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Kore Mining mulls spinning out B.C. assets

2020-11-24 11:50 ET - News Release

Mr. Scott Trebilcock reports


Kore Mining Ltd.'s board of directors is considering maximizing the value of its gold portfolio by splitting Kore's United States development assets and Canadian exploration assets into separate publicly listed companies by way of a spinout to Kore shareholders. The board has authorized management to consider the various transactional options to accomplish this objective in the most tax-efficient and value-creating manner. It is anticipated a decision will be made in the coming weeks and a transaction could be completed as early as Q1 2021.

If the transaction is completed, the new stand-alone publicly listed gold company would include the Canadian exploration assets, consisting of a commanding 1,000-square-kilometre claim position in the Cariboo gold district including the FG Gold and Gold Creek gold projects. The Cariboo region of British Columbia is an active and experienced mining jurisdiction that is host to Osisko Gold Royalties Ltd.'s Cariboo gold project and several large operating copper-gold mines. Kore would retain the U.S. gold development pipeline assets with the Imperial gold project and the Long Valley gold project.

Scott Trebilcock, president and chief executive officer, stated: "With a dominant 1,000-square-kilometre position in a highly prospective gold district, including the recent transformational high-grade discovery at FG Gold, Kore's South Cariboo gold assets are an exceptional gold exploration story. It is also a great time for the Cariboo gold district with Osisko's aggressive exploration and development activity attracting attention and capital. The spinout would directly expose Kore shareholders to the value-creation potential of this impressive exploration story."

The company recently intercepted 14.3 metres of 6.4 grams per tonne gold at 386 m downhole at FG Gold (see Nov. 11, 2020, news release). This new discovery, which extends over 300 m down dip from the known resource, opens up underground potential and could have a profound impact of the size and grade of the FG gold deposit. Assays are pending for additional 14 holes over 1,780 m of lateral strike with seven holes intersecting quartz veining with visible gold (see pictures on company website). Drilling continues with 2,000 m planned to expand Gold Creek through mid-December.

Mr. Trebilcock continued: "Kore will retain the Imperial and Long Valley development assets; simple, low-cost gold heap-leach projects in the U.S., each with their own robust returns and the potential to produce nearly 250,000 ounces of gold per year. Kore would remain attractive to investors looking for exposure to low-cost gold development and potential mergers and acquisitions that quality assets can generate as the gold cycle matures."

A final decision has not been made and there can be no assurance that this evaluation will result in a spinout or other similar transaction. The company will provide further updates at such time as the board approves a specific transaction or otherwise concludes that disclosure is necessary or appropriate.

About Kore's South Cariboo exploration assets

Kore controls 1,000 square km of claims in its South Cariboo gold district of British Columbia. The claims host 110 km of structural trend that is highly prospective for gold deposits. Kore has multiple projects in the district, including FG Gold and Gold Creek gold projects. Much of the area is underexplored and wide open for additional discoveries. The Cariboo region is a prolific gold region. The district was host to the Cariboo gold rush in the late 1800s, followed by a long history of modern gold mining. The Cariboo region is accessible with local power, a well-developed road network and skilled local labour.

The FG gold project hosts an orogenic gold deposit on a 20 km trend defined by gold in soils and geophysics. Kore's 2020 drilling transformed the project, opening up the potential for both open-pit and underground type mineralization. The project also hosts copper-gold porphyry mineralization at the Nova zone, discovered by Kore in 2018.

The Gold Creek project is an orogenic gold discovery centred on the Camp zone, which show similarities to the high-grade zone of the nearby Spanish Mountain gold deposit. The Camp zone's near-surface mineralization currently extends over 400 m along strike, and is open along both strike and at depth. Kore is currently drilling a planned 2,000 m program to expand Gold Creek.

About Kore's U.S. development assets

Imperial is a 100-per-cent-owned gold project located in Imperial county, California, about 10 miles from the operating Mesquite mine owned by Equinox Gold Corp. In 2020, Kore completed a preliminary economic assessment for an open-pit heap-leach operation yielding a posttax net present value (5 per cent) of $343-million (U.S.) and an internal rate of return of 44 per cent using $1,450 per ounce gold. Kore also owns the Mesquite-Picacho district capturing the 28 km gold trend from Equinox's operating Mesquite mine, through Imperial to the now closed Picacho mine. The trend is underexplored and has the potential to host additional gold deposits.

Long Valley is a 100-per-cent-owned gold project located in Mono county, California. The Long Valley deposit is an intact epithermal gold deposit with a shallow, large 2.5 km by two km oxide gold footprint. In 2020, Kore completed a preliminary economic assessment for an open-pit heap-leach operation yielding a posttax NPV (5 per cent) of $273-million (U.S.) and an IRR of 48 per cent using $1,600 per ounce gold. Kore is currently permitting a drill program to expand the shallow oxide mineralization and test for high-grade sulphides at depth.

About Kore Mining Ltd.

Kore is 100-per-cent owner of a portfolio of advanced gold exploration and development assets in California and British Columbia. Kore, supported by strategic investor Eric Sprott, and insiders, including management and board, own 64 per cent of the basic shares outstanding.

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