Posted in | Gold | Mining Business

Mexivada Mining, Spartan Gold Sign Agreement to Option 70% Interest in Poker Flats Property

Mexivada Mining Corp. (MNV.TSX-V) has announced the signing of an option to purchase 70% of the Poker Flats property.

Mexivada has entered into an Agreement with Spartan Gold Ltd (OTCBB: SPAG, "Spartan"), a U.S. based junior gold exploration company and with Sphere Resources Inc. ("Sphere") on the NEX Board of the TSX Venture Exchange (NEX - SPH.H, collectively "Optionee") to option an equally shared 70% interest in the Poker Flats gold concession in Nevada's world renowned Carlin Trend to Spartan and Sphere. Under the terms of the agreement, Spartan Gold is responsible for financing of the first stage exploration activities at Poker Flats.  Sphere will assume the responsibility to complete a mining feasibility study for the project upon completion of the exploration program.

Poker Flats Gold Property

The Poker Flats properties are located approximately 20 miles south-southwest of Elko, Nevada, and comprise two non-contiguous blocks containing 25 unpatented lode mining claims, covering approximately 500 acres. All of the claims are within the Carlin-Rain Mining District in Elko County. The property has a National Instrument (NI) 43-101 technical report prepared by a Competent Person. According to the NI 43-101 technical report, the exploration focus at Poker Flats will be on Carlin-type mineralization, which typically occurs as finely dispersed sub-micron gold and some silver. The properties are in the vicinity of the large Rain Mine (Newmont), and the Emigrant Springs (Newmont) and Railroad-Pinyon (Gold Standard Ventures) gold properties. The previous geophysical and geological interpretations and past drilling indicate that the Poker Flats property has favorable characteristics for Carlin-type mineralization. Gold Standard Ventures has been actively drilling the Railroad property, located 3 kilometers southwest of Poker Flats, as reported in Thom Calandra's "Ticker Trax" newsletter. Gold Standard reported intersecting highly significant gold assay values in its most recent drilling at Railroad, well in excess of the average gold grade reported by Newmont for the Emigrant Springs gold deposit. Newmont is awaiting a BLM decision to construct and start up an operating open pit heap leach gold mine at Emigrant Springs, which adjoins Poker Flats on the north, along strike.

Additional drilling, geophysical and geological work is planned at Poker Flats by Spartan under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Pinyon and Railroad, and the mineralized host rocks appear similar to those at Newmont's Rain Mine and at the Railroad deposit, additional exploration expenditures are justified for the Poker Flats property.

Optionee can earn an 51% interest in Poker Flats (the "Property") by compensating Mexivada in 1) a payment of $25,000 in cash on signing (paid), and 2) issue to Mexivada a) 200,000 common shares of Sphere within 60 days of the Effective Date of December 20, 2010, and b) investing a sum of $500,000 into the property in exploration and development expenditures (inclusive of assessment work) over a 36 month period from the Effective Date. Optionee must issue 300,000 common shares of Sphere Resources Inc. to Mexivada within 60 days of its earning a 51 percent interest in the property.

Optionee can earn an additional nineteen percent (19%) interest in the property, for a total of 70%, upon incurring additional Exploration Expenditures of US $250,000 and by also completing and delivering to Optionor an Industry-standard Mining Feasibility Study (not necessarily "bankable") on or before the fifth anniversary date of this Agreement, such additional expenditures and Mining Feasibility Study to be incurred and paid for by Sphere.

Upon commercial mine production, Mexivada and Optionee also will pay their respective portions of a three percent (3%) net smelter returns royalty to the original vendor of the mining claims (Redfern) appurtenant to this agreement, and part or all of this NSR may be purchased from the vendor at any time for $1,000,000 per percentage point of the royalty. A joint venture will be negotiated between Mexivada and Optionee for additional work on this claim. Upon Optionee earning its 70% interest in the property, Mexivada and its joint venture partner are required to contribute their proportionate share of costs of future exploration and development.

The proposed transaction remains subject to, among other things, receipt of all requisite Regulatory and other approvals, including the approval of the NEX board of the TSX Venture Exchange. A finder's fee is payable by Optionee in regards to this transaction.

Mr. Richard Redfern, President and CEO of Mexivada commented: "We are extremely pleased to be pursuing the historic and prolific Carlin gold mining camp with an extremely talented technical team working on the Property. We feel very confident in Spartan Gold's ability to explore and prepare the property to drill ready status and to have Sphere Resources guiding the completion of required formal studies to validate the prospect".

Bill Whitmore, the President of Spartan Gold Ltd. commented, "What is exciting for our team at Spartan Gold, is being able to take the lead operationally on a world class project with great partners and fantastic potential" He went on to say, "We recognized from the beginning that all the parties involved with the Poker Flats prospect bring a tremendous amount of knowledge and experience in the mining industry. This provides a great recipe for a successful exploration endeavor every step of the way to the benefit of all the shareholders of our respective companies."

Malcolm Stevens, Chairman and President of the Company commented, "The Poker Flats agreement enables the Company to explore and potentially mine a concession surrounded by both lucrative producing mines and industry leaders.  The existing data on The Poker Flats prospect is extremely encouraging because the mineralization is consistent with the producing adjacent properties."

Source: Mexivada Mining Corp.

Tell Us What You Think

Do you have a review, update or anything you would like to add to this news story?

Leave your feedback
Submit