West Melville Metals Inc. Publishes NI 43-101 technical report on the Wels Gold Property in the Whitehorse District, Yukon and Completes $2.0 Million Private Placement
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Vancouver, B.C. – October 27, 2016 – West Melville Metals Inc. (“West Melville” or the “Company”) (WMM:TSX-V) is pleased to announce the completion and filing of a National Instrument 43-101 compliant independent technical report, dated September 6, 2016 (Revised October 6, 2016), on the Wels Gold property (the “Technical Report”).
The Technical Report entitled “Technical Report on the Wels Gold Property, Whitehorse Mining District, Yukon, Canada” was prepared by R. Allan Doherty, P.Geo. of Aurum Geological Consultants Inc., and has been filed under the Company’s profile on SEDAR (www.sedar.com) and the West Melville website (www.westmelville.com).
The Company’s option agreement with Gorilla Minerals Corp. (“Gorilla”) to acquire a 90% joint venture interest (subject to an existing 3% NSR) in the Wels Gold property, first announced on August 15, 2016 has now been accepted by the TSX Venture Exchange, and the Company closed the related $2.0 million financing.
- West Melville has published an NI 43-101 report on the Wels Gold Property which is located in the Whitehorse Mining District, Yukon, Canada, in a newly discovered mineral zone within the Tintina Gold belt
- The Wels Gold Property (the “Property”) has favorable logistics; it is located 20km east of Snag, a 2km long historical airstrip which is connected by highway to Beaver Creek and is only 60km south of Goldcorp’s Coffee deposit
- Preliminary studies indicate the mineralization is of Intrusive Related Gold System type (”IRGS”) similar in style to the multi-million ounce Fort Knox and Dublin Gulch (Eagle) deposits
- Rock samples collected directly beneath anomalous soil samples have returned values of up to 149.5 g/t gold (4 other samples from the same location returned 17.7 g/t, 24.0 g/t, 3.1 g/t and 28.6 g/t)
- Trenching results returned 8.8 g/t gold over 45.0m including 9.15 g/t gold over 40.5m
- A five hole 442m drill program in 2015 returned gold mineralization in all holes. Hole DDH01 recorded 0.76 g/t over 97.5m (end of hole and not true width)
- An exploration program has been submitted by the Company for approval by White River First Nations and the Yukon Government for the 2016-2017 season
- In conjunction with the Wels property transaction, the Company has completed its previously announced non-brokered private placement of 8.0 million units at a price of $0.25 per Unit, for gross proceeds of $2.0 million
John Robins Chairman of West Melville states, “The Wels gold project is an exciting opportunity for West Melville and affords the Company a platform to leverage off Kaminak’s recent success and experience in the Yukon”.
The Wels Gold Property - Overview
The Property is located in the Traditional Territory of White River First Nation (the “WRFN”), and is approximately 50km east of Beaver Creek and 180 km south of Dawson City, west central, Yukon. The area comprises 229 contiguous ‘quartz claims’ covering an area of approximately 4,788 hectares. The Property is a new discovery in an area not previously recognized to host the potential for gold. The Property was staked in 2011 and to date only 1 km by 1km of the Property has undergone some exploration (soil, trench-rock sampling and diamond drilling). The remainder of the Property has undergone little or no exploration or has only been subjected to airborne geophysics (2.5km x 2.5km grid flown for magnetics and radiometrics).
The Property is located within the prolific Tintina Gold Province that stretches over 1,500km from western Alaska to eastern Yukon and is host to a variety of styles of gold and base metal mineralization. The local geology is interpreted as IRGS type with ‘Tombstone Belt’ rock-type affiliations similar to the Dublin Gulch-Eagle and Fort Knox gold mines, both multi-million ounce deposits.
Gorilla Minerals Corp, the Property vendors, collected 1658 soil samples (2011, 2012 and 2014), undertook 155m of trenching and rock sampling (104 trench samples plus 28 rock samples) and undertook 442M of diamond drilling (300 samples) in addition to a small airborne magnetic and radiometric survey. The area of exploratory investigation to date only covers approximately 2km by 4km.
The property was staked in 2011 based on 2 slightly anomalous soil sample values (36 ppb Au and 57 ppb Au) collected from a 2002 regional Yukon Government program.
2011 Soil Sampling
In 2011 a 2km x 1km soil grid was established over the central area of the claims. Soils taken over the Property identified 3 anomalous zones (values above 120ppb), now termed the Saddle zone, North Zone and Southwest Spur. The Saddle Zone in particular returned very high values including 5204 ppb Au, 3740 ppb Au and 1984 ppb Au and subsequently became the main focus of attention in 2012 (sample set was 88 samples, 16 of which returned values above 122 ppb Au and only 26 returned < 5.4ppb Au)
2012 Soil Sampling and Trenching
Infill soil sampling was completed over all 3 zones. The results of both programs show that 102 samples (7.6%) were above 63.3ppb Au and of those 48 (3.6%) were above 122 ppb. In 2012 one hand trench (Trench A) was dug to fractured bedrock (1.5m depth) and a single representative rock sample returned 149.5 g/t Au (the “Discovery sample”).
