Mr. Dan Omeniuk reports
MX GOLD CORP. PROVIDES UPDATE ON MAGISTRAL JOINT VENTURE
Further to its news release dated Oct. 25, 2016, regarding the entry into a binding agreement to acquire a 50-per-cent interest in the Magistral Del Oro tailings project, MX Gold Corp. paid the second instalment of $750,000 (U.S.) to the owner of the project as required by the agreement. Pursuant to an amendment agreement dated Nov. 22, 2016, the parties have also expressed their intention to negotiate in good faith and enter into a definitive agreement in the near future.
The company's remaining payments consist of a $750,000 (U.S.) payment on or prior to Dec. 20, 2016, and a final payment of $750,000 (U.S.) on or prior to Jan. 19, 2017, following which the company will earn a 50-per-cent participating ownership interest and a 45-per-cent net profit participating interest in the project.
The project includes a fully permitted, 500-tonne-per-day dynamic cyanide countercurrent system plant constructed in 2013 at a cost of approximately $4.5-million, which appears to be in excellent condition. The plant is unencumbered, and it is estimated that the plant can be fully operational within four to six months. Additionally, the Magistral project includes the exclusive rights to process the mineralized mill tailings.
About the Magistral project mineralized tailings project
A historical estimate was completed by Corporation Ambiental de Mexico SA de CV on Jan. 20, 2012, titled "Perforacion y Muestreo en Presa de Jaleas Estimation Volumetrica, Tonelaje y Ley Promedio." The CM report estimated a probable reserve of 1.25 million tonnes averaging 2.06 grams per tonne gold. The assumptions for this estimate were based on 58 auger samples, 2.45 metres to three metres in length from 24 drill holes. There has been no additional work on the tailings project since Jan. 20, 2012, to upgrade or verify the historical estimate.
The CM report does not comply with National Instrument 43-101, and MX Gold believes that a qualified person has not done sufficient work to classify the historical estimate as a current mineral resource or reserve, and is not treating the historical estimate as a current mineral resource or reserve. The company has initiated a data verification program with additional geochemical studies by trenching of the tailings project. Initial results appear to be confirming historical grade estimates.
The technical information in this news release has been reviewed and approved by Lorne Warner, PGeo, and a qualified person as defined by National Instrument 43-101.
About MX Gold
MX Gold is a junior mining company focused on the exploration, development and mining of advanced projects located in British Columbia and Mexico.
The company's primary focus in British Columbia is its high-grade Willa gold and copper project located 12 kilometres south of Silverton, B.C. In 2015, MX Gold completed the accretive acquisition of the Willa project, and the Max molybdenum mine and mill complex.
Located in Mexico, MX Gold's new Magistral Del Oro project is located 392 kilometres southwest of Chihuahua City.
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