Mr. Jeffrey Wilson reports

PRECIPITATE SIGNS OPTION TO ACQUIRE 100% OF HIGH GRADE ZINC PROPERTY IN BRITISH COLUMBIA

Precipitate Gold Corp. has reached an option agreement whereby it can acquire a 100-per-cent interest in the Island Zinc zinc-lead-silver project located near Port Hardy, north Vancouver Island, British Columbia.

Island Zinc project highlights

The Island Zinc project is a high-grade zinc-lead-silver carbonate replacement target hosting historical workings (including a collapsed inclined adit and two shallow shafts) centred on surface exposures of large and lengthy bands of sphalerite-galena mineralization. Work by previous operators includes sampling, mapping, trenching, surface blasting, geophysics, shallow-depth diamond drilling and small-scale subsurface mining. Select highlight results reported by prior operators and recent Precipitate rock samples include:

• Select rock grab samples assay up to 12.3 per cent zinc, 9.4 per cent lead and 932 grams per tonne (g/t) silver (Precipitate, 2017);
• Rock chip channel sample: 2.1 metres at 3.9 per cent zinc, 2.5 per cent lead and 744 g/t silver (1989);
• Drill hole NL66-19: 8.8 metres at 5.6 per cent zinc, 2.8 per cent lead and 178 g/t silver from 13.4-metre depth;
• Drill hole NL66-20: 5.5 metres at 7.3 per cent zinc, 6.9 per cent lead and 370 g/t silver from 17.4-metre depth.

The project is located in northern Vancouver Island, British Columbia, approximately 20 kilometres west of the Pacific Ocean port community of Port Hardy. Access to the property is via a high-quality, all-season gravel road and a number of subsidiary access roads that have facilitated a few generations of logging. The reclaimed Island copper porphyry deposit mine site is 25 kilometres to the southeast.

Jeffrey Wilson, company president and chief executive officer, stated: "As we ramp up activities at our flagship asset in the Dominican Republic, we're pleased with the opportunity to complement our project portfolio with a new acquisition. The right to acquire 100 per cent of the Island Zinc property expands our project portfolio with a prospective new high-grade base metal project in another jurisdiction with year-round exploration access, simple and inexpensive logistics, and favourable mining and taxation policies. This, combined with the agreement's manageable acquisition terms, allows Precipitate the opportunity to efficiently advance the Island Zinc project to a drill-decision stage. Management believes this acquisition represents another example of our commitment to grow the company through project opportunities that can add and maximize shareholder value."

Historical project records note widespread replacement-style mineralization showings within the host exploration target limestone over a strike distance of 800 metres, representing only a portion of the estimated 3,000 metres of mapped host limestone bisecting the property. Most prior work focused on the impressive surface showings of massive (up to two metres wide) banded sphalerite and galena at the Main historical showing. However, there is unexplored potential, particularly along strike (east to west) and downdip (to the south), where prospective mineralization may be masked by either glacial till or relatively thin layers of overlying volcanic rocks. These peripheral areas have never been explored by modern methods.

Precipitate's initial priority is to complete a detailed geophysical gravity survey over much of the property to identify any potential large and dense sphalerite-galena mineral bodies within the host limestone rocks near, distal or downdip from known mineral surface occurrences. Selective ground geophysical magnetic surveying will follow the gravity work as a means to identify drill worthy targets with combined non-magnetic and gravity positive signature. Results of this work will be reported on as they are completed and interpreted.

Option agreement terms

Precipitate has an option to earn a 100-per-cent interest in the property, comprising seven mineral tenures (675 hectares), by completing staged payments of cash and shares totalling $95,000, 250,000 Precipitate common shares and incurring an aggregate of $275,000 of work expenditures on the property over a four-year term (see attached table).

 
                                             Cash payment    Shares issued     Work commitment
    
On signing agreement                              $10,000              Nil            Nil paid
At or before first signing anniversary            $15,000           25,000             $50,000    
At or before second anniversary                   $20,000           50,000             $50,000    
At or before third anniversary                    $25,000           75,000             $50,000    
At or before fourth anniversary                   $25,000          100,000             $50,000 

A 2-per-cent net smelter return royalty is payable to the vendor. Precipitate may purchase one-half (1 per cent) of the NSR royalty at any time for a purchase price of $500,000, and may purchase the remaining one-half (1 per cent) for $1-million.

Island Zinc exploration history

Island Zinc was first explored in the 1930s by American Smelting and Refining, whose work included various surface explorations, two short 10-metre deep inclined shafts and a 34-metre-long adit (Lee adit or Main showing area). These workings are now collapsed and inaccessible. From 1965 to 1974, Giant Explorations completed detailed work, including blast trenching, hand stripping/pitting, road building, geological mapping, magnetic-VLF geophysical surveying and 38 shallow diamond drill holes (X-ray core) totalling 1,442 metres, dominantly focused on the Pit, Hilltop, Main and Pond zinc showing portion of the property. Reported highlights of the Giant Explorations diamond drill program include holes NL66-19 (8.8 metres at 5.6 per cent zinc, 2.8 per cent lead and 178 g/t silver from 13.4-metre depth) and hole NL66-20 (5.5 metres at 7.3 per cent zinc, 6.9 per cent lead and 370 g/t silver from 17.4-metre depth). From late 1970s to late 1980s, various small exploration companies completed limited and brief exploration work, including grid line cutting, geological mapping and repeated sampling of the property's more notable zinc showings. In 1988, Hisway Mining collected rock chip channel samples at the Pit and Pond showings, located about 600 metres west and 200 metres east, respectively, to the Main showing. Sampling at Pit reported 2.1 metres at 3.9 per cent zinc, 2.5 per cent lead and 744 g/t silver, while Pond yielded 1.5 metres at 9.2 per cent zinc, 4 per cent lead and 267 g/t silver. In 1988, Hisway drilled two short inclined diamond drill holes at the Pit showing (combined total of 89 metres), from which the company collected no samples. In early 2017, Precipitate, as part of its due diligence work, collected rock grab samples from the Main, Pond and Pit historical showings to verify historical data. Laboratory results from these rock samples show zinc values up to 20.6 per cent, lead values up to 9.4 per cent and silver values up to 932 parts per million.

This news release has been reviewed by Michael Moore, PGeo, vice-president, exploration, of Precipitate, the qualified person for the technical information in this news release under National Instrument 43-101 standards.

Rock and soil samples were bagged, sealed and delivered directly to the Bureau Veritas (BV) preparation facility in Vancouver, B.C., an ISO 9001-accredited facility, where they were dried, crushed (or sieved in the case of soils) and pulped. Samples were crushed (or sieved) to with up to 80 per cent passing two millimetres and split using a riffle splitter. An approximate 250-gram subsample split was pulverized to minus 200 mesh (74 micrometres). A 15-gram subsplit from the resulting pulp was then subjected to aqua regia digestion and multielement ICP-MS analysis. Rock sample results with overlimit zinc, lead and silver were subjected to ore and high-grade AA and ICP analysis.

About Precipitate Gold Corp.

Precipitate is a mineral exploration company focused on exploring and advancing its mineral property interests in the Tireo gold trend of the Dominican Republic. The company also maintains assets in Northern British Columbia and southeast Yukon.

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