Ms. Tara Christie reports
BANYAN GOLD TO ACQUIRE OPTIONS FOR MCQUESTEN AND AUREX GOLD PROPERTIES, YUKON & CONSOLIDATING THE DISTRICT
Banyan Gold Corp. has signed letters of intent for option agreements to acquire up to 100 per cent of the Aurex property from Victoria Gold Corp. and up to 100 per cent of the McQuesten property from Alexco Resource Corp. The Aurex and McQuesten gold properties are contiguous, comprising 8,230 hectares and 1,000 hectares, respectively, and are both highly prospective for intrusive-related gold mineralization and include areas of historic gold production (lode and placer), in the prolific Mayo mining district, Yukon territory.
These combined properties form a contiguous, approximately 9,230-hectare claim group providing a unique opportunity to combine a substantial amount of historic exploration data to generate a consolidated exploration target model across a previously independently explored project boundary.
Tara Christie, chief executive officer and president, commented: "With these options, Banyan will be the first company to consolidate ownership of these highly prospective intrusive-related gold properties. Equally important is the support and strategic investments from Alexco and Victoria, two of Yukon's premier developers. These acquisitions fit within Banyan's corporate strategy to explore in mining friendly jurisdictions, with high mineral potential and in proximity to existing infrastructure."
The Mayo mining district is well known for over 100 years of advanced gold and silver mineral exploration and development, including the historic Keno Hill silver district (KHSD), now owned and operated by Alexco.
To the north of the combined properties, lies Victoria's Eagle project that hosts a National Instrument 43-101 reserve of 2.7 million ounces of gold and is set to be Yukon's next operating hardrock gold mine.
The consolidated property has excellent infrastructure. It is transected by the Silver Trail Highway, the main road connecting Mayo to Keno City, as well as being covered by a network of historic exploration access roads and trails. Additionally, an active three-phase power line runs through the property. An airstrip and full support services are available in Mayo, 35 kilometres to the south.
Banyan intends to initiate fieldwork on the Aurex-McQuesten properties in spring 2017.
Aurex-McQuesten property geology
The Aurex-McQuesten property represents a structurally controlled, intrusion-related gold-silver mineralized system. Narrow quartz monzonite dikes of the Tombstone intrusive suite have been identified on the property to date and geophysical interpretations hypothesize a buried intrusive underlies the project area. The property is predominantly underlain by a series of meta-sedimentary lithologies of the Yukon group of the Yusezyu formation, a part of the Hyland metasediments of probable Precambrian and/or Palaeozoic age. A northeast-striking system of faults and vein faults host the Keno Hill silver-lead-zinc veins and a later dominantly northwest-trending series of faults offsets the earlier east-west-trending low-angle thrust faults. All of the faults are interpreted to contribute to the localization of gold mineralization.
McQuesten property history and mineralization
The McQuesten property comprises 73 quartz mining claims with a long history of precious metals exploration and exploitation including over 11,000 metres of RC/RAB drilling (286 holes), over 4,900 m of diamond drilling from 47 holes, 35 trenches (3,900 m), over 350 soil samples and a 2006 detailed airborne EM-mag survey. Anomalous gold in soils, combined with drill results and detailed trenches, has defined a 1.6-kilometre by 1.3 km area of anomalous plus 0.5 gram per tonne gold. Drilling highlights in this area (located within 500 m of the Aurex claim boundary) include 18.3 m at 3.74 g/t Au and 1.1 m at 84.8 g/t Au.
The McQuesten property has gold-tungsten-tin mineralization defined in skarn horizons or adjacent to the narrow quartz monzonite intrusives of the Tombstone suite, similar to mineralogy at Victoria's Eagle project. The McQuesten property also has the potential for overlapping silver-lead-zinc vein-style mineralization characteristic of the KHSD.
The potential in the McQuesten area lies in expanding the size of the mineralized zones by further drill testing of skarn horizons along strike and in increasing the overall gold grade by definition of the higher-grade gold zones both within skarn and quartzite horizons. Indications of this potential have been demonstrated by widely spaced drilling in the West zone, where two gold-bearing skarn horizons proximal to later structures have returned significant results such as:
- 3.23 g/t Au over 21.3 m (RC97-03);
- 1.77 g/t Au over 35.3 m (RC97-02);
- 1.37 g/t Au over 36.6 m (MQ00-4);
- 3.31 g/t Au over 4.3 m (MQ00-4).
