VANCOUVER, April 9, 2015 /CNW/ - Alternative Earth
Resources Inc. ("AER") (TSX.V: AER) and Kiska Metals Corporation
("KSK") (TSX-V: KSK) are pleased to announce that they have
signed a non-binding Letter of Intent ("LOI") outlining the terms
of a transaction whereby AER will acquire from KSK a 100% interest
in Kiska's Whistler Project located in southern Alaska. It is intended that the LOI will be
replaced by a definitive and binding agreement in mid-April,
2015. A shareholder meeting to approve the transaction is
scheduled for June 23, 2015.
Under the LOI, which has been approved unanimously by the
directors of both AER and KSK, AER will acquire the Whistler
Project, including the mining claims and certain physical assets
belonging to the project, in exchange for the issuance of
24,482,115 common shares in the capital of AER, which will
represent 50% of the post-transaction issued capital of AER.
After completion of the transaction, AER will have 48,964,230
shares outstanding (51,682,230 fully diluted) and the board of
directors of AER will be reconstituted to include five directors.
Grant Ewing, currently CEO of KSK,
will become CEO of AER and Brian Fairbank, the current CEO of AER,
will become Executive Chairman. The transaction is subject to
TSX Venture Exchange acceptance for both KSK and AER, receipt of
required third party consents, AER shareholder approval, receipt by
AER of an independent Valuation Report and a Title Opinion on the
Whistler Project. The working capital of AER at closing is
estimated to be not less than $2,100,000.
The parties have not yet assigned a value to this transaction,
which will be valued in the context of the market. An independent
Valuation Report has been commissioned by AER.
"Alternative Earth is pleased with the potential acquisition of
the significant Whistler Deposit, the encompassing Porphyry
Gold-Copper District and the physical project assets following an
extensive search and due diligence process" stated Brian Fairbank, CEO of Alternative Earth
Resources Inc. "I believe the timing is right relative to possible
improvement in gold and metal prices, however, Alternative Earth's
available cash is sufficient to sustain the Company and the
Whistler assets through several years if necessary. The Company can
add near-term value by re-evaluating the extensive geophysical and
drilling data base augmented by new field studies in a rich target
environment."
The 17,000 hectare (65 square-mile) mineral property, located
150 km northwest of Anchorage,
Alaska (the "Whistler Project"), encompasses a large
Porphyry Gold-Copper District. Exploration completed by KSK to date
has delineated a resource (the "Whistler Deposit") which is
estimated to contain an Indicated Resource of 79.2 million tonnes
grading 0.51 g/t gold, 1.97 g/t silver and 0.17% copper (2.25
million ounces gold-equivalent), and an Inferred Resource of 145.8
million tonnes grading 0.40 g/t gold, 1.75 g/t silver and 0.15%
copper (3.35 million ounces gold-equivalent) by Robert J. Morris, P.Geo. of Moose Mountain
Technical Services, an independent Qualified Person ("Morris"). The
resource is the base case resource for the Whistler Deposit at a
$7.50/ton cut-off (approximately 0.3
g/t gold-equivalent at the base case prices), incorporating process
recoveries of 85% for copper and 75% for gold and silver, and metal
prices of US$990 per ounce gold,
US$15.40 per ounce silver, and
US$2.91 per pound copper.
Mining, processing and off-site costs have been applied in order to
determine that the pit resource has a reasonable prospect of
economic extraction. The Whistler Deposit comes to surface
exposed over a 600 by 800 metre area along a broad ridge resulting
in a relatively low 1.3:1 strip ratio. The resource is open
to depth with the potential to expand the resource base with
further drilling below the known deposit.
Technical information pertaining to the Whistler Deposit
contained in this News Release has been obtained from a technical
report "Resource Estimate Update for the Whistler Copper Gold
Deposit and Results of Property Wide Exploration" prepared in
compliance with National Instrument 43-101 by Morris and dated
March 17, 2011 (the "Resource
Report"). For further information concerning the Whistler Deposit
and the Whistler Property, refer to the Resource Report which is
available under KSK's corporate profile on SEDAR at www.sedar.com.
An updated Resource Report to be prepared by Morris will be
obtained by AER in connection with the transaction.
Physical assets to be acquired by AER include a 50-person
all-season camp comprised of 37 sleeper tents, three wood-frame
dormitory sleepers, cooking, recreational, shower, restroom, first
aid and generator facilities. Ancillary facilities include a
water well, a septic system, two core logging facilities, a core
cutting facility, a gravelled core storage area, and a large
maintenance garage for servicing all rolling stock and camp
equipment. Communications equipment includes a wireless satellite
system providing five dedicated phone lines and internet. A cell
phone repeater station located on Whistler Ridge also provides cell
phone coverage in the area.
