Arcus Development Group Inc.
TSX VENTURE : ADG

Arcus Development Group Inc.

August 02, 2016 10:40 ET

Arcus to Purchase Dawson Gold Joint Venture Assets

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 2, 2016) - Arcus Development Group Inc. (TSX VENTURE:ADG) ("Arcus") announces that it has concluded an agreement with ATAC Resources Ltd. ("ATAC") under which Arcus will acquire ATAC's 50% interest in the Dawson Gold Joint Venture (the "Joint Venture"). Formed in 2012, the Joint Venture holds four mineral properties, namely the Dan Man, Touleary, Green Gulch and Shamrock properties, all located in the White Gold District of Yukon Territory.

The Dan Man property is located immediately north and adjacent to the Coffee claims, recently acquired by Goldcorp Inc. through its purchase of Kaminak Gold Corporation. The Touleary property is the location of the first significant volcanogenic massive sulphide ("VMS") system identified in the White Gold District of Yukon Territory. Each of the Dan Man and the Touleary properties are described in more detail below.

Property Purchase Agreement

As payment for ATAC's 50% interest in the four Joint Venture properties, Arcus will issue ATAC 10,869,910 common shares and 5,000,000 share purchase warrants. The warrants will entitle ATAC to purchase an additional 5,000,000 Arcus common shares at a price of $0.20 per share at any time within five years of the closing of the transaction. ATAC will also retain a 1% net smelter return royalty interest in any future production from any of the four properties.

The 10,869,910 common shares being issued to ATAC will result in ATAC holding 19.99% of the Arcus issued share capital following the completion of the transaction. As a condition of the 5,000,000 share purchase warrants, ATAC is required to provide both Arcus and the TSX Venture Exchange (the "Exchange") with an undertaking that it will not exercise warrants if doing so will result in ATAC holding 20% or more of the issued Arcus share capital following the exercise of the warrants. The transaction is subject to Exchange acceptance.

"The management of ATAC and Arcus believe that consolidating ownership of the Joint Venture properties will benefit both companies", stated Ian Talbot, the Arcus President. "The Dan Man and the Touleary properties are excellent exploration targets based on location and results to date. However, market interest has been limited based on the previous joint venture ownership of the properties. As the sole owner of the properties, Arcus will be in a position to more readily finance future exploration on both properties. ATAC will directly benefit from any future exploration success through its Arcus shareholding".

Dan Man Property

The Dan Man property is located immediately north and adjacent to Goldcorp's Coffee claims. Arcus has identified four zones of anomalous gold-in-soil responses along an 8 km trend near the Dan Man - Coffee claims boundary. Two of these zones were partially tested in 2011 with a ten hole (1,650 m) diamond drill program.

The four holes drilled at the Kambaa Zone intersected structural alteration characterized by varying intensities of texturally destructive brittle fracturing accompanied by silica flooding, sericitization, partial oxidation and intermittent brecciation. Alteration zones contain moderately to significantly elevated levels of arsenic, antimony and barium relative to the unaltered wallrock background responses. The best assay results from the Kambaa drilling were 2.08 g/t gold across a 4.39 m subinterval within a broader zone containing 1.61 g/t gold across 6.29 m.

The five drill holes at the Kwazulu Zone were located at three sites to test an 800 m portion of the zone containing at least three separate structural trends. Three of the holes tested two northwesterly trending lineaments approximately 600 m apart and encountered significant structural alteration between 35 and 60 m thick. The structural alteration is characterized by intense clay-altered shearing with multi-episodic brecciation and intermittent oxidation. The best assay results from the Kwazulu drilling were 1.63 g/t gold across a subinterval of 8.62 m within a broader alteration zone containing 0.50 g/t gold across 35.52 m.

The structures and alteration encountered in the drill holes at both the Kambaa and the Kwazulu zones have been interpreted as steep, southerly dipping and dominantly associated with northwest trending structural lineaments.

The Dan Man property also hosts two other gold-in-soil anomalies that have not yet been drill tested. The Rooibos and the Bengal zones are both located immediately adjacent to the northern boundary of the Goldcorp Coffee claims. The Bengal soil anomaly represents the strongest gold response defined on the Dan Man property to date and appears to be associated with a northerly trending structural system similar to Goldcorp's Supremo zone located 2.5 km to the south.

Assay values, location maps, drill sections and photos of the Dan Man project can be viewed on the Arcus website (www.arcusdevelopmentgroup.com).

Touleary Property

The Touleary property is located adjacent to the south end of the Kinross White Gold project. Arcus identified the first significant VMS system in the White Gold District during its 2011 diamond drill program. The five hole (935 m) diamond drill program targeted a 300 by 100 m area within a 1,200 m long zone of coincident geophysical and intermittent gold-in-soil geochemical anomalies. All five drill holes contained VMS mineralization, with the best intersection being a 2.25 m interval containing 7.18% copper, 116 g/t silver, 3.55 g/t gold and 4.30% zinc (drilled thicknesses being 70 - 90% of true thicknesses).

Host rocks at Touleary are pervasively sericitized fine tuffaceous felsic-to-intermediate volcaniclastic units with narrow intervals of weakly preserved fragmental textures. These rocks coincide with a laterally continuous linear magnetic low feature identified through a detail airborne magnetic survey. This feature, although structurally offset at a number of locations, can be traced along strike from the VMS discovery for a distance in excess of 5 km.

Assay values, location maps, drill sections and photos of the Touleary project can be viewed on the Arcus website (www.arcusdevelopmentgroup.com).

The technical information in this news release has been approved by Heather Burrell, P. Geo., a senior geologist with Archer, Cathro & Associates (1981) Limited and a qualified person for the purpose of National Instrument 43-101.

On behalf of Arcus Development Group Inc.

Ian J. Talbot, President and CEO

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.

CAUTIONARY NOTE: This news release includes certain "forward-looking statements". Other than statements of historical fact, all statements included in this release, including, without limitation, statements regarding future plans and objectives of Arcus Development Group Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Arcus Development Group Inc.'s expectations are the risks detailed herein and from time to time in the filings made by Arcus Development Group Inc. with securities regulators. Those filings can be found on the Internet at http://www.sedar.com.

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