SOURCE: Brixton Metals Corporation

Brixton Metals Corporation

June 22, 2017 09:00 ET

Brixton Metals to Acquire the Past-Producing Hog Heaven Mine from Pan American Silver with Historical Estimate of 47.3 Million Ounces of Silver

VANCOUVER, BC--(Marketwired - June 22, 2017) - Brixton Metals Corporation (TSX VENTURE: BBB) (the "Company" or "Brixton") is pleased to announce that it has entered into an asset purchase and sale agreement with Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American"), to acquire 100 percent interest in the Hog Heaven project, a past-producing silver mine ("Hog Heaven Project") in the State of Montana, subject to Pan American retaining a 3.0% net smelter returns royalty on the Hog Heaven Project.

Highlights:

  • Historical estimate of 47.3 million ounces of silver and 225,800 ounces of gold(1);
  • Past production by Anaconda Mining Company ("Anaconda") (1929 - 1946) of 6.4Moz Ag from 241,000 tons at an average grade of 26.6 troy ounces of silver per ton;
  • Additional past production of 0.46Moz Ag from 49,700 tons, grading 9.35 troy ounces of silver per ton by a lessee from 1963 to 1975; and
  • Ore was shipped directly to smelters.

The agreement provides that Brixton will issue $1 million in common shares of the Company (the "Acquisition Shares") of 2,687,091 shares to Pan American on closing of the transaction (with a deemed price of $0.37 based on a five trading day volume weighted average price of the common shares of the Company trading on the TSX Venture Exchange). The Acquisition Shares are subject to resale restrictions for a period of four months from the closing date of the transaction and no finder's fees are payable in connection with the transaction. Pan American has also agreed to provide notice to the Company of any proposed sale of the Acquisition Shares for one year and Brixton has the right to find a buyer. The completion of the acquisition of the Hog Heaven Project is expected to take place as soon as possible after customary closing conditions are met, including TSX Venture Exchange acceptance of the Acquisition Shares and the receipt by Pan American of the consent from a third party to the transfer of the Hog Heaven Project.

Chairman and CEO of Brixton, Gary R. Thompson stated, "The acquisition of the Hog Heaven Project past producing mine fits well with our strategy of acquiring gold-silver assets in Canada and the USA at reasonably low costs. We believe that based on historical records the potential is high for the discovery of new high grade silver zones with gold and base metals credits on the property. The initial work will be to compile and digitize the historical data and to develop a 3D model and drill targets. The next step would be a drilling campaign to extend the known silver-rich zones, identify new mineralized zones and convert the historic unclassified resource to meet CIM definitions for mineral resources."

A historic silver and gold resource estimate exists for the Hog Heaven Project:

                      
Property  Location  Unclassified  Tonnes
(Mt)
 Ag
(g/t)
 Contained
Ag (Moz)
 Au
(g/t)
 Contained Au 
(000's oz)
Hog Heaven  USA  Historical(1)  2.7  167  14.6  0.62  53.9
Hog Heaven  USA  Historical(1)  7.6  133  32.7  0.70  171.9
               

(1) Based on a historical estimate for Hog Heaven prepared by Gregory Hahn, Chief Geological Engineer for CoCa Mines Inc., a previous owner of the property, in a report titled "Hog Heaven Project Optimization Study" dated May 1989, prior to implementation of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") (as disclosed in Pan American's resource statement that was set out in a news release dated February 17, 2016) and based on diamond drilling. While Brixton considers these historical estimates to be relevant to investors as it may indicate the presence of mineralization, a QP for Brixton has not done sufficient work to classify the historical estimates as current mineral resources as defined by NI 43-101 and Brixton is not treating these historical estimates as a current mineral resource.

In the Hog Heaven Project Optimization Study, the historic estimate was sub-categorized as follows:

          
Category  Tons  oz/ton Ag  oz/ton Au
Proven Reserves  2,981,690  4.88  0.018
Probable & Possible Reserves  904,200  10.40  0.020
Heap Leach Ore  316,100  1.56  0.014
Possible Resources  4,500,000  2.41  0.020
Inferred Resources  2,700,000  4.44  0.022
       

About the Hog Heaven Project

The property is located in Flathead County, 55 miles south-southwest of the town of Kalispell, in the northwest portion of state of Montana, USA. The property is easily accessible by driving 10 miles of gravel road from the highway. The Hog Heaven mine historically (1929 - 1975) produced 6.4Moz Ag from 241,000 tons at an average grade of 26.6 troy ounces of Silver per ton and 0.46Moz Ag from 49,700 tons grading 9.35 troy ounces of Silver per ton. The ore was shipped directly to smelters. The mine was operated by Anaconda from 1929 to 1946 and by a lessee from 1963 to 1975.

Several silver, gold and base metal mineralized zones occur as breccia and veins hosted by permeable units of volcanoclastic rocks. The high-sulphidation mineralization is accompanied by silicification of the host rocks. Silver is the metal of primary interest, although the gold and base metals are significant and could provide by-product revenues.

Mr. Sorin Posescu, P.Geo., VP Exploration, is a Qualified Person as defined under National Instrument 43-101 standards and has reviewed and approved this news release.

Sources: Hog Heaven Mineral Property, Technical Evaluation Report, Robert J. Rodger, October 14, 1984; Hog Heaven Project Optimization Study Report, Gregory Hahn, Chief Geological Engineer for Coca Mines Inc., May 1989.

About Brixton Metals Corporation

Brixton is a Canadian exploration and development company focused on the advancement of its gold and silver projects toward feasibility.

Brixton Metals Corporation shares trade on the TSX-V under the ticker symbol BBB. For more information about Brixton please visit our website at www.brixtonmetals.com.

On Behalf of the Board of Directors

Mr. Gary R. Thompson, Chairman and CEO

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, including statements that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans, or other similar expressions. All statements, other than statements of historical fact included herein including, without limitation, statements regarding the completion of the acquisition, the anticipated closing of the acquisition, TSXV approval for the issuance of the Acquisition Shares, historical unclassified resource estimates are forward looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the need for additional financing; operational risks associated with mineral exploration; fluctuations in commodity prices; title matters; and the additional risks identified in the annual information form of the Company or other reports and filings with the TSXV and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.

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.

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