Probe Metals Inc. (TSX VENTURE:PRB) ("Probe" or the "Company") is pleased to announce that it has entered into a binding option agreement with Alexandria Minerals Corporation ("Alexandria"), whereby Probe may earn up to a 70% interest in the Cadillac Break East Property (the "Property"), located 25 km east-southeast of Val-d'Or, Québec. The Property is comprised of 232 mining claims totaling approximately 72 square kilometres and will be part of the Company's Val-d'Or East Project ("Val-d'Or East").
David Palmer, President & CEO of Probe Mines states "This transaction forms part of our Val-d'Or East consolidation strategy, designed to acquire highly prospective ground in what we see as an under-explored part of one of Canada's premier gold mining camps. In addition to the property hosting over 300,00 ounces of gold, we have also strengthened our exploration potential with over 14 kilometres of strike length along the prolific Cadillac Lake Break, a structure responsible for over 20 million ounces of gold production in Quebec. We are very pleased to be working with an established Val-d'Or exploration company like Alexandria, who's experience and knowledge of the area will be invaluable in advancing our exploration programs and unlocking value for both companies. We look forward to starting work on the property as soon as possible."
"Figure 1 - Val-d'Or East Project" is available at the following address: http://media3.marketwire.com/docs/Fig1_1078572e.jpg
The highlights of the agreement are as follows:
- Probe will issue 300,000 common shares to Alexandria;
- Probe may earn a 60% interest (the "First Option") in the Property by spending an aggregate of $5,000,000 on exploration expenditures over 4 years;
- Upon completion of the earn-in requirement, a joint venture will be formed with Probe holding a 60% joint venture interest and Alexandria owning a 40% joint venture interest.
- Probe may earn an additional 10% (total of 70%) interest in the Property by completing a pre-feasibility study, incurring an additional $2,000,000 in exploration expenditure and issuing 200,000 common shares to Alexandria on completion of the 70% earn-in requirement.
- Thereafter, each party will be required to contribute to any further programs pro rata according to its joint venture interest. Should a joint venture party fail to make any of its required program contributions, its interest will be diluted accordingly. If a party's joint venture interest is diluted below 10%, its joint venture interest will be converted to a 2% NSR.
Probe will be the operator of exploration programs on the Property.
About the Cadillac Break East Property:
The property is relatively underexplored and, although little detail is known of the subsurface geology, it is generally recognized that the geological environment shows potential for both gold and base metals. The property is underlain by mafic to felsic volcanic rocks and related sills of the Malartic Group, underlying the north half of the property, in contact with sedimentary rocks of the Pontiac Group, to the south. The contact between the two geologic terrains is the Cadillac Break Shear Zone, a major geologic fault zone that controls the location of gold deposits over a distance of 300 kilometers in Quebec and Ontario.
Located along the north edge of the property is the Sleepy gold project, which hosts a Current Resource of 1,855,300 t @ 5.1 g/t gold, for a total of 307,350 oz. gold, uncapped (see Alexandria Minerals Press Release, October 22, 2014). The gold resources occur as disseminated gold-pyrite mineralization hosted in the Vicour Sill, a differentiated, 7 km long gabbro-diorite sill.
Beyond the Sleepy project boundaries, past exploration work since the 1920's has consisted of regional and early stage exploration programs. These include airborne geophysical surveys, principally magnetic, VLF and electromagnetic (EM) surveys, as well as local surface magnetic, EM, and Induced Polarization surveys. The property has also been the subject of overburden drilling campaigns, local soil geochemistry surveys and prospecting. Bedrock drill campaigns have generally been small in number and size, ranging from single holes to six holes at any given time.
Due to the relatively limited amount of bedrock drilling, gold and base metal prospects are widely scattered. Mineralization intersected in surface prospects and drill holes include copper and zinc sulfides, massive pyrite layers, and gold-quartz-tourmaline-pyrite veins.
The agreement is subject to the TSX Venture Exchange approval.
The technical content of this press release has been reviewed by Mr. Marco Gagnon, P.Geo, who is a "Qualified Person" within the meaning of NI 43-101, and Executive Vice-President and a director of Probe.