08:08:51 EDT Fri 29 Mar 2024
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AIS Resources Ltd
Symbol AIS
Shares Issued 83,426,366
Close 2020-07-20 C$ 0.055
Market Cap C$ 4,588,450
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A.I.S. Resources options Yalgogrin project in Australia

2020-07-20 09:27 ET - News Release

Mr. Phillip Thomas reports

A.I.S. RESOURCES SIGNS BINDING LOI FOR WEST WYALONG ADVANCED GOLD PROJECT WITH DDH YAC5 INTERCEPT OF 9M AT 2.7GM/T AND 1M AT 21.5GM/T

On July 17, 2020, A.I.S. Resources Ltd. entered into a binding letter of intent (LOI) to acquire the Yalgogrin orogenic gold project, with auger results of 12.5 grams per tonne and 32.3 grams per tonne, and 14 diamond drill holes with intercepts ranging from 1.9 grams per tonne to one metre at 21.5 grams per tonne. The project is located in the historic West Wyalong gold corridor of central New South Wales, Australia, which produced 445,700 ounces of gold between 1894 to 1921. Denis Walsh, the vendor, is a senior consulting geologist at the Fosterville gold mine. A.I.S. will acquire two exploration licences: (i) the EL5891 tenement, which is 2.8 square kilometres (280 hectares) in size; and (ii) the EL6030 tenement, which is 56 square kilometres in size and encompasses two historical gold mines.

Located approximately 37 kilometres west of West Wyalong on the Newell Highway and 595 kilometres north of Melbourne, this advanced-stage exploration project is in the Lachlan fold belt of New South Wales in the historic Yalgogrin goldfield. This region has seen significant gold mining over the past 100 years and currently has three major operating gold projects:

  • Cadia Newcrest, located 220 kilometres northwest, producing 900,000 ounces of gold a year;
  • The Lake Cowal gold mine, which is located 40 kilometres from the Yalgogrin project and was purchased by Evolution for $550-million;
  • North Parkes, a copper/gold mine located 168 kilometres to the northeast, which, over 25 years, produced 1,464,000 ounces of gold and 1,168,000 tonnes of copper.

Thomson Resources Ltd. has staked around the EL5891 tenement completely.

Local geology

The local geological environment is a magnetic, magmatic complex of Ordovician age, located within the Lachlan fold belt. Numerous gold deposits occur in the West Wyalong Temora Adelong district, with many of them close to the Gilmore suture, which is delineated by regional aeromagnetic and gravity data. A sequence of Late Ordovician metasediments intruded by granites of (mostly) Silurian age is situated to the west of the suture. To the east of the suture, Ordovician metasediment strata form the basement to an extensive sequence of volcanics and sediments intruded by granitic, dioritic and gabbroic bodies of (mostly) Early Devonian age.

Granodiorite phases of the Siluro-Devonian batholiths are the host to, or were the source of, substantial primary and secondary gold mineralization at the Adelong, West Wyalong and Sebastopol-Junee reefs (some orebodies) along the Gilmore fault zone.

Phillip Thomas, president and chief executive officer of A.I.S., commented: "A.I.S. is very pleased to have secured this opportunity to explore and develop an advanced-stage gold project in the exciting historic gold district of New South Wales, Australia. The project is geophysics and drill ready, with 3,795 metres over 14 drill holes already completed and a substantial drill hole and magnetic survey database from other explorers from 1953, when BHP explored the area. The goal is to fast-track the project towards resource estimation, feasibility and then mine development in the Neighbour, Last Hurrah, Walsh, Adelaide and Holland deposits. The Adelaide mine area is not yet drilled. The company plans IP geophysics and drilling as soon as possible, with a focus on bulk-tonnage, near-surface, lower-grade opportunities; down dip/plunge and along strike of Holland/Walsh's/Last Hurrah 500 m trend, Bonanza-grade narrow vein targets near Adelaide mine and down dip/plunge of 140 m strike workings to 55 m depth, grades equivalent to one m at 24 g/t Au; Bonanza-grade narrow vein targets at Neighbours Farm; down dip/plunge of 14 m at 2.6 g/t Au (entered old stope) from one m and along strike to 32.3 g/t auger result."

Planned property exploration program

The tenement offers:

  • Mineralized system of significant scale containing numerous walk-up drill targets;
  • Open, high-grade, near-surface intersections;
  • Untested historic workings with reported high grades;
  • Bulk-tonnage, lower-grade potential;
  • Oxide heap leaching planned;
  • Land access secured and excellent relationships established.

The company's aim is to define the oxide resource, providing target guidance for deeper exploration. In summary, the program entails: 5,000 metres of percussion reverse circulation with downhole geophysics (optical televiewer); 240 metres of oriented diamond core holes (HQ3); quality assurance/quality control; a DGPS survey; downhole surveys; hand-held pXRF (portable X-ray fluorescence) multielement/gold fire assays with a 50-gram charge on one-metre intervals; preliminary metallurgical testwork; a resource estimate of oxide mineralization; and an induced polarization survey to guide further exploration at depth. The company's estimated cost is approximately $650,000 (Australian). The planned outcome will be a National Instrument 43-101-compliant gold oxide resource with IP chargeability and resistivity inversions for drill hole guidance.

Due diligence

A.I.S. will pay a $10,000 (Australian) option fee per month for three months to complete due diligence. The company plans to prepare an NI 43-101 technical report on the project, in accordance with regulatory requirements. All work since 2001 has been done by Mr. Walsh, who is a qualified person under NI 43-101. He is also the senior geologist working at the Fosterville gold mine in Victoria, which produced 155,106 ounces of gold this past quarter.

Acquisition terms

Under the terms of the LOI, A.I.S. will pay a $10,000 (Australian) (approximately $9,500 (Canadian)) deposit per month for an exclusivity period of 90 days, during which time A.I.S. will undertake due diligence and the parties will finalize and enter into a definitive agreement. As part of the LOI, Mr. Walsh will be granted a 2-per-cent net smelter return royalty on the first 50,000 ounces of production.

Under the terms of the LOI, A.I.S. will acquire a 60-per-cent interest in the Yalgogrin gold project in exchange for: (i) a cash payment of $275,000 (Australian) (approximately $261,250 (Canadian)) on the definitive agreement date; and (ii) the issuance, on the definitive agreement date, of $125,000 (Australian) (approximately $118,750 (Canadian)) of A.I.S. common shares. To acquire the remaining 40 per cent, A.I.S. will: (i) incur exploration expenditures of $750,000 (Australian) (approximately $712,500 (Canadian)) in the 12-month period after the signing of the definitive agreement; and (ii) the issuance, on the date that is 18 months from the definitive agreement date, of $600,000 (Australian) (approximately $570,000 (Canadian)) of A.I.S. common shares at the 20-day volume-weighted average price immediately preceding such date.

Closing of the definitive agreement is subject to, among other things, the receipt of all necessary approvals and all conditions having been satisfied or waived with respect to the terms of the LOI, including the approval of the TSX Venture Exchange. Technical information in this news release has been reviewed and approved by Phillip Thomas, a director of A.I.S., a qualified person under the definitions established by NI 43-101.

About A.I.S. Resources Ltd.

A.I.S. Resources is focused on precious metal and base metal exploration. The company is managed by a team of experienced mining and geological professionals. A.I.S. has been involved in manganese trading from mines in Peru.

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