Klondike Silver Corp. Executes Agreement to Option a Portion of the Silver Slocan Mining Camp, British Columbia
January 08 2013 - 8:00AM
Marketwired Canada
Klondike Silver Corp. (TSX VENTURE:KS) (Klondike) is pleased to announce that it
has executed a formal Option Agreement (the "Agreement") with Victory Mountain
Ventures Ltd. (TSX VENTURE:VMV) (Victory) to option a portion of the Silver
Slocan Mining Camp located in south eastern British Columbia.
The primary exploration focus will be on the silver-lead-zinc expansion
potential to the west of the Silvana Mine located centrally in the Silver Slocan
Mining Camp. The map provided at this link
(http://www.klondikesilver.com/i/maps/longitude.jpg) illustrates the exploration
potential between Klondike's Silvana Mine and the Mammoth Mine which is along
strike to the west. The area labeled as the "Prospective Horizon" is where
exploration will be focused as the existing underground mine structure will
allow for underground drilling to explore the western extension potential.
The second land package offered in the option agreement are the Cody Creek
claims located to the northeast and is believed to be along the same strike as
the Silvana Mine. Cody Creek has excellent access and exploration potential
containing several past producing mines. (Refer to the Assessment Report at the
following link: http://aris.empr.gov.bc.ca/ArisReports/31556.PDF).
With the advantage of modern exploration techniques in this historically
productive mining camp, the parties are hoping to discover new deposits and
develop past producing mines in the Slocan Mining Camp.
Option Agreement Terms:
For Victory to acquire a 50% right, title and interest on the Silvana West and
Cody Creek claims, it must make an initial cash payment of $75,000 upon TSX
Venture Exchange approval, issue 2,000,000 shares to Klondike and incur
$3,750,000 dollars in exploration costs over a three year period broken down as
follows;
----------------------------------------------------------------------------
Shares issued to Cash issued to Victory's Total
Date/Anniversary Klondike Klondike Project Interest
----------------------------------------------------------------------------
Exchange Approval $75,000
----------------------------------------------------------------------------
Exchange Approval 500,000
----------------------------------------------------------------------------
Year 1 500,000
----------------------------------------------------------------------------
Year 2 500,000
----------------------------------------------------------------------------
Year 3 500,000 50%
----------------------------------------------------------------------------
Total 2,000,000 $75,000 50%
----------------------------------------------------------------------------
Victory must incur a minimum in expenditures for exploration and development
work on the property of $3,750,000 as follows:
i. $1,000,000 of expenditures on or before the first anniversary that
Regulatory Approval of this Agreement was received; and
ii. A cumulative total of $2,250,000 of expenditures on or before the second
anniversary that Regulatory Approval of this Agreement was received; and
iii.A cumulative total of $3,750,000 of expenditures on or before the third
anniversary that Regulatory Approval of this Agreement was received.
Under the Agreement, Victory will also be entitled to a royalty payment equal to
50% of the net profit received from the sale of any newly discovered resources
should exploration prove successful. Any cash payments due to Victory will be
credited toward the Expenditure requirements under the Agreement until the
option has been satisfied. All agreements will be subject to TSX Venture
Exchange approval.
If Victory exercises the option, Klondike agrees that it will grant to Victory a
further twenty-five percent (25%) interest in and to the property on terms and
conditions to be agreed upon between the parties and subject to a further option
agreement between the parties.
About Klondike Silver Corp.
Klondike Silver Corp. has assembled a quality portfolio of silver properties
throughout Canada, most notably, in the historic Slocan Mining District
southeastern British Columbia. This historic camp has produced more than 24
million ounces of silver since the first discoveries in the late 1800s. Klondike
Silver is the dominant land-holder controlling a majority of the historic camp
and the fully permitted, 100% owned "Sandon Mining Complex". The Company owns
the past-producing Silvana, Wonderful, and Hinckley Mines and several other
properties with significant exploration potential.
For additional information please visit the company website www.klondikesilver.com.
On Behalf of the Board of Directors
Klondike Silver Corp.
Richard Hughes, President and Director
Cautionary note:
This report contains forward looking statements. Resource estimates, unless
specifically noted, are considered speculative. Any and all other resource or
reserve estimates are historical in nature, and should not be relied upon. The
production rate and mine-life projections have been made without support of a
feasibility study, there is no certainty the proposed operations will be
economically viable. By their nature, forward looking statements involve risk
and uncertainties because they relate to events and depend on factors that will
or may occur in the future. Actual results may vary depending upon exploration
activities, industry production, commodity demand and pricing, currency exchange
rates, and, but not limited to, general economic factors. Cautionary Note to US
investors: The U.S. Securities and Exchange Commission specifically prohibits
the use of certain terms, such as "reserves" unless such figures are based upon
actual production or formation tests and can be shown to be economically and
legally producible under existing economic and operating conditions.
FOR FURTHER INFORMATION PLEASE CONTACT:
Klondike Silver Corp.
Mark Luchinski
Corporate Inquiries
(604) 685-2222
(604) 685-3764 (FAX)
mark.luchinski@klondikesilver.com
Klondike Silver Corp.
Alan Campbell
(604) 685-2222
(604) 685-3764 (FAX)
acampbell@klondikesilver.com
www.klondikesilver.com
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