American CuMo Mining Signs Agreement to Obtain 100% Ownership of CuMo Project and Provides Update on Calida Gold Drill Program
"Executing this mining claims purchase agreement represents a significant milestone and achievement for CuMoCo. Owning 100% interest in the CuMo Project means no longer having to make ongoing payments or pay expensive royalties, allowing the Company to proceed with developing CuMo unencumbered by option agreements and significantly increasing the value of our project", said Shaun Dykes, President and CEO of CuMoCo.
The Claims are unpatented and located in Sections 17 & 18, T8N; R6E in Boise County, Idaho. Certain of the unpatented claims are held in name by Western Geoscience (the "Western Geoscience Claims"), which corporation is controlled by Thomas Evans, and consequently, both entities have been added as parties to the Purchase Agreement. The Option Agreement contained an "area of interest" provision pursuant to which the Western Geoscience Claims became part of the Property.
Under the Option Agreement, the Company granted CuMo Molybdenum a 1.5% Net Smelter Return Royalty ("NSR") interest to a maximum of US$3,000,000 and thereafter a 0.5% NSR in respect of the CuMo Project, and the NSR is to be transferred by CuMo Molybdenum to CuMoCo pursuant to the Purchase Agreement.
The consideration payable for the assigning of all rights and ownership of the Claims to Idaho CuMo and the NSR to CuMoCo is as follows: upon the closing date of the agreement, the sum of US$500,000 in cash, a 7-year term silver convertible debenture in the aggregate principal amount of US$1,000,000 bearing an interest rate of 8.5% per annum and 2.5 million common shares of CuMoCo. Closing of the Transaction is subject to receipt of TSX Venture Exchange approval.
The Company also announces that drilling started last week on its Calida Gold project and to date, the first two holes have been completed and reviewed by the on-site geological personnel. The third hole is well under way and is being drilled from same pad to intersect the zone 30.5 meters (100 feet) to the west of holes one and two. The first hole (C17-01) was drilled into the main vein at a dip of 45 degrees and intersected a 20.4 meter (67 feet) wide mineralized zone between 50.6 (166 feet) and 71 meters (233 feet) that contained visible chalcopyrite. The location intersected matches that which was predicted by the 3D model of historic drilling. The second hole (C17-02) intersected two zones with the thickest between 93.6 (307 feet) and 105.2 meters (345 feet) at a depth of approximately 30.5 meters (100 feet) below the intersection obtained in the first hole.
The core is currently being logged in detail and samples will be sent for assay. Results will be made available as soon as they are received. A total of 60 to 70 holes is planned for the project this year.
Mr. Shaun M. Dykes, M.Sc. (Eng), P.Geo., President and CEO of the Company, is the designated qualified person for the CuMo Project and the Calida Gold project and he prepared the technical information contained in this news release.
CuMoCo is focused on advancing its CuMo Project towards feasibility. CuMoCo is also advancing its newly-acquired Calida Gold project. Management is continuing to build an even stronger foundation from which to move the Company and its projects forward. For more information, please visit www.cumoco.com, www.idahocumo.com and www.cumoproject.com.
For further information, please contact:
American CuMo Mining Corp.
Shaun Dykes, President and Chief Executive Officer
Tel: (604) 689-7902
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this new release.
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation including, but not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, such as the Company's plan to drill 60 to 70 holes at the Calida Gold project this year and the Company's advancement of its CuMo Project to feasibility. Forward-looking information is based on a number of material factors and assumptions, including the result of exploration activities, the ability of CuMoCo to raise additional funds to complete the proposed drill program at Calida and for a feasibility study, that no labour shortages or delays are experienced, that plant and equipment function as specified, that a Court will not intervene with the Company's proposed exploration activities at the Calida Gold project, and the ability of the Company to obtain all requisite permits and licenses to advance the CuMo Project. Forward-looking information involves known and unknown risks, future events, conditions, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future prediction, projection or forecast expressed or implied by the forward-looking information. Such factors include, among others, the interpretation and actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold, molybdenum, silver and copper; possible variations in grade or recovery rates; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing, as well as those factors disclosed in the Company's publicly filed documents, including the Company's Management's Discussion and Analysis for the period ended March 31, 2017. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.