SOURCE: Logan Resources Ltd

Logan Resources Ltd

July 07, 2016 12:46 ET

Logan Resources Options Nine Prospective Gold Exploration Properties From Pilot Gold

VANCOUVER, BC--(Marketwired - July 07, 2016) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR RELEASE TO U.S. NEWSWIRE SERVICES

Logan Resources Ltd. (TSX VENTURE: LGR) ("Logan" or the "Company") announces it has entered into an option agreement (the "Option Agreement") with Pilot Gold (USA) Inc. ("Pilot Gold") to acquire up to an 80% interest in certain gold mineral exploration properties located in Nevada and Utah, USA (the "Transaction").

The Option Agreement provides for Logan to evaluate a total of nine exploration properties (the "Properties") over a 12 month period. At the end of the 12 month period, provided that the initial expenditure requirements have been met, Logan will select four of the nine properties to earn a 51% interest in those properties and will proceed to conduct further exploration and development work on those properties with a view to increasing its ownership interest. The remaining five properties will be returned to Pilot Gold. The Properties are located among some of the most prolific gold-bearing districts in the world, including the Cortez Trend, the Eastern Calderas, and the Long Canyon Trend.

Details of the Transaction

  • Logan can earn a participating interest of up to 80% on four of the nine Properties:
    • Logan may earn a 51% participating interest in four of the nine Properties by:
      • incurring US$1 million in cumulative exploration expenditures within 12 months after the closing of the Transaction (this includes reimbursing Pilot Gold for 100% of the 2016 annual holding costs paid by Pilot Gold to date for the Properties);
      • delivering common shares of Logan equal to 9.9% of the issued and outstanding common shares after the closing of the Offering (defined below); and
      • selecting four of the nine Properties (the "Selected Properties") and returning the other five to Pilot Gold with a minimum of one year of the holding costs paid for by Logan.
    • Logan can earn a 70% interest in the four Selected Properties by incurring additional expenditures of US$2 million within 36 months of the closing date, and arranging for one million common shares of Logan to be delivered to Pilot Gold.
    • Logan will then have the additional option to earn an 80% interest in any of the Selected Properties that it completes a prefeasibility study on.
  • Once Logan earns its 80% interest in a Selected Property, or earlier if Logan has earned at least a 51% or 70% interest and declines to exercise it additional option(s), Logan and Pilot Gold shall form a joint venture and each party will thereafter be responsible for its pro rata share of expenditures on the Selected Property.
  • The Transaction is conditional upon Logan completing a financing, the terms of which are described below.
  • Pilot Gold has agreed to certain transfer restrictions and orderly sale provisions with respect to the common shares of Logan that will be issued to it in connection with the Transaction.
  • No finder's fees are payable for the Option Agreement.
  • The Transaction is subject to regulatory approval, including the approval of the TSX Venture Exchange.

Financing

In conjunction with the Transaction, Logan intends to undertake a non-brokered private placement to raise up to a total of C$2,000,000 consisting of 20,000,000 units (the "Units") at a price of C$0.10 per Unit (the "Offering"). Each Unit will consist of one common share and one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall be exercisable to acquire one common share for a period of 36 months at an exercise price equal to $0.30.

The Company intends to use the net proceeds of the Offering to continue to evaluate and explore the Properties and for general corporate and working capital purposes.

The Offering will be non-brokered; however, the Company may pay finder's fees in accordance with the rules and policies of the TSX Venture Exchange. The Offering is subject to the approval of the TSX Venture Exchange.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

Brief Description of the Nine Properties

The Griffon property is a past producer consisting of 89 claims located along Nevada's Cortez Trend. Approximately 100,000 gold ounces were mined by Alta Gold, from two pits in the 1990s.

Griffon is located at the southern end of the Battle Mountain - Eureka Trend and is a typical Carlin-type sediment-hosted gold property. Disseminated gold mineralization occurs in siltstone and shale of the Mississippian Chainman Formation and in a sequence of fine-grained limestone and siltstone interpreted to represent an upper member of the Mississippian Joana Limestone.

Past exploration on the Griffon property focused on discovery and delineation of the two distinct historic gold deposits. Very little exploration work was done on peripheral targets after the initial discoveries.

The property has been permitted for 30 drill holes and a bond is in place. Targets include known extensions to the existing pits and other anomalies as defined by soil and rock geochemistry.

The Drum property is located in the Drum Mountains of west-central Utah, adjacent to the historic Drum mine property which operated between 1984 and 1989 and produced over 126,000 ounces of gold from two distinct "Carlin-type" gold deposits that averaged 0.04 ounce Au per ton (1.37g/t Au).

The property has been mapped and sampled and drill targets have been identified in five areas on the property based on rock and soil geochemistry. Lower Cambrian carbonate and fine-grained clastic strata are the projected host rocks in all of these target areas.

Gold in surface samples is strongly associated with silicification (jasperoid). This is similar to the historic Drum Mine, where gold-bearing jasperoid outcrops occur in the vicinity of the main deposit, in which the host rocks consist of strongly clay-altered strata and altered dikes. On the claims, gold concentrations in outcrops of jasperoid and variably silicified breccias are commonly between 0.10 and 1.00 ppm, with a maximum of 5.2 ppm Au. Antimony and bismuth display the strongest correlations with anomalous gold.

The Easter property is located in Nevada's Eastern Calderas. The property contains a historical mineral resource estimate which is set out in the table below.