Similarly, in the East zone, drilling has returned significant intercepts from four skarn horizons:
- 4.10 g/t Au over 9.6 m (D83-01);
- 0.54 g/t Au over 14.0 m (D83-02);
- 4.10 g/t Au over 3.0 m (D83-04);
- 5.60 g/t Au over 3.0 m (D83-06);
- 1.51 g/t Au over 11.1 m (D83-06);
- 1.11 g/t Au over 33.0 m (RC97-06).
Aurex property history and mineralization
The Aurex property comprises 433 quartz mining claims and also has a long history of mineral exploration and exploitation with over 17,000 m of RC and diamond drilling in 477 drill holes, over 3,000 soil samples, as well as trenches and detailed geophysical surveys.
Early exploration of the Aurex property (circa 1900s) was focused exclusively on Keno Hill-type silver veins; gold mineralization on these claims was first reported in 1955.
Exploration during the 1990s included 3,089 m of percussion drilling in 148 holes and a 4.25-kilometre induced polarization (IP) geophysical survey. In 2000, Newmont Mining Corp. and Expatriate Resources Inc. initiated a multimillion-dollar exploration program of mapping, sampling and airborne geophysics over the Aurex property.
In 2003, StrataGold Corp. completed 4,038 m of diamond drilling in 26 holes with anomalous gold, arsenic, bismuth, antimony and tungsten reported from these exploration initiatives. In 2007, StrataGold collected 342 soil samples on the northeast portion of the claim block in an area of interest defined by anomalous silver values. In 2011 and 2016, Victoria completed additional soil sampling, prospecting and geologic mapping programs on the Corkery Creek target area.
Two distinct styles of gold mineralization have been identified on the property to date: 1) sheeted quartz arsenopyrite veinlets with associated brittle fault and vein breccias with anomalous gold, arsenic, bismuth and tungsten mineralization; and 2) stratabound silicified skarn horizons with anomalous gold, arsenic, bismuth, antimony and tungsten associations.
Significant intersections of sheeted-vein-style mineralization include 15.00 m of 1.51 g/t Au, including 7.50 m of 2.51 g/t Au and 19.17 m of 0.97 g/t Au. Significant intersections of sheeted stratabound silicified skarn horizons include 10.01 m of 0.74 g/t Au, including 1.01 m of 5.30 g/t Au. Mineralized structures and stratabound horizons remain open in all directions. A grab sample of quartz-sulphide vein material taken from the Corkery Creek target area in 2012 returned up to 26.8 g/t Au with 1.2 g/t silver, greater than 10,000 parts per million arsenic, 216 ppm antimony and 94 ppm bismuth. A grab sample of mineralized vein material from a dump alongside one of the old shafts reportedly assayed 22,320 g/t Ag. Specimens of massive sulphide and limonite-stained boulders returned up to 7.01 g/t Au, 267 g/t Ag and 8.46 per cent zinc.
Highlights from the 2003 StrataGold drill program are presented in the table.
STRATAGOLD DRILL PROGRAM HIGHLIGHTS
Drill hole From (m) To (m) Length (m) Gold (g/t)
AX-03-12 31.00 32.50 1.50 8.89
AX-03-12 37.00 52.00 15.00 1.51
Including 37.00 44.50 7.50 2.51
AX-03-16 117.70 136.87 19.17 0.97
AX-03-10 81.50 92.00 10.50 1.08
Including 89.00 90.50 1.50 4.61
AX-03-22 101.10 113.10 12.00 0.98
Including 103.20 104.70 1.50 4.63
AX-03-24 105.10 116.38 11.28 0.90
AX-03-08 184.96 194.97 10.01 0.73
Including 187.96 188.97 1.01 5.30
AX-03-09 75.5 113.00 37.50 0.51
Highlights of Aurex agreement with Victoria
Under the terms of the binding letter agreement with Victoria, which is subject to TSX Venture Exchange approval, Banyan may earn up to 100-per-cent interest in the Aurex property in three stages:
Initial 51-per-cent option interest -- To acquire the initial 51-per-cent option interest in the property, the company is required, over a period of four years, to issue in stages a total of three million common shares in the capital of the company and to incur in stages minimum exploration expenditures totalling $1.6-million on the property. Banyan will act as the property's operator during the initial four-year term and has the option to defer expenditures into a fifth year. Following the earning of the 51-per-cent option interest, a joint venture will be formed and Banyan will have the ability to elect to earn an additional 24 per cent.
