GFK Resources Inc.
TSX VENTURE : GFK

December 12, 2013 12:50 ET

GFK Options Strategic Land Package From Adventure Gold

UPPER TANTALLON, NOVA SCOTIA--(Marketwired - Dec. 12, 2013) - GFK Resources Inc. (the "Company" or "GFK") - (TSX VENTURE:GFK), is pleased to announce that it has entered into an option agreement (the "Agreement") with Adventure Gold Inc. ("Adventure Gold"), a Montreal based mining exploration company listed on the TSX Venture Exchange (the "Exchange") under the trading symbol "AGE", pursuant to which GFK has acquired an exclusive option to earn up to a 100% interest in 446 claims covering an area of 22,189 hectares or 222 km2 known as the Casa-Cameron project (the "Project"). The Project includes nine (9) claim blocks strategically located along the prolific Casa-Berardi/Cameron Gold Trend, in the Abitibi Greenstone Belt, Quebec. All the properties are at the drilling stage and an initial 3,000-metres drilling program is scheduled for early 2014.

Under the terms of the Agreement, GFK has the option (the "First Option") to acquire an initial 51% undivided interest in the Project on the following terms and conditions:

  • following the receipt of the required regulatory approvals, paying to Adventure Gold $250,000 and issuing to Adventure Gold 2,000,000 common shares of GFK;

  • sole funding not less than $1,500,000 in exploration expenditures by no later than December 31, 2014 or alternatively, not less than $2,000,000 in exploration expenditures by no later than August 31, 2015 (the "Phase 1 Expenditures");

  • following the completion of the Phase 1 Expenditures, paying to Adventure Gold an additional amount of $1,250,000 in cash or, at the election of GFK, in common shares of GFK, subject to a minimum cash payment to Adventure Gold of $250,000; and

  • sole funding, by no later than August 31, 2018, an additional amount of not less than $3,500,000 in exploration expenditures if the Phase 1 Expenditures were equal to $1,500,000 or alternatively, $3,000,000 in exploration expenditures if the Phase 1 Expenditures were equal to $2,000,000 (the "Phase 2 Expenditures");

Following the completion of the First Option, GFK shall have an additional option (the "Second Option") to acquire Adventure Gold's remaining 49% interest in the Project, thereby acquiring a 100% interest in the Project. The Second Option is conditional upon GFK:

  • paying to Adventure Gold $5,500,000 in cash or, at the election of GFK, in common shares of GFK, subject to a minimum cash payment to Adventure Gold of $500,000 (the "Second Option Payment"); and

  • granting Adventure Gold a production royalty on the Project equal to 2% of the net smelter returns (2% NSR), half (1% NSR) of which can be bought back at any time by GFK, at its sole discretion, for an amount of $1,000,000.

The Agreement contemplates that not more than 35,000,000 common shares of GFK, as its share capital is presently constituted, may be issued to Adventure Gold for the various option payments to be made to Adventure Gold under the First and Second Option. All issuances of common shares to Adventure Gold under the various option payments shall be subject to prior approvals from the Exchange. Furthermore, the Phase 1 Expenditures are a firm commitment of GFK.

Adventure Gold will act as operator for the First Option and will receive an operator's fee equal to 10% of exploration expenditures funded by GFK. The conduct of exploration programs on the Project during the First Option will be governed by a technical committee which shall meet quarterly and be comprised of 2 representatives of GFK and 2 representatives of Adventure Gold. A representative of GFK shall act as chairman of the technical committee and shall have a casting vote on all decisions of the committee.

The closing of the transaction is subject to numerous conditions customary to this type of transaction, including the delivery of the required closing documents and the receipt of the required corporate and regulatory approvals. Given that Mr. Marco Gagnon, President of Adventure Gold, is also a director of GFK, the Agreement constitutes a "Non Arm's Length Party" transaction within the meaning of the policies of the Exchange. As such, GFK will be required to sollicit the approval of its disinterested shareholders which it intends to do by way of written consent as permitted by the policies of the Exchange.

The Casa-Cameron Project

The Casa Cameron Project includes nine (9) gold properties: (1) Casagosic, (2) KLM, (3) Vezza North, (4) Vezza Extension, (5) Bell-Vezza, (6) Sinclair-Bruneau, (7) Florence, (8) Céré-113 and (9) Bachelor Extension (Figure 1). The Properties totaling 446 claims are 100% owned by Adventure Gold, however 74 claims on the Sinclair Bruneau property are subject to a 2% NSR royalty and 43 claims of Florence are subject to a 1% NSR royalty in favour of third parties. The Properties are located north of La Sarre, Amos and Lebel-sur-Quevillon, in the northwest region of the province of Quebec and they are accessible all season by paved and gravel roads.

