Mr. Eric Roth of New Dimension reports
AUSTRAL GOLD CLOSES ACQUISITION OF NEW DIMENSION'S SIERRA BLANCA GOLD-SILVER PROJECT
Austral Gold Ltd. and New Dimension Resources Ltd. have closed the previously announced acquisition of New Dimension's Sierra Blanca gold-silver project in Santa Cruz province, Argentina. The transaction enables Austral to acquire an initial 80-per-cent interest in Sierra Blanca S.A. (SBSA) that owns the Sierra Blanca project for a total of $800,000 (U.S.) in cash and work commitments, with a follow-on option to purchase the remaining 20-per-cent interest for an additional $2.3-million (U.S.) in cash and work commitments. Austral plans to finance the cost of the transaction from cash flow generated from operations. Please refer to the joint news release dated April 1, 2020, for further details of the transaction.
Austral Gold's chief executive officer, Stabro Kasaneva, said: "We are pleased to add Sierra Blanca to our portfolio of attractive exploration projects in Argentina. The project complements our Pinguino project and expands our exploration footprint to over 17,000 hectares over the two projects. Both projects are located adjacent to each other in the geological zone of Deseado Massif in the Santa Cruz province, one of the most prominent precious metal regions in the world including world-class deposits such as Cerro Vanguardia 1."
Eric Roth, New Dimension's CEO, commented: "I am pleased to be reporting the closing of the Sierra Blanca transaction, after an extended due diligence process which had been significantly impacted by COVID-19 lockdowns and travel restrictions in Argentina. We are now looking forward to Austral initiating field activities at Sierra Blanca and continuing to work towards unlocking the full economic potential of the combined Sierra Blanca-Pinguino district.
"With the closing of the Sierra Blanca transaction, New Dimension now has three projects in which day-to-day operations are managed by joint venture partners (Sierra Blanca, Domain, and the recently announced joint venture with Ethos Gold Corp. at the Savant Lake project). This will allow us to focus on advancing our recently acquired, high-grade Lokken and Kjoli copper projects in Norway and the Southern Gold Line project in Sweden towards drilling. I look forward to keeping the market informed on advances at our Canadian and Scandinavian projects, as well as shortly providing an update on our Las Calandrias project."
Options to acquire 50 per cent of underlying net smelter royalties
New Dimension also entered into agreements with both Iamgold Corp. and Sandstorm Gold Ltd. that provide SBSA with options to acquire one-half of their respective royalties on the Sierra Blanca project.
The agreement with Iamgold provides SBSA the option to acquire one-half (0.75 per cent) of its 1.5-per-cent NSR for $750,000 at any time prior to the commencement of commercial production. In further consideration of this agreement, and subject to approval by the TSX Venture Exchange, New Dimension will issue Iamgold 500,000 NDR common shares.
The agreement with Sandstorm provides SBSA the option to acquire one-half (1 per cent) of its existing 2-per-cent NSR for $1-million at any time prior to the commencement of commercial production.
About the Sierra Blanca project
New Dimension acquired a 100-per-cent interest in the Sierra Blanca gold-silver project from Sandstorm Gold Ltd. in May, 2018, as part of the acquisition of a larger portfolio of three gold-silver projects -- Las Calandrias, Los Cisnes and Sierra Blanca -- all located in the highly prospective and mining-friendly Santa Cruz province. The Sierra Blanca project was previously controlled by Mariana Resources Ltd. and consists of approximately 7,000 ha (70 square kilometres) of mining claims.
Previous work at Sierra Blanca had mostly been focused on the east-to-west-trending Chala-Achen and Lucila vein systems, where high-grade silver values had been derived from surface channel sampling (including 9.4 metres at 2,362 grams per tonne silver at Chala-Achen; see New Dimension news release dated March 4, 2019). During 2019, exploration activities at Sierra Blanca were focused on trenching and sampling on the northwest-trenching Ana (and Ana Splay), Tranquilo, and Laguna vein fields with targets for follow-up drilling having been defined. A total of 10 target areas have been identified for further work at Sierra Blanca (typically dilation zones associated with the intersection of mineralized northeast- and northwest-trending vein/fault systems), and only four of these have been partially tested by historical drilling (a total of 122 holes for 15,924 m, completed mostly in the Chala-Achen-Lucila corridor). All of the major vein systems known in the eastern portion of the Sierra Blanca are interpreted by New Dimension to extend into the adjacent Pinguino property.
About the Pinguino project
The silver-gold-zinc-lead-indium Pinguino project is an advanced stage development project located in the south-central part of Argentina, 300 km southwest of the city of Comodoro Rivadavia and 220 km northwest of Puerto San Julian. In the last 15 years, six mines were constructed in the Santa Cruz province, making it one of the most prominent precious metal regions in the world, including world-class deposits such as Cerro Vanguardia and Cerro Negro1. The Pinguino project is embedded in a vein field similar, but smaller to Cerro Vanguardia, some 35 km northwest along the same controlling structure as the Pinguino deposit (225 km strike length of veins versus 115 km strike length of veins). The project has year-round access, is close to major infrastructure, has no nearby communities and more than 70 per cent of surface land is owned by Austral.
The 2014 updated resource estimate highlights include:
Ag Eq equals Ag plus 50 Au
Zn, Pb and In are not included in the resource for Ag equivalent.
- The technical report was prepared by mine development associates of Reno, Nev., and dated Sept. 19, 2014.
- Austral is not aware of any new information or data that materially affect the data above.
- All material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.
- The form and context in which the competent person's findings are presented have not been materially modified.
Qualified persons and disclosure statement
The technical information in this news release relating to the Pinguino project has been approved by Dr. Robert Trzebski, a competent person and a qualified person under NI 43-101 who is a fellow of the Australian Institute of Mining and Metallurgy (AUSIMM) and an independent director of Austral Gold.
About Austral Gold Ltd.
Austral Gold is a growing gold and silver mining, development and exploration company building a portfolio of quality assets in Chile, the United States and Argentina. Austral's flagship Guanaco/Amancaya project in Chile is a gold and silver producing mine with further exploration upside.
About New Dimension Resources Ltd.
New Dimension is engaged in the acquisition, exploration, and development of quality mineral resource properties in favourable jurisdictions with a focus on high-grade gold and base metal deposits. The company's current focus is on the discovery through exploration of high-grade gold deposits on its newly acquired 100-per-cent-owned Southern Gold Line project (Sweden), as well as on its Savant Lake project (Ontario) and its 29.6-per-cent interest in the domain joint venture with Yamana Gold in Manitoba (Canada).
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