- Additional 24-per-cent interest -- In order to earn the additional 24-per-cent interest, such that Banyan would have an aggregate interest of 75 per cent in the property, Banyan will be required to spend an additional $3.5-million in exploration expenditures over five years. Upon having earned the additional 24-per-cent interest, Banyan will continue to act as the property's operator and may elect to earn an additional 25 per cent.
Additional 25-per-cent interest -- In order to earn the additional 25-per-cent interest, such that Banyan would have an aggregate interest of 100 per cent in the property, within two years, Banyan must pay Victoria $2-million cash or shares and grant Victoria a 6-per-cent net smelter return royalty with buybacks totalling $7-million to reduce to a 1-per-cent NSR royalty on Au and a 3-per-cent NSR royalty on Ag.
As part of the agreement, Victoria will make a strategic investment in Banyan of $100,000. Victoria previously owned 8.0 per cent of Banyan outstanding shares and this investment will increase its percentage to 8.8 per cent.
Highlights of McQuesten agreement with Alexco
Under the terms of the McQuesten non-binding letter agreement with Alexco, it is intended that the parties will negotiate a binding agreement, which will be subject to the TSX Venture Exchange, government of Canada and Silver Wheaton Corp. approvals, under which Banyan may earn up to a 100-per-cent interest in the McQuesten property in three stages:
Initial 51-per-cent option interest -- To acquire the initial 51-per-cent option interest in the property, the company is required, over a period of four years, to issue in stages a total of 1.6 million common shares in the capital of the company and to incur in stages minimum exploration expenditures totalling $1.6-million on the property. Banyan will act as the property's operator during the initial four-year term and has the option to defer expenditures into a fifth year. Following the earning of the 51-per-cent option interest, a joint venture will be formed and Banyan will have the ability to elect to earn an additional 24 per cent.
Additional 24-per-cent interest -- In order to earn the additional 24-per-cent interest, such that Banyan would have an aggregate interest of 75 per cent in the property, within three years Banyan must spend an additional $1-million in exploration expenditures, deliver a preliminary economic assessment and pay Alexco $600,000 in cash or shares of Banyan. Upon having earned the additional 24-per-cent Interest, Banyan will continue to act as the property's operator and may elect to earn an additional 25 per cent.
Additional 25-per-cent interest -- In order to earn the additional 25-per-cent interest, such that Banyan would have an aggregate interest of 100 per cent in the property, within two years Banyan must pay Alexco $2-million in cash or shares, deliver a prefeasibility study and grant Alexco a 6-per-cent NSR royalty with buybacks totalling $7-million to reduce to a 1-per-cent NSR royalty on Au and a 3-per-cent NSR royalty on Ag.
Alexco will make a strategic investment of $350,000 in Banyan, will have the right to participate in future financings and have a right to a board seat as long as it maintains a minimum 10-per-cent equity ownership in Banyan. Because of such strategic investment, Alexco will have an initial 7.7-per-cent equity ownership in Banyan.
The definitive agreements with Alexco and Victoria are expected to be completed by May 1, 2017, and will require board approval and, in the case of Alexco, require the consent of Silver Wheaton and the government of Canada.
The technical information in this news release has been reviewed and approved by Paul D. Gray, PGeo, a qualified person as defined by National Instrument 43-101.
About Banyan Gold
Banyan is a gold exploration and development company whose flagship property, the Hyland gold project, is approximately 70 kilometres northeast of Watson Lake, Yukon, along the southeast end of the Tintina gold belt. The Main zone gold inferred resource, at a 0.6 g/t gold equivalent cut-off, hosts an NI 43-101 resource of 12,503,994 tonnes containing 361,692 ounces gold at 0.9 g/t and 2,248,948 ounces silver at 5.59 g/t for a combined gold and silver resouce of 396,468 ounces gold equivalent.
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