Emgold Acquires Koegel Rawhide Gold-Silver Property in Nevada
14 February 2012 - 12:00AM
Marketwired Canada
Emgold Mining Corporation (TSX VENTURE:EMR)(OTCBB:EGMCF)(FRANKFURT:EML) (the
"Company" or "Emgold") is pleased to announce that it has signed a Lease and
Option to Purchase Agreement with Jeremy C. Wire to acquire the RHT and GEL
claims, located four miles south of Emgold's existing Buckskin Rawhide claims in
Mineral County, Nevada. The RHT and GEL claims (henceforth called the "Koegel
Rawhide Property" or "Property") comprise 19 unpatented lode mining claims
totaling 380 acres. The acquisition is subject to TSX Venture Exchange approval.
The Koegel Rawhide Property is located approximately 40 miles southeast of
Fallon, in the Rawhide Mining District and Koegel Hills, and five miles
southwest of the Rawhide Mine. The Rawhide Mine is now owned and operated by
Rawhide Mining Company. Formerly operated by Kennecott Minerals, the Rawhide
Mine is reported by Kennecott to have produced 1.47 million ounces of gold and
11.7 million ounces of silver from the years 1988 to 2005. The Property is also
situated six miles south of the Regent Property being explored by Pilot Gold
Corporation. Note that the location of the Koegel Rawhide Property in the
vicinity of Rawhide Mine and other nearby exploration properties does not mean
that a resource will be identified on the Property. However, the presence of
similar geology and mineralized structures on the Buckskin Rawhide, Regent, and
Rawhide properties and historic mine workings in the area are favorable
indicators for the potential of discovery.
This acquisition increases Emgold's strategically located gold-silver properties
in Nevada to two. Emgold now controls 92 unpatented mining claims totaling 1,840
acres in Mineral County in the vicinity of Rawhide Mine. These claims were
either staked by the Company or are under lease option to purchase agreements
with Nevada Sunrise LLC and Jeremy C. Wire, as outlined in previous Emgold press
releases and below.
David Watkinson, President and CEO of Emgold, stated, "We are very excited about
this new acquisition, especially given its vicinity to our Buckskin Rawhide
Project, the Rawhide Mine, and Regent Property. We believe it has similar
potential to Buckskin Rawhide, where we have identified both high grade vein
mineralization and low grade bulk disseminated mineralization. In the event of a
discovery, the Koegel Rawhide Property could be developed as a stand alone
project or in conjunction with the other properties in the area. This
acquisition continues our objective of acquiring quality projects in Nevada, one
of the best mining jurisdictions to work in North America."
Geology and Mineralization of the Koegel Rawhide Property
The Koegel Rawhide Property is situated within the Walker Lane structural zone
and gold belt of western Nevada. The Walker Lane is a regional shear zone of
right lateral strike slip faulting and a known gold trend that hosts large and
small historic and currently operating gold-silver mines, including mines of the
Comstock Lode, Tonopah Mining District and Rawhide Mining District. The geology
and mineralization on the Property are associated with lithologic units and
structures of the Rawhide volcanic center, as well as structures from the Walker
Lane and Basin and Range.
Geologic mapping by Charles P. Watson, a consulting geologist, in the years
1991-1992, indicates the Property is covered mostly by Tertiary (Pliocene) age
intermediate volcanic rocks including andesitic tuff breccias, sills and dikes.
The volcanic units have been folded into minor anticlines and faulted. Faults of
several orientations occur on the Property with north, northwest and northeast
trends. Hydrothermal alteration (clay and silica) is present and is associated
with structures and mineralization.
Gold and silver mineralization is present at Koegel Rawhide, based on historic
randomly spaced surface sampling. A total of 464 samples were taken in
geologically derived locations by consulting geologist Charles P. Watson in the
years 1991-1992. The results of the historic grab samples ranged from
non-detectable to 2 ounces per ton gold, and from non-detectable to 11 ounces
per ton silver. The methods and quality control from the historic sampling are
unknown and cannot be verified under NI 43-101, but the results are considered
reliable for exploration purposes.