The Properties straddles segment of the major Casa-Berardi/Cameron gold break between the Casa-Berardi Gold Mine (proven and probable reserves of 9 Mt at 5.5 g/t Au for 1.5M ounces, measured and indicated resources of 12.2 Mt at 4.1 g/t Au for 1.5M ounces and inferred resources of 5.3Mt at 3.8 g/t Au for 572,500 ounces - Hecla Mining (formerly Aurizon Mines), press release, February 14, 2013) and the Bachelor Gold Mine (also currently in operation by Metanor Resources with proven and probable reserves of 843,800 t at 7.4 g/t Au for 200,200 ounces and inferred resources of 426,100 t at 6.5 g/t Au for 89,400 ounces - Metanor Resources, NI 43-101, April 26, 2011). All the Properties contain already identified gold-bearing zones and most of them are also strategically located adjacent and in strike to significant gold mines or deposits (see Figures 1 to 9).

Very few modern exploration works were completed on the Properties from the 1990's to 2008, when Adventure Gold started to acquire the Properties. Gold exploration work conducted by Adventure Gold since then returned very encouraging results and many valuable drill targets were outlined (see AGE's press release dated June 11, 2013 and the technical report (the "Report"") which will be filed by GFK on SEDAR in connection with the transaction and prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101")). As described in the Report, the geological setting of the Casa-Cameron properties appears very favorable for the identification of new high-grade gold-bearing structures or bulk-style deposits. Past exploration work did not entirely test the numerous gold occurrences and many positive historical drilling intersections need follow-up drilling. In addition, new geophysical surveys outlined also quality drilling targets. The authors of the Report recommend significant exploration work including a drilling program totalling 21,000 m including 8,000 m in a first phase.

"We are very privileged to have concluded this important transaction on such an exceptional land package that has taken significant time and the expertise of a large geological team to assemble. In a short period, GFK has become a major player in a very prospective area with a rich history and tradition of gold findings and discoveries. This transaction is very promissing for the future of our company", stated Mr. Patrick Fernet, CEO of GFK.

Highlights of the Properties

Casagosic

The Casagosic property is located 90 km north of the municipality of La Sarre and 17 km east of the Hecla Mining's Casa-Berardi Mine along the proven Casa-Berardi gold bearing deformation zones. Adventure Gold's IP survey carried out recently on this property outlined five (5) IP anomalies oriented east-west which remains untested by drilling (Figure 2). In addition, several till anomalies are found on the southern border of the property, which probably derived from mineralisation included within claim limits. New geological interpretations and results from the Megatem survey performed in early year 2000 suggest also that the stratigraphic level hosting the gold rich VMS of the Estrade deposit is extending on the Casagosic property. This property remained poorly tested since the compilation of historical exploration show that no IP survey and only three drill holes totalling 884 metres were carried out on the property before Adventure Gold's work. Despite the fact that no significant gold value was historically intersected by the drilling in some areas, the high priority IP and Megatem anomalies identified in a favorable geology, and not drilled, still deserve additional drill testing.

KLM

The KLM property is located some 24 km north of the former town of Joutel and 55 km southwest of Matagami. Compilation of historical drilling reveal a strong gold potential associated with the KL zone located on this property which remained to be drill tested below the 200 m level and laterally (Figures 2 and 3). At this time, the gold bearing system has been followed along a lateral distance of 470 m and down to depth of 150 m with an average thickness of 8 m. Gold is associated with disseminated pyrite and arsenopyrite ranging from 1 to 5% in silicified and locally sericitised zones. Drilling activities includes 24 diamond drill holes (5,534 m in total). In the gold zone, highest analytical results returned 11.5 g/t Au over 0.4 m (AR-88-KL-4) and the lowest gold intercepts returned 0.01 g/t Au over 4.9 m (hole AR-88-KL-6) For more details about the KL zone, please see the Report. KL gold zone, which is known from numerous drilling intersections, include these intercepts:

  • 1.4 g/t Au over 10.4 m including 3.5 g/t Au over 2.5 m (hole KL-2);

  • 1.1 g/t Au over 9.5 m (hole AR-87-KL-2);

  • 1.3 g/t Au over 6.7 m including 4.2 g/t Au over 2.0 m (hole AR-88-KL-4);

  • 1.5 g/t Au over 7.4 m including 4.4 g/t Au over 1.3 m (hole AR-88-KL-3);

  • 1.2 g/t Au over 10.1 m (hole AR-89-KL-13);

  • 1.6 g/t Au over 10.0 m including 3.0 g/t Au over 5.0 m (hole AR-89-KL-14);

  • 1.1 g/t Au over 6.9 m including 2.7 g/t Au over 1.9 m (hole AR-89-KL-16).

