Klondike Silver Corp.Signs Binding Letter of Intent to Option a Portion of the Silver Slocan Mining Camp, British Columbia
VANCOUVER, British Columbia--(BUSINESS WIRE)-- Klondike Silver Corp. (TSX-v symbol: KS) (the 'Company') is pleased to announce that it has executed a binding Letter of Intent ('LOI') with Victory Mountain Ventures Ltd. (TSX-v symbol: VMV) ('Victory') to option a portion of the Silver Slocan Mining Camp located in south eastern British Columbia. The parties agree to use their best efforts to execute a definitive Option Agreement within 15 days.
The Agreement will allow Victory to acquire a 50% interest in the Silvana West and the Cody Creek claims by making payments to the Company and incurring exploration expenditures over a three year period. At the sole discretion of the Company, Victory will be able to earn an additional 25% of the project by making a lump sum payment of cash and shares to the Company.
Under the agreement, Victory will also be entitled to a royalty payment equal to 50% of net profit received from the sale of any newly discovered resources should exploration prove successful before the three year option has been satisfied. All agreement will be subject to TSX Venture Exchange approval.
The primary exploration focus will be on the silver-lead-zinc expansion potential to the west of the Silvana Mine located centrally in the Silver Slocan Mining Camp. As part of the Option Agreement, Victory and the Company will form a management committee to oversee all the exploration activities on the property, with the Company being the operator.
The map provided at this link (http://www.klondikesilver.com/i/maps/longitude.jpg) illustrates the exploration potential between the Company's Silvana Mine and the Standard & Mammoth Mines which are along strike to the west. The area labeled as the "Prospective Horizon" is where exploration will be focused as the existing underground mine structure will allow for underground drilling to explore the western extension potential.
The second land package offered in the option agreement are the Cody Creek claims located to the northeast and is believed to be along the same strike as the Silvana Mine. Cody Creek has excellent access and exploration potential containing several past producing mines.
With the advantage of modern exploration techniques in this historically productive mining camp, the Company intends to discover new deposits and develop past producing mines in the Slocan Mining Camp.
Option Agreement Terms:
For Victory to acquire a 50% right, title and interest on the Silvana West and Cody Creek claims, as seen in the proposed Option Agreement, it must make an initial cash payment of $75,000 upon signing and then pay 2,000,000 shares to the Company and incur $3,750,000 dollars in exploration costs over a three year period broken down as follows;
Expenditures Incurred by Victory
Shares issued to Klondike
Cash issued to Klondike
Victory's Total Project Interest
At the sole discretion of the Company, Victory will be able to earn an additional 25% of the project by making a lump sum payment of $5,000,000 dollars and issuing 5,000,000 common shares of Victory to Klondike.
About Klondike Silver Corp.
Klondike Silver Corp. has assembled a quality portfolio of silver properties throughout Canada, most notably, in the historic Slocan Mining District southeastern British Columbia. This historic camp has produced more than 24 million ounces of silver since the first discoveries in the late 1800s. Klondike Silver is the dominant land-holder controlling a majority of the historic camp and the fully permitted, 100% owned "Sandon Mining Complex". The Company owns the past-producing Silvana, Wonderful, and Hinckley Mines and several other properties with significant exploration potential.
For additional information please visit the company website www.klondikesilvercorp.com
On Behalf of the Board of Directors
Klondike Silver Corp.
President and Director
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.
This report contains forward looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
KEYWORDS: North America Canada
The article Klondike Silver Corp. Signs Binding Letter of Intent to Option a Portion of the Silver Slocan Mining Camp, British Columbia originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.