Sphere Resources Inc. has entered into an Option and Mining Claims Acquisition Agreement of the "Ziggurat" prospect in Nevada's prolific Round Mountain-Northumberland Gold Trend with Spartan Gold Ltd (OTCBB:SPAG).
Sphere Resources Inc. NEX Board of the TSX Venture Exchange (TSX VENTURE:SPH.H) is pleased to make the following announcement:
As announced on December 22, 2010; the Company entered into a JV agreement to acquire mining claims at Poker Flats located within the Carlin Mining District in Elko County, Nevada. Further to that announcement the Company has signed an Option and Mining Claims Acquisition Agreement with Mexivada Mining Corporation being the optionor ("Mexivada") and Spartan Gold Ltd being the optionee ("Spartan") for the Ziggurat gold concessions (the "Property") located in the Round Mountain-Northumberland Mining District, northern Nye County, Nevada.
This agreement enables the Company, along with its joint venture partner Spartan to acquire an equally shared 70% interest in the Ziggurat gold concession in Nevada's world renowned Round Mountain-Northumberland Trend, home to the +15,000,000 ounce Round Mountain gold mine of Kinross and Barrick Gold, and Fronteer Gold's +3,000,000 ounce Northumberland Mine. Under the terms of the agreement, Spartan is responsible for financing of the first stage exploration activities at Ziggurat. The Company will assume the responsibility to complete the mining feasibility study for the project upon completion of the exploration program.
Specifically, the Company and Spartan can earn a 70% interest in the Property by fulfilling the following commitments.
Spartan paying $25,000 in cash to Mexivada on signing (paid), and additional amounts in subsequent years
The Company shall allot and issue to Mexivada, fully paid and non-assessable Shares as follows:
300,000 common shares of the Company within 60 days of the execution of the Agreement; and
400,000 common shares of the Company within 60 days of Spartan acquiring a 51% interest in the Property.
It is understood and agreed between Spartan and the Company that Spartan shall be responsible for and pay
A payment of $25,000 in cash on signing (paid), and $35,000 in cash before March 27, 2011, and $25,000 on or before the before the second anniversary date of this Agreement, and US $25,000 on or before the third anniversary date of this Agreement; and
Investing a sum of $1,500,000 into the property in exploration and development expenditures (inclusive of assessment work) over a 36 month period from the Effective Date.
Spartan can earn an additional nineteen percent (19%) interest in the property, for a total of 70%, upon incurring additional exploration expenditures of US $1,000,000 and by also completing and delivering to Mexivada an Industry-standard Mining Feasibility Study (not necessarily "bankable") on or before the fifth anniversary date of this Agreement. The additional exploration expenditure of US$1,000,000 and the cost of the Mining Feasibility Study are to be incurred and paid for by the Company.
Title to the seventy percent (70%) interest in the Property shall vest in Spartan.
Upon exercise of the Option and acquisition of the 70% interest in the Property, the Company and Spartan shall enter into a joint venture agreement whereby each party is an equal partner with a thirty-five percent (35%) interest in the Property.
The joint venture agreement between the Company and Spartan shall provide for a four person technical committee with equal representation from each party to the agreement. The technical committee shall meet at least twice per year and will be responsible for setting annual exploration and development program goals and expenditures.
Ziggurat Gold Property
The Ziggurat gold property is located approximately 20 kilometers north of Round Mountain, Nevada and comprises one contiguous block containing 57 unpatented lode mining claims, covering approximately 1,140 acres. All of the claims are within the Round Mountain-Northumberland Mining District in Nye 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 Ziggurat 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 Round Mountain (Kinross-Barrick), Gold Hill (Kinross-Barrick), and Northumberland (Fronteer Gold) gold mines. The previous geophysical and geological interpretations indicate that the Ziggurat property has favorable characteristics for potentially open pittable Carlin-style gold mineralization.
Additional drilling, geophysical and geological work is planned under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditure.
The exploration goal at the Ziggurat prospect is to identify a plus 1,000,000 ounce open-pittable gold mining resource. Major mining projects are currently operated by Barrick Gold Corporation (trading on the NYSE and the TSX) and Fronteer Gold (trading on the ASE) which exist both south and north of the Ziggurat prospect, respectively.
Malcolm Stevens, Executive Chairman and President of Sphere commented, "The Ziggurat agreement is a quantum leap for the Company in Nevada and underscores the strategy set by the Board to become a major explorer for gold in the two richest gold camps in North America. The success in implementing the Company's strategy has been the identification of appropriate partners who have the desire to locate major gold resources in Nevada. Having two projects in the same gold province allows economies of scale while enhancing the opportunity for gold discovery."
Bill Whitmore, the President of Spartan Gold Ltd. said, "Spartan Gold, is pleased to add another stellar project to the list of completed acquisitions in Nevada. We have great partners in this prospect with Sphere Resources and Mexivada". He continued, "We all recognize the potential of working a region with some of the largest gold mining companies operating productive projects right in the neighborhood. We all look forward to working in a collective manner to locate sufficient gold targets to bring this property to an operational drill ready status as quickly as possible".
Mr. Richard Redfern, CEO and President of Mexivada stated: "We are extremely pleased to be pursuing the historic and prolific Round Mountain-Northumberland gold trend with an extremely talented technical team working on the Property. We feel very confident in Spartan Gold's ability to explore and prepare the Ziggurat property to drill ready status and to have Sphere Resources guiding the completion of required formal studies to validate the prospect".
Source: Sphere Resources Inc.