VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 30, 2014) - SILCOM SYSTEMS INC. (the "Company") is pleased to announce that it has entered into two letter agreements whereby it has the exclusive right to enter into option agreements to acquire a 100% interest in each of the Les Etchemins and Sainte Sabine gold properties, which are located 1.5 hours southeast of Quebec City in the Province of Quebec.
The Etchemins property consists of 208 claims totalling 9,986 hectares and the Sainte Sabine property consists of 125 claims totalling 4,827 hectares.
The properties extend for approximately 45 km along the favorable Magog belt stratigraphy (Beauceville, Etchemins and Frontiere formations) and are adjacent and along strike from Golden Hope Mines reported Bellechasse-Timmins gold project with a NI-43-101 compliant resource (cutoff of 0.6 g/t and no capping) containing an indicated category of 2.905 million tonnes grading 3.35 g/t Au (313,900 oz) and an inferred category of 2.173 million tonnes grading 1.46 g/t Au (102,000 oz).
Gold has been known to occur within the Beauce-Etchemins-Bellechasse region in all 3 formations, with the earliest discovery reported in the 1820s. The properties contain near-surface gold occurrences including visible gold and warrant follow up with modern exploration methods. The properties offer excellent potential for a significant gold discovery and has excellent infrastructure consisting of year round road access, water, hydro power and communications. A skilled workforce is readily available within the nearby local towns.
Prior exploration work on the Etchemins property consisted of geological mapping, geophysics and a number of diamond drill holes that confirmed the favourable host stratigraphy, key alterations and had reported gram level gold values. Historical anomalies, and a planned first detailed heliborne Magnetic, Time Domain electromagnetic and radiometric survey, should provide significant exploration guidance, pinpointing lithology unit positioning, geological structures, conducting/resistive characteristics, and potential alteration patterns.
Prior exploration on the Sainte Sabine property included systematic mapping, geochemistry, lithogeochemistry surveys, and diamond drilling with significant multi grams gold values. A detailed heliborne Magnetic, Time Domain electromagnetic and radiometric survey was completed in 2010, and provided vital guidance for locating 11 NQ sized diameter diamond drill holes that were completed in 2011 for a total of approximately 3,900 meters. Frequent extensive and varied alterations (carbonatisation, chlorotization, silicification, sericitization) are apparent in the drill cores, with quartz, carbonate, quartz/carbonate, and chlorite veins, veinlets and/or stockworks, frequently accompanied with disseminated and vein sulfides (pyrrhotite, pyrite, galena, arsenopyrite, sphalerite, chalcopyrite and some bornite).
Quebec is regarded as one of the more exploration supportive jurisdictions and offers on certain exploration expenditures credit rebates of up 35% for flow-though expenditures and up to 43% on non flow though expenditures.
The terms of the Option Agreements for the Company are: for the Etchemins property pay $102,500, issue 1,150,000 common shares and spend $2,775,000 in exploration expenditures over 6 years, of which $42,500, the issuance of 450,000 common shares and $745,000 in exploration expenditures over 2 years is a firm commitment. For the Sainte Sabine property pay $102,500, issue 1,150,000 common shares and spend $1,725,000 in exploration expenditures plus applicable taxes over 6 years, of which $42,500, the issuance of 450,000 common shares and $395,000 in exploration expenditures over 2 years is a firm commitment. Upon exercising the Options each property will be subject to a 2% NSR with a 1% buyback for $1,000,000. The Company has paid the Optionor $5,000 on execution of each letter Agreement.
The Company, which currently has 4,797,128 common shares issued and outstanding, also announces a non-brokered private placement of up to 5,000,000 units at a price of $0.10 per unit, with each unit consisting of one common and one common share purchase warrant exercisable for two years at $0.15 per share.
In addition, the Company also announces a non-brokered flow-through unit private placement of up to 5,000,000 flow-through units at $0.12 per flow-through unit, with each flow-through unit consisting of one flow-through common share and one half of one non-flow through share purchase warrant, each full warrant being exercisable for two years at a price of $0.18 per share.
The proceeds from the sale of the units will be utilized for general working capital, and the proceeds of the flow-through units will be utilized for exploration programs on the Etchemins and Saint Sabine gold projects.
All private placements are subject to a four month hold.
Jacques Marchand, PEng, who is a qualified person as defined by National Instrument 43-101, has approved the geological information reported in this news release.
Silcom is a reporting issuer in the Province of British Columbia, Canada.
On behalf of the Board,
Graeme O'Neill, Director