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Rugby Mining Ltd
Symbol RUG
Shares Issued 63,922,500
Close 2016-10-18 C$ 0.245
Market Cap C$ 15,661,013
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Rugby Mining to acquire Colombian Au project

2016-10-19 06:40 ET - News Release

Mr. Paul Joyce reports

RUGBY FIELD WORK CONTINUES-SAN ANTONIO GOLD PROJECT OPTIONED

Rugby Mining Ltd.'s field program in Colombia has identified the San Antonio gold project for inclusion in the property portfolio. Subject to TSX Venture Exchange approval, the company has entered into an option to acquire a 100-per-cent interest in a granted mining concession of 1,664 hectares.

Rugby has negotiated an attractive option that allows the company to assess the merits of the project quickly and inexpensively. It is anticipated that because San Antonio is a granted concession, it can be drill ready by first quarter 2017.

San Antonio is situated approximately 80 kilometres south of Medellin in the mid-Cauca gold district. It was visited due to its proximity to one of the properties recently acquired (announced June 1, 2016), supported by specific information within the large database being reviewed.

San Antonio hosts a porphyry-type, multiphase sheeted and stockwork quartz vein system. Management considers the geological setting to be similar to a number of the most significant gold-silver deposits in the mid-Cauca gold district.

Rugby chief executive officer Paul Joyce stated: "San Antonio was discovered when our geologists were investigating a nearby Tertiary mineralized porphyry occurrence on a Rugby concession application. It appeared that the porphyry system was continuing into the adjoining San Antonio concession.

"Subsequent follow-up identified a potentially large, undrilled gold porphyry target exposed on a prominent hill. The scale of the target is impressive, appearing to be some 1,000 metres by 800 metres in size. It is surprising that such a target is undrilled. Importantly, there are no small-scale gold-mining activities currently being conducted at the site."

The company will continue to evaluate its extensive Colombian portfolio to identify the highest-priority gold targets. Other opportunities will likely be generated from the large database.

Agreement terms

The option agreement allows for a 60-day period to conduct legal and technical due diligence. Rugby will then have the option to pay the private Colombian vendor a total of $750,000 (U.S.) in staged payments over a five-year period to earn 90 per cent of the project. At that point, Rugby will then have an additional option to acquire the remaining 10-per-cent interest by paying $1-million (U.S.) in staged payments over two years for a total 100-per-cent interest. Rugby also has a right of first refusal to purchase the vendor's 1-per-cent net-smelter-return interest.

Francisco Montes, Rugby's chief geologist and a qualified person within the definition of that term in National Instrument 43-101, has verified the technical information that forms the basis for this news release.

We seek Safe Harbor.

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