deemed value of $0.15 per Common
Share and grant Norvista the right to subscribe to a private
placement of up to 3,333,333 Common Shares at a price of $0.15 per
Common Share for gross proceeds of up to $500,000 (the
"Financing").
The closing of the Assignment Agreement and the completion of
the proposed Financing are subject to the approval of the TSX
Venture Exchange.
The scientific and technical information in this press release
has been reviewed by the Company's President and CEO, Bruce Durham,
P.Geo, who is a "Qualified Person" as that term is defined under
National Instrument 43-101 - Standards of Disclosure for
Mineral Projects.
All technical information contained herein is considered to be
historical in nature and should not be relied upon. The Company is
in the process of determining the quality and completeness of the
work completed in the period 2006-2008 and is satisfied at this
point that the work was completed in a professional manner and will
provide updates on its follow-up work on this matter as
appropriate.
Yukon
The Company will also commence work on some of its landholdings
in Yukon over the next 30 days particularly at the Livingstone
project where the Company hopes to expand on the bedrock gold
discovery last year in an area located up hill and upstream from
the historic Livingstone placer gold creeks where more than 50,000
ounces in mostly coarse gold nuggets were mined historically.
This press release was originally released on June 24, 2014 and
is being re-issued today.
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.
CAUTIONARY STATEMENT: This news release contains forward-looking
information which is not comprised of historical facts.
Forward-looking information involves risks, uncertainties and other
factors that could cause actual events, results, performance,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking information.
Forward-looking information in this news release relates to, among
other matters, the Company's indirect interest in the Property
under the terms of the Assignment Agreement and the proposed
Financing. Factors that could cause actual results to differ
materially from such forward-looking information include, but are
not limited to, failure to convert any estimated mineral resources
to reserves, capital and operating costs varying significantly from
estimates, the preliminary nature of metallurgical test results,
delays in obtaining of failures to obtain required regulatory
approvals, political risks, uncertainties relating to the
availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of the
Property, risks involved in the mineral exploration and development
industry, and those other risks set out in the Company's public
documents filed on SEDAR. The Company believes that the assumptions
and factors used in preparing the forward-looking information in
this news release are reasonable. Nevertheless, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
applicable securities laws.
Goldspike Exploration Inc.4 King St. West, Suite 1500, Toronto,
Ontario M5H 1B6Bruce Durham, President and
CEO416-504-8821bdurham@goldspike.cawww.goldspike.ca