Colombian Mines Corporation is pleased to announce all parties have signed the definitive agreement (the "Agreement") whereby the Company has the exclusive right to acquire a 100% undivided interest in the high grade Pamlico gold project in Nevada. Pamlico is a historic high grade producer with recent drill intercepts to 239.15 g/T Au over 4.6 meters, and is permitted for pilot mining and processing of bulk samples via a modern "trackless" decline completed in 2013.
Colombian Mines has the exclusive option to purchase an undivided 100% interest in the property subject to a 4% Net Smelter Return (NSR) royalty. The Agreement provides for an initial "Option" to purchase the property for US$ 7 million or an "Early Exercise Option" of US$ 4 million if exercised and paid within four (4) years.
The Company has the option to "buy down" 3 percentage (3%) points of the royalty for US$ 1 million per point, or US$ 3 million total at any time during the agreement. During the option period the Company will pay US$ 250,000 per year as pre-production cash payments. The cumulative value of all payments, including Pre-Production Cash Payments, Annual Payments and Production Royalties, to Merritt apply to the final purchase price.
The Company plans an aggressive exploration and development program this fall once funding is in place.
Located 12 miles southeast of Hawthorne, Nevada the project has excellent access and infrastructure, a mild, year-round operating climate and strong political support from Mineral County, one of the most pro-mining counties in the pro-mining state of Nevada. Situated along the Walker Lane, one of Nevada's largest and most productive gold trends, Pamlico is comprised of 116 unpatented lode mining claims covering the historic Pamlico group of mines, as well as the surrounding Good Hope, Central, Gold Bar and Sunset mines.
Discovered circa 1884 the district rapidly gained a reputation as being one of Nevada's highest grade districts. Owned by private interests for most of its history, the property is under-explored in terms of modern exploration. There are no documented geophysical or soil geochemical surveys, inconsistent rock geochemistry and inconsistent surface and underground geologic mapping. To date only limited drilling consisting of 103 drill holes totaling 27,838 feet (8,487 meters) have been completed. Despite the extremely high success rate in drilling, multiple holes ended in mineralization assaying from 4.5 to 13.2 g/T Au. High grade mineralization remains open to expansion within the current drilling pattern as well as up and down dip, and along strike.
In 2013, the seller permitted and completed a modern, trackless 188 meter long, 3 X 4 meter decline to develop high grade mineralization identified in their drilling. While driving the decline, two previously unknown mineralized zones containing visible gold were discovered. One of these zones is termed the Discovery zone, the other remaining unnamed for the time being. To date neither of these zones have been systematically sampled.
More than 100 veins on the property have had historic artisanal level production from shallow underground workings. Mineralization is deeply oxidized and dominated by coarse, free gold that is easily recoverable by gravity methods. Individual productive veins with similar strikes and dips often form discrete zones where veins in the zone have similar characteristics. These vein zones often exhibit characteristics of strike and dip such that when projected along strike or down dip would intersect other zones of veins. It is well known structural intersections often form highly favorable geological environments for the development of larger volume, high grade targets in settings resembling other high grade Nevada deposits like the Fire Creek and Midas Mines operated by Klondex Mines Ltd.
The table below presents select high grade drill intercepts previously announced by the Company. This table is not exhaustive, and complete listing of high grade intercepts is available at the Company's web site at www.colombianmines.com.
Select Pamlico Drill Intercepts
Note: Intercepts are average of all samples in drilled intercept with no grade capping.
All intercepts are actual drilled length and do not imply true width
The Company utilizes certain conventions to avoid confusion between metric and imperial units in its press releases. Metric tons or tonnes consisting of 1,000 kilograms (2,200 pounds) are denoted with a capital "T" while imperial tons consisting of 2,000 pounds (907 kilograms) are denoted with a small "t".
Reno Evening Gazette, April 20, 1886
Quality Assurance/Quality Control
Mr. Robert G. Carrington, P. Geo, a Qualified Person as defined by National Instrument 43-101, the President and CEO of the Company, has reviewed, verified, and approved for disclosure the technical information contained in this news release. Mr. Carrington has reviewed the historic data and is of the opinion that the samples were collected in accordance with accepted industry best practices, that acceptable levels of QA/QC were maintained by the historic operators, and that the drilling and assay results are reliable and relevant.
References to historic production records from the property do not imply that similar mineralization may be discovered in the future.