Comstock Metals Ltd. (“Comstock” or the "Company") and Select Sands Corp. ("Select Sands") are pleased to announce that they have entered into a definitive agreement (the "Agreement") setting forth the terms under which Comstock will purchase Select Sands' Preview SW gold project located in the La Ronge district of Saskatchewan and Select Sands' early-stage Old Cabin property in Ontario (together the "Assets"), each as previously disclosed in the press release dated May 16, 2016. Under the terms of the Agreement Comstock will acquire the Assets for 20 million common shares in the capital of Comstock and the assumption of certain liabilities associated with the Assets.
Preview SW Gold Project
The Preview SW gold project is located 40 km north of La Ronge, Saskatchewan and 80 km southwest of Silver Standard Resources Inc.'s Seabee gold mine. The Preview SW project database contains results from 162 core holes, totaling 26,250 m, drilled between 1985 and 2013. Of these, 136 were drilled on the main Preview SW deposit and form the basis for a NI 43-101 Resource Estimate1 (see Select Sands' October 1, 2013 News Release) that included:
- Indicated resources containing 158,300 ounces of gold (2.61 million tonnes grading 1.89 g/t Au) based on a 0.50 g/t Au cut-off grade.
- Inferred resources containing 270,800 ounces of gold (5.70 million tonnes grading 1.48 g/t Au) based on a 0.50 g/t Au cut-off grade.
The main Preview SW deposit is comprised of several sub-parallel northeast-trending gold-bearing quartz-sulphide mineralized structural zones, 500 m in strike length and totalling 150 m in width. Preliminary metallurgical test work indicates total gold recovery in concentrates ranged from 90% to 93% (see Select Sands' June 3, 2013 News Release).
In addition, there are six additional known gold zones on the 853 ha property with only limited drilling. At the Preview North zone, located 2.6 km northeast of the Preview SW deposit, drill hole PR13-163 (see Select Sands' April 8, 2013 News Release) intersected:
- 17.98 g/t Au over 5.71 m starting at 10 m below surface;
- 5.96 g/t Au over 5.66 m starting at 19 m below surface; and,
- 1.88 g/t Au over 21.26 m starting at 29 m below surface
There has been insufficient drilling at the Preview North zone to determine the attitude of the reported mineralized intervals and, therefore, the above mineralized intersections may not represent true widths. No drilling has been carried out for over 600 m to the south of this hole.
The Company confirms that it will file a technical report on the Preview SW Gold Property within 180 days of this press release to support the above disclosed SW deposit mineral resource estimate. For more details about the project please visit: http://www.selectsandscorp.com/projects/sk-gold-project/.
Old Cabin Project
The 1,118 ha Old Cabin project is located 80 km northeast of Wawa, Ontario and 10 km east of Richmont Mines’ Island Gold Mine, which is forecast to produce 62-67,000 oz of gold in 20162. It should be noted that the mineralization hosted on the Richmont Property is not necessarily similar to the mineralization hosted on the Old Cabin Property. The property has had surface sampling and geological mapping carried out, resulting in the discovery of 13 discrete gold zones, all associated with shear zones and strong iron carbonate alteration. Highlights of results reported by Select Sands include a channel sample of 40.5 g/t Au over 1.68 m.
The completion of the transaction is subject to a number of conditions including receipt of all necessary regulatory approvals (including the approval of the TSX Venture Exchange).
Given that Comstock and Select Sands have certain directors that serve as directors of both Comstock and Select Sands, each board appointed independent committees to review the proposed transaction. Furthermore each committee received independent fairness opinions confirming that the transaction is fair from a financial perspective to the shareholders of each of Comstock and Select Sands.
As noted above this transaction remains subject to a number of conditions and there can be no assurances that the proposed transaction will be completed as proposed or at all.
Further details regarding the Preview SW gold project can be found in Select Sands' press releases dated May 16, 2016 and March 17, 2016.
1 This resource estimate was conducted by GeoSim Services Inc. Ronald G. Simpson, P. Geo., of GeoSim, is the Qualified Person as defined under National Instrument 43-101 responsible for the resource estimates. Mineral resources have been classified using the definitions set out in CIM (2010). Mineral resources have an effective date of August 31, 2013. A copy of the report is available on Select Sands website at http://www.selectsandscorp.com/wp-content/uploads/2016/03/LaRonge43-101.pdf
2 see www.richmont-mines.com