Vezza North

The Vezza North property is located 27 km south of Matagami and 152 km north of the town of Amos. This property encompasses 14 km of the Casa-Berardi North/Cavalier deformation zone and includes the Serem and Hecla West Gold Zones (Figures 4 and 5). Gold is associated with quartz-carbonate veins with occasional tourmaline and disseminated pyrite and arsenopyrite. Historical drilling includes 44 diamond drill holes (9,481 m in total). In the gold zones, highest intercepts returned 11 g/t Au over 4 m (hole A-20) and the lowest intercepts returned 0.6 g/t Au over 3.2 m (hole A-06). Low grades to no significant value were intersected outside of the gold zones presented on Figure 5. Further drilling is required on the property to test the extension of the known gold system below the 200 m level and laterally, over a distance of at least 600 metres (for more details about these zones, please see the Report). The best drilling intersections are:

  • 1.4 g/t Au over 36.1 m including 11.0 g/t Au over 4.0 m (A-20);

  • 2.1 g/t Au over 8.5 m including 4.5 g/t Au over 3.4 m (200E-2);

  • 1.9 g/t Au over 3.1 m including 11.0 g/t Au over 0.3 m (100E-1);

  • 1.8 g/t Au over 4.0 m including (200E-1);

  • 1.9 g/t Au over 3.5 m (A-04)

Vezza Extension and Bell-Vezza

The Vezza Extension property is located 27 km south of Matagami and 152 km north of the town of Amos. The Bell-Vezza Property is located 27 km southeast of Matagami, 110 km north of the town of Amos and 65 km northeast of Lebel-sur-Quevillon. The Vezza Extension and Bell Vezza properties straddled respectively 11 km and 6.5 km of the Casa-Berardi - Cameron deformation corridor (Figure 4). These properties host four (4) ductile deformation zones with a strong potential for gold mineralization. Both properties are located in the same geological environment of the Vezza Gold Deposit (measured and indicated resources of 1,249,900 t at 6.5 g/t Au for 261,000 ounces and inferred resources of 435,800 t at 4.9 g/t Au for 68,540 ounces - Maudore Minerals, Press Release May 6, 2013). Adventure Gold's recent IP survey has outlined three (3) IP anomalies on the Bell-Vezza property forming an IP axis oriented west-northwest trend to be directly associated with historical drill gold intersections (NY-88-06: 1.7 g/t Au over 1.5 m and NY-88-05: 1.0 g/t Au over 0.8 m - GM48500). These three (3) areas combined increase of chargeability and resistivity and are considered as priority drilling targets. The IP anomalies are also located in strike with A Zone, RJ, RJE zones and East Zone of the adjacent property. Historical drilling includes 22 diamond drill holes (4,459 m in total) on Bell-Vezza property and 39 diamond drill holes (8,652 m in total) on Vezza Extension. Historical drilling and gold distribution on the Vezza Extension is presented on the Figure 6. Many drill holes intersected low grades to no significant value however the hole (89-VZA-08) returned very positive results: grading 4.5 g/t Au over 11.0 m including and 6.9 g/t Au over 7.0 m. This gold intercept has been tested only locally to a depth of 200 m. New gold targets identified on both properties clearly deserve follow-up drill testing (for more details, please see the Report).

Sinclair-Bruneau

The Sinclair-Bruneau property is located 40 km northwest of Lebel-sur-Quévillon. The property which covers 12 km of the Casa-Berardi - Cameron deformation corridor (Figure 7) is located nearby the Discovery gold deposit (measured and indicated resources of 1,282,000 t at 5.8 g/t Au for 237,100 ounces and inferred resources of 1,545,500 t at 5.9 g/t Au for 294,500 ounces - Cadiscor, NI 43-101, August 01, 2008) and the Flordin gold deposit (measured and indicated resources of 2,823,000 t at 1.8 g/t Au for 166,100 ounces and inferred resources of 2,199,000 t at 2,0 g/t Au for 137,600 ounces - North American Palladium, NI 43-101, August 24, 2011). The property presents four (4) high potential areas to be follow-up from ground geophysics (IP and Mag) and drilling. One drilling intersection returned 3.1 g/t Au over 4.6 m (hole 35 - GM 07964 in strongly pyritised and carbonated horizons, at the contact of a sheared andesite injected with quartz porphyry dikes close to an alkaline intrusive intruding a ductile fault system. This geological setting constitute a favorable context for gold occurrence similar to the Douay gold deposit (see Figure 1 - measured and indicated resources of 2.8 Mt at 2.8 g/t Au for 238,000 ounces and inferred resources of 115 Mt at 0.8 g/t Au for 2.8 M ounces - Aurvista Gold, NI 43-101, August 10, 2012). Historical drilling includes 92 short diamond drill holes (6,969 m in total) on the property. Low grades gold to no significant value were intersected outside of the gold intercepts highlighted on the Figure 7). Many historical drill holes were testing base metals targets and drilling is warranted on the new gold targets. For more details about the targets, please see the Report.

