Taku Gold Corp. (the "Company") and Argentium Resources Inc. ("Argentium") are pleased to announce that they have signed a binding Letter of Intent ("LOI) to form a joint venture for the purpose of exploring and developing Argentium's 17-claim Sill Lake property located in Van Koughnet Township about 30 km north of Sault Saint, Marie, Ontario.
Argentium will grant Taku the exclusive right to earn a 50% interest in the Sill Lake property in consideration of the issuance of 10 million (10,000,000) common shares in the capital of Taku and $700,000 in expenditures on the Sill Lake property to be incurred by Taku. Share issuances and expenditures will be made in accordance with schedules and programs which have been approved by both companies. The terms of the transaction are summarized in the following schedule:
- 3,000,000 common shares upon closing;
- 3,000,000 common shares and $300,000 expenditures on or before the first anniversary of closing;
- 4,000,000 common shares and $400,000 expenditures on or before the second anniversary of closing;
- Taku will have the further right to earn an additional 10% interest in the property by completing a Feasibility Report on the property before the third anniversary of closing; and
- Taku and Argentium will form a joint venture for further development of the Sill Lake property funded according to their respective interests.
In addition, Taku has paid a $50,000 deposit to Argentium as part of the execution of the LOI. Argentium has undertaken to complete a National Instrument 43-101 compliant report prior to June 30, 2013, failing which it shall return the deposit to Taku. The LOI is contingent on the execution and delivery of the Formal Agreements by June 30, 2013, and obtaining of all regulatory and other approvals as may be required to complete the transactions contemplated by the LOI.
History of the Sill Lake Property
Exploration work on the property is documented as early as 1890. Modern exploration started in 1972 with an initial drill program completed by the Tribag Mining Company under an option agreement with Teck Mining Group Ltd. Work continued from 1973 to 1986 with surface and underground exploration, mining and milling. A number of shipments totalling an estimated 7,000 tons of ore were reported during this period consisting of handpicked ore and milled concentrate. Up to the end of 1986, 32 holes (12,294 feet) of drilling and underground workings consisting of a ramp, spiral decline and a 500 foot drift had outlined a mineralized structure over a length of 2,800 feet to a depth below surface of 200 feet. From 1986 to 2007, the property saw limited surface exploration. In 2008, the property was acquired by Gilead Minerals Corp. and RX Exploration Inc. A 13-hole drill program was completed that year as well as underground dewatering and sampling. In 2012, Argentium reported high-grade silver results up to 7,621 grams per tonne silver (Argentium Press Release - May 2, 2012) and reported positive results for low alpha lead potential (Argentium Press Release - May 3, 2012). The potential of the lead to be low alpha is very encouraging as this category of lead sells at a substantial premium compared to ordinary lead. Currently, the market value of standard lead is $0.916 US a pound whereas low Alpha lead can range in value from $25 to over $100 CAD per pound.