Banyan Gold to Acquire Options for McQuesten and Aurex Gold Properties, Yukon – Consolidating the District
Calgary, Alberta (FSCwire) - BANYAN GOLD CORP. (“Banyan” or the “Company”) is pleased to announce that it has signed letters of intent for option agreements (the”Options”) to acquire up to 100% of the Aurex Property, from Victoria Gold Corp. (“Victoria”) and up to 100% of the McQuesten Property, from Alexco Resource Corp. (“Alexco”). 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, approximate 9,230 hectares 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, CEO 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 (“NI-43-101”) Reserve of 2.7 million ounces of gold (“Au”) 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 (“km”) 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 dykes 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 is comprised of 73 Quartz Mining Claims with a long history of precious metals exploration and exploitation including over 11,000 meters (“m”) of RC/RAB drilling (286 holes), over 4,900m of diamond drilling from 47 holes, 35 trenches (3,900m), over 350 soil samples and a 2006 detailed airborne EM-Mag survey. Anomalous gold-in-soils combined with drill results and detailed trenches have defined a 1.6 km by 1.3 km area of anomalous +0.5 grams per tonne (“g/t”) gold. Drilling highlights in this area (located within 500m of the Aurex claim boundary) include 18.3m @ 3.74 g/t Au and 1.1m @ 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 21.3m (RC97-03)
1.77 g/t Au over 35.3m (RC97-02)
1.37 g/t Au over 36.6m (MQ00-4)
3.31 g/t Au over 4.3m (MQ00-4)
Similarly, in the East Zone, drilling has returned significant intercepts from four skarn horizons:
4.10 g/t Au over 9.6m (D83-01)
0.54 g/t Au over 14.0m (D83-02)
4.10 g/t Au over 3.0m (D83-04)
5.60 g/t Au over 3.0m (D83-06)
1.51 g/t Au over 11.1m (D83-06)
1.11 g/t Au over 33.0m (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 17,000m 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 1900’s) was focused exclusively on Keno Hill type silver veins, gold mineralization on these claims was first reported in 1955.
Exploration during the 1990’s included 3,089m of percussion drilling in 148 holes and a 4.25 km induced polarization (IP) geophysical survey. In 2000, Newmont Mining Corporation and Expatriate Resources Inc. initiated a multi-million dollar exploration program of mapping, sampling and airborne geophysics over the Aurex property.
In 2003, StrataGold Corporation (“StrataGold”) completed 4,038m 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 north-east 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 15.00m of 1.51 g/t Au, including 7.50m of 2.51 g/t Au and 19.17m of 0.97 g/t Au. Significant intersections of sheeted stratabound silicified skarn horizons include 10.01m of 0.74g/t Au including 1.01m 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 (“Ag”), >10,000 ppm 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% zinc.
Highlights from the 2003 StrataGold drill program are presented below:
Drill Hole #
Highlights of Aurex Agreement with Victoria:
Under the terms of the binding Letter Agreement with Victoria, which is subject to TSX Venture Exchange (“TSX-V”) approval, Banyan may earn up to 100% interest in the Aurex property in three (3) stages:
- Initial 51% Option Interest - To acquire the initial 51% Option Interest in the Property, the Company is required, over a period of four (4) years, to issue in stages a total of 3 million common shares in the capital of the Company, and to incur in stages minimum exploration expenditures totaling $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 5th year. Following the earning of the 51% Option Interest, a joint venture (“JV”) will be formed and Banyan will have the ability to elect to earn an additional 24%.
- Additional 24% Interest - In order to earn the Additional 24% Interest, such that Banyan would have an aggregate interest of 75% in the Property, Banyan will be required to spend an additional $3.5 million in exploration expenditures over five (5) years. Upon having earned the Additional 24% Interest, Banyan will continue to act as the Property’s operator and may elect to earn an additional 25%.
- Additional 25 % interest - In order to earn the Additional 25% Interest, such that Banyan would have an aggregate interest of 100% in the Property, within two (2) years Banyan must pay Victoria $2 million cash or shares and grant Victoria a 6% net smelter return (“NSR”) royalty with buybacks totaling $7 million to reduce to a 1% NSR royalty on Au and a3% 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% of Banyan outstanding shares and this investment will increase their percentage to 8.8%.
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 TSX-V, Government of Canada and Silver Wheaton Corp. approvals, under which Banyan may earn up to a100% interest in the McQuesten property in three (3) stages:
- Initial 51% Option Interest - To acquire the initial 51% Option Interest in the Property, the Company is required, over a period of four (4) 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 totaling $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 5th year. Following the earning of the 51% Option Interest, a JV will be formed and Banyan will have the ability to elect to earn an additional 24%.
- Additional 24% Interest - In order to earn the Additional 24% Interest, such that Banyan would have an aggregate interest of 75% in the Property, within three (3) 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% Interest, Banyan will continue to act as the Property’s operator and may elect to earn an additional 25%.
- Additional 25% interest - In order to earn the Additional 25% Interest, such that Banyan would have an aggregate interest of 100% in the Property, within two (2) years Banyan must pay Alexco $2 million in cash or shares, deliver a Pre-Feasibility Study and grant Alexco a 6% NSR royalty with buybacks totaling $7 million to reduce to a 1% NSR royalty on Au and a 3% NSR royalty on Ag.
Alexco will make a strategic investment of $350,000 in Banyan, and 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% equity ownership in Banyan. Because of such strategic investment, Alexco will have an initial 7.7% 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, P.Geo., a Qualified Person as defined by NI 43-101.
About Banyan Gold
Banyan is a gold exploration and development company whose flagship property, the Hyland Gold Project, is approximately 70km NE 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 cutoff, hosts a 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 396,468 ounces gold equivalent.
Banyan trades on the TSX-Venture Exchange under the symbol “BYN”. For more information, please visit the corporate website at www.BanyanGold.com or contact the Company.
ON BEHALF OF THE BANYAN BOARD OF DIRECTORS
(signed) "Tara Christie"
President & CEO
For more information, please contact:
Tel: (888) 629-0444
Tel: (888) 629-0444
CAUTIONARY STATEMENT: The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release contains forward-looking information, which is not comprised of historical facts. Forward-looking information involves risks, uncertainties and other factors that could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, Banyan’s objectives, goals or future plans, statements regarding exploration expectations, exploration or development plans and the timing of negotiating the definitive agreements. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, uncertainties inherent to preparing a resource estimate within expected timeline, capital and operating costs varying significantly from estimates, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and the other risks involved in the mineral exploration and development industry, enhanced risks inherent to conducting business in any jurisdiction, and those risks set out in Banyan’s public documents filed on SEDAR. Although Banyan believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Banyan disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. Paul D.Gray of Banyan Gold Corp. is a “qualified person” within the meaning of such term as set forth in National Instrument 43-101 of the Canadian Securities Administrators, and has verified and supervised the preparation of all of the scientific and technical information contained in this news release.
Statements in this news release regarding Banyan Gold which are not historical facts are “forward-looking statements” that involve risks and uncertainties. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations.
To view this press release as a PDF file, click onto the following link:public://news_release_pdf/banyan02282017.pdf
Source: Banyan Gold Corp. (TSX Venture:BYN)
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