Florence

The Florence property is located 23 km north of Lebel-sur-Quévillon. The property encompasses 14.5 km of the Chieftain shear zone, which is a subsidiary fault of the Casa-Berardi/Cameron gold deformation zone (Figure 7). On the property, drilling activities includes 36 diamond drill holes (6,073 m in total).Drill intersection as high as 1.0 g/t Au over 18.9 m including 2.9 g/t Au over 3.9 m and 2.8 g/t Au over 4.2 m (Hole 91-7) (GM55861) was intersected in the Chieftain shear zone. This shear zone was poorly tested by drilling and neither was its extension at depth below the 125 m level and its 300 m in width. Drilling activities includes 36 short diamond drill holes (6,073 m in total) on the property. Low grades gold to no significant value were intersected outside of the gold intercepts highlighted on the Figure 8). Also of interest, its southeast extension remained untested over seven (7) km long. This area shows historical showings and its potential was enhanced by the discovery of new gold showing by Adventure Gold returning 3.2 g/t Au, 0.7 g/t Au and 0.4 g/t Au in grab samples. This area remains to be better defined by additional prospecting, sampling and new geophysics. The property present also a significant base metals potential hosting the same stratigraphy of the Langlois Mine currently in operation by Nyrstar with a probable reserves of 5.1 Mt at 9.5 % Zn, 0.7% Cu and 47.6 g/t Ag (Nyrstar's website). For more details about the Florence property, please see the Report.

Cere-113

Céré-113 property is located some 75 km northeast of Lebel-sur-Quévillon. The property is located at ten (10) km southwest from the Bachelor Mine (currently in operation by Metanor Resources) and presents a similar geological environment to Bachelor. Historical drilling reveals a gold bearing east-west shear zone, several hundred meters thick by 2 km long (Figure 9) with historical near surface drill intersections returning 4.1 g/t Au over 1.3 m (Hole NW-3), 1.8 g/t Au over 1.9 m (Hole Nel-92-03) and 1.3 g/t Au over 2.8 m (Hole NC-05) (GM52721-51388 and 52528). In this gold system, Adventure Gold's C-10-01 drill hole intersected strong sericite and carbonate alteration associated with pyrite and anomalous gold returning 1.4 g/t over 0.3 m, 0,9 g/t Au over 1.0 m and 1.8 g/t over 0.6 m close to reddish syenite dykes similar to the Bachelor Lake mine dykes. A total of 26 holes (total of 4,501 m) were drilled and outlined the gold structure over more than 2 km. Low grades gold to no significant value were intersected outside of the gold intercepts highlighted on the Figure 9). This gold system needs follow-up drilling to test its extensions close to the surface. For more details about the Cere-113 property, please see the Report.

Bachelor Extension

Bachelor Extension property is located 90 km north of Lebel-sur-Quevillon. The property bears an interesting mining potential linked to its stratigraphic and structural context by hosting the Lamarck-Wedding deformation zone (Figure 9). Notably, the property resides at the same stratigraphic level as the Bachelor mine and the former Lac Shortt mine (2,700,000 t at 4.6 g/t Au for 400,000 ounces of gold - Roy and al., 2010) and covers both the eastern and western extension of the Perry Showing (intersect of 1.4 g/t Au over 19.9 m including 8.3 g/t Au over 3.0 m in hole WJ-98-19 - GM56598), which is itself located on adjacent claims (Figure 9). Drilling activities includes only eleven (11) diamond drill holes (1,896 m in total) and no significant value were intersected. In addition, the reprocessing of historical IP surveys (GM52620-52929) has outlined several high-chargeability anomalies scattered over the whole property. At least five (5) of these anomalies, not tested by drilling, are associated with Mo-Au-Cu-Zu enrichment in bedrock. Accordingly, this property deserves further exploration work. For more details about the Bachelor Extension property, please see the Report.

Mr. Denis Chénard, P.Eng., is acting as qualified person (as defined by NI 43-101) for GFK and has reviewed and approved the scientific and technical information in this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Information:

This press release contains or may be deemed to contain "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements (express or implied) relating to the completion of the acquisition, the future financial or operating performance of GFK, its properties and/or its projects. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, its properties and/or its projects to be materially different from those expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such 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. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. It should also be noted that mineral resources that are not mineral reserves do not have demonstrated economic viability.

Figures are available at the following addresses:

http://media3.marketwire.com/docs/917508_8_11.pdf / http://media3.marketwire.com/docs/917508_12_14.pdf

Contact Information

  • Source:
    GFK Resources Inc.
    Patrick Fernet, CEO
    902-826-1579
    902-826-2550 (FAX)