Dec 19 2017
West Kirkland Mining Inc. (“West Kirkland”, “WKM” or the “Company”) has entered into a lease agreement with historic Tonopah Divide Mining Company (“TDMC”) for a 100% working interest on mining patents and mineral claims covering 2,500 acres adjacent to the Company’s Hasbrouck and Three Hills Project near Tonopah, Nevada.
The lease of the TDMC ground combined with WKM’s existing land package is a logical consolidation of projects. Total WKM controlled mineral rights at Tonopah now cover 17,100 acres, including multiple areas of previous gold production. The TDMC lease includes important areas of former open pit and underground gold production, some of which have no record of exploration since the 1920’s. TDMC was incorporated in 1908 and has carefully consolidated and confirmed title over the lease area in the past several decades, including important and careful legal historic title work in the past two years. The TDMC ground and the Company’s recent staking creates a contiguous block stretching from the Hasbrouck open pit area to the Hill of Gold property recently optioned by the Company.
“We are very pleased, following an improved understanding of the camp from work we have done on our growing land position, to formally consolidate this part of the historic Tonopah Divide Mining Camp with our own deposits. The opportunity for the first known modern drilling in areas of gold and silver mineralization hosting surface workings, shafts and known gold veins is truly exciting. Adding this potential to the Company’s existing 927,000 Measured and Indicated Resource gold ounces (957,000 gold equivalent ounces) provides an opportunity build the regional resource base beyond the important 1 million ounces of gold threshold,” said R. Michael Jones CEO of West Kirkland Mining.
The terms of the Lease for a 100% working interest in the property with TDMC includes the payment of an optional annual amount of US$75,000 in advance royalties, an optional US$100,000 annual work requirement from 2018 to 2022, increasing to US$200,000 per year from 2023 to 2028. TDMC is to receive approximately 3% NSR royalty from any production from the property, less any underlying royalty payments and the advance royalties already paid.
The current Hasbrouck and Three Hills Project consists of two planned open pits with heap leach facilities based on pre-feasibility level work and construction-level drawings. Construction and operation are fully permitted at both federal and state levels for the first pit and heap leach facility. The after-tax project NPV5 at US$1,275 /oz gold is US$120 million and a 43% IRR (784,000 AuEq ounces at 0.6 g/t Au; see “Technical Report and Updated Preliminary Feasibility Study: Hasbrouck and Three Hills Gold-Silver Project, Esmeralda County, Nevada,” dated September 14, 2016 available on SEDAR and at www.wkmining.com).
The objective of the lease consolidation is to add open pit oxide heap leachable resources to the Company’s profile within easy trucking distance to the permitted recovery facilities. The targets are all located within 8 kilometers (5 miles) of the planned Hasbrouck or 3 Hills leach pads areas.
The Company recently completed a detailed surface mapping and sampling program on and around its 100% held Hill of Gold Property, which lies between the Company’s Three Hills and Hasbrouck deposits, as well as on land lying between Hill of Gold and the Hasbrouck deposit. Sample assay results obtained in late 2017 will shortly be compiled with further sampling being completed now on the new TDMC Lease area. This new sample information will inform a regional exploration plan including drilling starting in January 2018 directed at the targets shown on the map above.