A 3300 foot, all weather, gravel airstrip completed in 2011 is
capable of landing DC-3 class and smaller aircraft and includes a
30,000 gallon (113,400 liter) fuel storage facility. Shop and
warehouse buildings and an equipment lay-down area off the runway
are provided for drilling and other contractor support. The camp
and airstrip are connected to the Whistler Deposit and Whistler
Orbit areas by a six kilometer access road.
Heavy equipment and ground transport machines at the Whistler
Project include one Cat D6 bulldozer; one Cat 226B track
skid-steer; one Bobcat skid-steer; one Volvo A-30 haul truck; ten
snowmobiles; five ranger-style ATVs; and three 4-wheeler "Quad"
ATVs.
In addition to the Whistler Deposit, excellent potential exists
to discover additional gold-copper deposits within the boundaries
of the large Whistler Property. For example, gold-copper porphyry
occurrences (Raintree West, Raintree North, Rainmaker, and Dagwood
prospects) within a low-lying, glacial till covered area known as
the "Whistler Orbit" immediately northeast, east and southeast of
the Whistler Deposit have been discovered and partially tested by
2008-2011 drilling of geophysical anomalies, principally
aeromagnetic and induced-polarization (IP) chargeabilty highs. The
Snow Ridge prospect, three kilometres northwest of the Whistler
Deposit, is distinguished by a large gold-copper-molybdenum soil
anomaly and a partially coincident IP anomaly occurring within the
same geological environment as is host to the Whistler Deposit.
Other resource development targets occur at the Island Mountain
gold-copper porphyry cluster located 22 km southwest of the
Whistler Deposit. Drilling at the Island Mountain Breccia
Zone encountered 0.71 g/t gold, 2.60 g/t silver and 0.15% copper
over 252 metres in hole IM 10-13 (KSK News Release, November 2, 2010); 0.73 g/t gold, 2.49 g/t
silver and 0.11% copper over 135 metres in hole IM11-18 (KSK News
Release, September 14, 2011) and 1.00
g/t gold, 2.29 g/t silver and 0.12% copper over 161 metres in
IM11-20 (KSK News Release, October 6,
2011). The Breccia Zone has been extended by drilling over an
area approximately 400 by 700 metres and remains completely open to
the north. The Howell Zone, 1500 metres northeast of the Breccia
Zone, is defined by highly anomalous copper-gold soil and rock
geochemistry, outcrops of mineralized breccia and monzonite
intrusive rock, and a strong magnetic high anomaly - no drilling
has been done on the Howell Zone. Lastly, the Muddy Creek
gold occurrence, an Intrusion Related Gold system geologically
distinct from the Whistler and Island Mountain porphyry systems, is
comprised of sheeted, centimetre-wide gold-sulphide veins in
fractured monzonite intrusive with grab samples (5 to 10
centimetres wide) ranging from 2 to 14 g/t gold and localized,
meter-wide shatter zones with grab samples (5 to 10 centimetres
wide) up to 30 g/t gold, encompassed in a 3200 metre by 3200 metre
area. This large area, which has the geological potential to host
both high-grade gold structures and/or a low-grade bulk tonnage
system, has only been targeted by three drill holes, with results
including 0.43 g/t gold over 38.8 meters in hole MC11-001 and 0.44
g/t gold over 44.2 metres in MC11-002 (KSK News Release,
December 15, 2011).
The Whistler Deposit, Whistler Orbit and all named prospect
areas within the Whistler Property present opportunities to further
expand the gold-copper resource base on the project. New
exploration will incorporate an in-depth review, fresh analyses and
integration of the considerable trust of geophysical, geological,
drilling and assay data, along with new prospecting and geophysical
surveys. Deep penetrating IP, seismic and gravity surveys will be
considered to map structure, better determine the geometry of
established targets, identify new targets, and to prioritize future
exploration and development drilling.
Further information concerning the progress of the proposed
transaction will be disclosed in due course. Take note that the
transaction contemplated by the LOI is subject to numerous
conditions, and there is no certainty that it will be completed on
the schedule or in accordance with the terms described in this News
Release. Accordingly, investors should use caution when trading in
the securities of both AER and KSK.
Michael Roberts, Ph.D., P. Geo.,
Vice President of Exploration for KSK has approved the technical
content of this news release and is a Qualified Person under NI 43
-101.
Forward Looking Statements: This News Release contains
forward looking statements that are subject to a number of known
and unknown risks, uncertainties and other factors that may cause
actual results to differ materially from those anticipated in our
forward looking statements. Factors that could cause such
differences include: changes in world commodity markets, equity
markets, costs and supply of materials relevant to the mining
industry, change in government and changes to regulations affecting
the mining industry. Forward-looking statements in this release
include statements regarding future exploration programs, operation
plans, geological interpretations, mineral tenure issues and
mineral recovery processes. Although we believe the expectations
reflected in our forward looking statements are reasonable, results
may vary, and we cannot guarantee future results, levels of
activity, performance or achievements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Alternative Earth Resources Inc.