Details of the Lease Option and Purchase Agreement
The Keogel Rawhide Property consists of 19 unpatented mineral lode claims
totaling 380 acres, under the jurisdiction of the BLM. The claims are under a
lease and option to purchase agreement dated January 24, 2012 to acquire 100% of
the claims from Jeremy C. Wire, who is the registered owner of the claims.
Emgold has agreed to lease the property from Mr. Wire, subject to the following
payments:
Table 1
Property Payments
----------------------------------------------------------------------------
Year Payment
----------------------------------------------------------------------------
2012 US$10,000 (1)
----------------------------------------------------------------------------
2013 US$10,000 (2)
----------------------------------------------------------------------------
2014 US$10,000 (2)
----------------------------------------------------------------------------
2015 US$20,000 (3)
----------------------------------------------------------------------------
2016 US$30,000 (3)
----------------------------------------------------------------------------
2017 US$30,000 (3)
----------------------------------------------------------------------------
2018 US$60,000 (3)
----------------------------------------------------------------------------
Note: (1) An initial lease payment paid 50% in cash and 50% in Emgold common
shares. (2) Lease payments may be paid in cash or Emgold common shares, at
the discretion of Emgold. (3) Lease payments may be paid in cash or Emgold
common shares, at the discretion of the Lessor. Shares will be issued at
"market value" which means the volume weighted closing price of the shares
on the TSX Venture Exchange or the most senior stock exchange or quotation
system on which the shares are then listed or quoted for fifteen (15)
trading days ending on the date that is five (5) business days before the
applicable payment.
During the lease period, Emgold may conduct exploration and, if warranted,
complete a NI 43-101 Technical Report on the Property. On making the above
payments and completion of the Technical Report, Emgold will acquire 100%
ownership of the property. In the event that commercial production occurs, Mr.
Wire will be entitled to a two percent Net Smelter Royalty on production from
the property. Emgold will retain the right to purchase this royalty for $1
million, less any payments already made.
Information Regarding Emgold
Emgold is currently in the advanced stage of permitting the Idaho-Maryland
Project, located in Grass Valley, CA. The Idaho-Maryland Mine was once the
second largest underground gold mine in California and is reported to have
produced 2.4 million ounces of gold at an average recovered grade of 0.43 ounce
per ton. Emgold has a number of earlier stage exploration properties including
the Buckskin Rawhide Property in Nevada, and the Stewart Property and the Rozan
Property in British Columbia.
For more information about Emgold, the Idaho-Maryland Gold Project and the
Buckskin Rawhide, Stewart, and Rozan Properties, please visit www.emgold.com.
Company filings are available at www.sedar.com.
The scientific or technical information contained in this news release has been
reviewed and approved by Mr. Robert Pease, P.Geo., Chief Geologist of the
Company, a Qualified Person as defined in National Instrument 43-101.
On behalf of the Board of Directors
David G. Watkinson, P.Eng., President & CEO
This release was prepared by the Company's management. This news release
includes certain statements that are "forward-looking statements" within the
meaning of applicable securities laws including statements regarding the
Company's planned work programs, expected results and potential mineralization
and resources on the Koegel Rawhide Property. Forward-looking statements are
based on certain assumptions of the Company, including that the Company has
adequate capital to fund its proposed exploration programs, that actual results
of exploration and development activities are consistent with management's
expectations, that assumptions relating to mineral resource estimates are
accurate, the assumption that metal prices remain at current values, and that
the Company is able to procure equipment and supplies for its planned work
programs Although the Company believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions, such statements
are not guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements. Factors that
could cause actual results to differ materially from those in forward-looking
statements include exploration results that are different than those
anticipated, inability to raise or otherwise security capital to fund planned
programs, changes to metal prices, the price of the Company's shares, the costs
of labour, equipment and other costs associated with exploration, availability
of drilling equipment and operators, development and mining operations,
exploitation and exploration successes, continued availability of capital and
financing, and general economic, market or business conditions. Investors are
cautioned that any such statements are not guarantees of future performance and
actual results or developments may differ materially from those projected in the
forward-looking statements. The Company does not intend to update or revise any
forward-looking information whether as a result of new information, future
events or otherwise, except as required by law. For more information on the
Company, investors should review the Company's filings that are available at
www.sedar.com or the Company's website at www.emgold.com.
U.S. 20-F Registration: 000-51411
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