2013 Rock Sampling
Due to unforeseen circumstances at the end of the field season in 2012 the high grade results were only followed up with one small rock sampling program in 2013 which returned an average of 15.25 g/t Au from 5 rock trench samples 2kg to 3kg in weight from the same location as the Discovery sample.
2014 Rock Trenching
In 2014 a much more expansive trenching program (155m) returned the following results:
|Trench #||From (m)||To (m)||INT (m)||Au (g/t )|
2015 Airborne Survey
An airborne magnetic and radiometric survey flown in 2015 was unsuccessful in providing drill targets or valuable technical information due to the lack of lithological contrast between the intrusive granitoid rocks and the siliceous country rocks.
A 442 metre diamond drilling program was completed in June 2015. The drill was set up on 2 platforms and because parallel mineralized trends were suspected the holes were either drilled in a northerly or southerly direction at various angles of inclination.
DDH01/02/03 were drilled from one platform and DDH 04 and 05 from a second platform 50m west of DDH01/02/03. DDH01/DDH02 and DDH04 were drilled in a due north direction and DDH03 and DDH05 in a due south direction.
|Drill Hole #||From||To||Interval length (not true width)||Au (g/t)|
The exploration to date demonstrates that IRGS mineralization of the Fort Knox style hosting high grade gold exists outside of the traditionally recognized Tombstone Belt districts in the Yukon and Alaska. The drilling shows that mineralization extends to at least 80m true depth but the extent and orientation of the mineralization is still largely unknown over the area that is only partially explored to date. Local geological interpretation suggests that the mineralization profile is preserved and much more work is required to understand the size, depth, lateral extent and economic potential of this exciting new discovery.
Consistent with the recommendations in the Technical Report, the Company expects to undertake a follow-up program of VTEM geophysics and more groundwork, including drilling, to be applied for the 2016-2017 exploration season. Updates on the Company’s exploration plans for the Property will be provided as additional information becomes available.
In conjunction with the Wels property transaction, the Company has completed its previously announced non-brokered private placement of 8.0 million units (the “Units”) at a price of $0.25 per Unit, for gross proceeds of $2.0 million (the “Offering”). Each Unit consists of one common share of the Company (a “Share”) and one-half of one non-transferable common share purchase warrant (a “Warrant”). Each whole Warrant entitles the holder to purchase one additional Share at an exercise price of $0.35 per Share for a period of 18 months from the closing, subject to an acceleration provision under which, if at any time after February 28, 2017, its common shares close at a price at or above $0.50 per share for more than 10 consecutive trading days, West Melville may give notice (the “Notice”) to the holders of the Warrants, and issue a press release, advising that the Warrants will expire on the date which is 30 calendar days after the date of the Notice.
In connection with the Offering, West Melville entered into finder’s fee agreements with six arm’s length finders, Canaccord Genuity Corp., Richardson GMP Ltd., Mackie Research Capital Corporation, PI Financial Corp., Haywood Securities Inc., and Leede Jones Gable Inc., pursuant to which West Melville issued 136,200 warrants (“Finder’s Warrants”). Each Finder's Warrant has the same terms as the Warrants issued under the Offering.
As certain insiders of the Company participated in the Offering, it constituted a related party transaction pursuant to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company relied on section 5.5(a) of MI 61-101 for an exemption from the formal valuation requirement and section 5.7(1)(a) of MI 61-101 for an exemption from the minority shareholder approval requirement of MI 61-101 as the fair market value of the transaction did not exceed 25% of the Company’s market capitalization.
The net proceeds from the Offering will be used by West Melville principally to advance its exploration plans and payment commitments on the Wels Gold property, and also to expand the project portfolio by possible new acquisitions, and for general working capital purposes.
All securities issued in connection with the Offering will be subject to a hold period expiring February 28, 2017.
R. Allan Doherty, P.Geo., author of the Technical Report is the Qualified Person, in accordance with NI 43-101 of the Canadian Securities Administrators, and is responsible for the technical content of this press release.
For additional information please contact Stephen Swatton at 604-343-3530.
On behalf of the Board of Directors,
President and CEO
West Melville Metals Inc.
This news release contains forward-looking statements that are not historical facts. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements, including statements regarding the mineral potential of the Wels Gold Property, future exploration plans and consultations with the WRFN. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the Company’s inability to reach satisfactory agreements with the WRFN to facilitate its exploration and development plans for the Wels Gold Property, the Company's inability to obtain any necessary permits, consents or authorizations required for its planned activities, and the Company's inability to raise the necessary capital or to be fully able to implement its business strategies. The reader is referred to the Company's public disclosure record which is available on SEDAR (www.sedar.com). Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply 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. Except as required by securities laws and the policies of the TSX Venture Exchange, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. No securities of the Company have been or will, in the foreseeable future, be registered under the United States Securities Act of 1933 (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.
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