COLORADO RESOURCES LTD. (TSX VENTURE:CXO) ("Colorado" or the "Company") announces it has entered into a purchase agreement, (the "Agreement") with Kaizen Discovery Inc. ("Kaizen") (TSX VENTURE:KZD) to acquire a 100% interest in the Castle gold-silver-copper property (the "Castle Property")
The Castle Property is located 25 km northwest of Imperial Metals Red Chris1 mine development and within a district which hosts several significant gold-copper mines1 and occurrences including Red Chris, North Rok3, GJ1, Quash1, Saddle1, and Spectrum1, (see Figure 1). The Castle property is also surrounded on three sides by Colorado's Kinaskan property.
Previous work at the Castle2 focused on the western side of the property and included the completion of 21 diamond drillholes (4,805 m) between 1988 and 2013.
The mineralization at Castle is associated with an east-west striking structural and intrusive corridor that is spatially related to a 150 m x 1500 m long copper and gold soil anomaly, a coincident magnetic anomaly and an IP chargeability high.
Gold - copper mineralization noted to date includes both broad porphyry style and higher grade vein styles, such as:
- DDH CA 13-01 with 274 m of 0.102% Cu and 0.283 g/t Au
- DDH CA 13 - 03 with 4 m of 2.14% Cu, 4.88 g/t Au, and 73.2 g/t Ag contained within a 174 m interval of 0.106% Cu and 0.466 g/t Au4
The historic data2 suggests that the gold-copper mineralization at the Castle is open, and potentially strengthening, to the east, over a distance of 4.4 km to the property boundary towards the GT Gold1, Saddle Zone discovery. This area has seen the lowest density of historical drill testing.
Adam Travis, Colorado President and CEO states, "We are pleased to have Kaizen as a shareholder and to have the opportunity to advance the already significant historical results at the Castle Property. We believe that our technical team, with their extensive experience in this belt, and in particular with the successful North Rok porphyry copper-gold project, is strongly positioned to rapidly advance the Castle Property during the 2017 field season."
Under the terms of the agreement, Colorado may acquire a 100% interest in the property, subject to a 2% percent NSR to the underlying original vendor (the "Original Vendor NSR") for the following consideration:
- 1,000, 000 units of Colorado ("Consideration Units") to be issued to Kaizen within 5 days of the TSX Venture Exchange ("Exchange") approval. Each Consideration Unit will consist of one common share and one common share purchase warrant (a "Warrant"). Each Warrant will entitle Kaizen to purchase a further common share at a purchase price of $0.60 per share for a period of 24 months.
The Company has the option to purchase the Original Vendor NSR for CDN$4,000,000. The Consideration Shares issued in connection with the agreement will be subject to a four month hold period. The Agreement remains subject to regulatory approval.
Dr. Jim Oliver, Ph.D, P. Geo., the Company's Chief Geoscientist, is the Qualified Person as defined by National Instrument 43-101 who reviewed the preparation of the technical data in this news release.