Resource Classification  AuEq
Cut-off (ppm)
 Tons
(M)
 AuEq
(ppm)
 Au (ppm)  Ag (ppm)  Au Contained
(k oz)
 Ag Contained
(k oz)
Indicated  0.35  2.64  1.542  1.323  14  101.7  1,077
Inferred  0.20  1.321  1.142  12  6.7  71

The mineral resource estimate was the subject of a technical report prepared by SRK Consulting for La Quinta Resource Corp. and dated July 13, 2010. However, a qualified person for the Company has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources. In order to verify the historical estimate, the Company needs to retain a qualified person to review the historical data, review any work completed on the property since the date of the estimate and complete a new technical report.

The SRK mineral resource estimation was based on a geologic model of mineralization hosted within a 0.3ppm Au grade shell constructed using Leapfrog® software. The grade shell was used to constrain the resource estimation within a block model constructed with 15ft cubic blocks. The raw drill assays were capped prior to compositing into 15ft bench composites. Gold was capped at 6.5ppm and silver was capped at 70ppm. The grade estimation used an inverse distance squared weighting algorithm. A two pass estimation was run for both gold and silver. The first pass assigned grade to all blocks hosting a composite. The second pass was allowed to search within the grade shell to a maximum of 200ft down dip, 150ft along strike and 30ft across strike and dip. A minimum of three and maximum of eight composites were used with a restriction of only two samples per octant to assign grade.

The resources were classified according to CIM guidelines as Indicated and Inferred Mineral Resources. The Indicated Mineral Resource was defined by a wireframe solid constructed about the core of the mineralization were most drilling is spaced 25 to 50ft apart. All blocks located outside of this solid were classified as Inferred Mineral Resources.

The Antelope property consists of 47 unpatented federal lode claims located along Nevada's Long Canyon Trend. Gold-bearing jasperoid of variable thickness occurs locally in the silicified zone and disseminated gold mineralization also occurs locally in the upper Simonson Dolomite. 138 shallow drill holes were drilled by previous operators.

The Anchor property is located along the Cortez Trend and has demonstrated gold mineralization at a relatively shallow depth. Previous surface sampling and drilling suggest that Anchor contains a sediment-hosted, Carlin-type gold system.

The Brik property is located in the Eastern Calderas and has been previously drilled by Pilot Gold in 2011. The property is a volcanic-hosted, low-sulphidation epithermal gold system with oxide gold mineralization exposed in outcrop in at least five distinct target areas.

The Stateline property is also situated within the Eastern Calderas and has demonstrated high grades for gold and silver at surface. There are a large number of veins present and the property is a historic producer.

The Sandy property is a sediment-hosted gold property located in Southern Nevada and consists of 54 claims and has returned high grade surface samples. The property was staked due to structural and stratigraphic similarities to the Long Canyon, Kinsley Mountain and Bald Mountain properties.

The Viper property is located in Northeastern Nevada and represents an emerging off-trend gold district.

Additional Information

In connection with this Transaction, Mark Morabito and Mark Lotz will immediately join the Board of Directors. Mr. Morabito will also take over for Mr. Stewart Wallis as President & CEO of the Company. Mr. Morabito has a long history of raising capital and successfully advancing North American mineral projects from exploration through to the completion of the permitting process. Mr. Lotz is a Chartered Accountant with 18 years of experience primarily in the minerals industry and related securities businesses. He has held CFO positions with several well-known mining and exploration companies. He has also served as a senior executive officer for two Vancouver based securities firms and a financial compliance officer for the Vancouver Stock Exchange.

Prior to the execution of the Option Agreement, Ms. Evelyn Cox resigned from the Board of Directors of the Company. Ms. Cox is Director, Corporate Communications of Pilot Gold Inc. Ms. Cox declared her interest in the Transaction and abstained from participating in any meetings of the Logan Board of Directors where the Transaction was reviewed and approved. With the resignation of Ms. Cox, the Transaction is being conducted entirely at arm's length. The Board would like to thank Ms. Cox for her contributions as a director.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Mr. Stewart Wallis, President & CEO of Logan, is a Qualified Person ("QP") as defined by National Instrument 43-101. The QP is a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (APEGBC) as a registered Professional Geoscientist (P.Geo.). Mr. Wallis has reviewed and is responsible for the technical information disclosed in this press release.

About Logan

Logan Resources Ltd. is a mineral exploration company that specializes in acquiring, exploring and advancing mineral properties. For more information on the property portfolio and Logan, please visit www.loganresources.ca.

LOGAN RESOURCES LTD.
On behalf of the Board
"Carlo Valente"
Chief Financial Officer

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward looking information contained in this news release includes, but is not limited to, statements with respect to (i) the closing of the Transaction, (ii) the receipt of regulatory approvals, (iii) the prospective nature of the Properties; (iv) the timing and closing of the Offering; and (v) the anticipated use of proceeds of the Offering.

In certain cases, forward-looking information can be identified by the use of words 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" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the estimation of mineral resources, the realization of resource and reserve estimates, gold and other commodity prices, the timing and amount of future exploration and development expenditures, the estimation of labour and operating costs, the availability of necessary financing and materials to continue to explore and develop the Company's properties in the short and long-term and to acquire new properties, the progress of exploration and development activities, the receipt of necessary regulatory approvals, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the exploration and development of mineral deposits, risks relating to variations in mineral resources, grade or recovery rates resulting from current exploration and development activities, risks relating to the ability to access infrastructure, risks relating to changes in uranium and other commodity prices and the worldwide demand for and supply of gold and related products, risks related to increased competition in the market for uranium and related products and in the mining industry generally, risks related to current global financial conditions, uncertainties inherent in the estimation of mineral resources, access and supply risks, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits, financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the exploration and development activities on the Company's properties, or to acquire new properties, may not be available on satisfactory terms, or at all, risks related to disputes concerning property titles and interest, environmental risks and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.

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

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