VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 19, 2013) - Precipitate Gold Corp. (the "Company" or "Precipitate") (TSX VENTURE:PRG) is pleased to announce the Company has reached an agreement with Gunpoint Exploration Ltd. whereby Precipitate can acquire a 100% interest in the Cecilia gold-silver project in northeastern Sonora state, Mexico.
Cecilia Project Highlights:
The Cecilia project is a low sulphidation epithermal gold-silver target hosting a large number of historic workings centered on gold-silver bearing quartz veins and breccias. Work by previous operators has included sampling, mapping, trenching, geophysics, and diamond drill programs. Highlight results reported by prior operators include:
- Rock chip samples 101.6 metres grading 0.96 g/t gold, including 30 meters grading 2.0 g/t gold
- Drill hole 88-03 returning 180 metres @ 1.2 g/t gold and 20 g/t silver from surface
- Drill hole 88-04 returning 100 metres @ 0.7 g/t gold and 15 g/t silver
- Rock grab samples reporting up to 52.6 g/t gold and up to 1,128 g/t silver
Widespread low sulphidation epithermal mineralization on Cerro Magallanes is indicative of a complex system that was subjected to several episodes of fluid flow. All prior work, such as that reported above has focused on outcrops of the impressive Cerro Magallanes. However, there is unexplored potential surrounding Cerro Magallanes, particularly on main structural trends beneath shallow cover which is an order of magnitude larger than the known exposure of the Magallanes zone. These peripheral areas have never been explored by modern methods. Precipitate's initial priority will be to confirm many of the existing gold/silver zones and generate new targets "off the Cerro" in search of new and potentially larger zones. For maps and figures detailing sample and drill result locations, click the following links or visit the Cecilia page of the Company's website at www.precipitategold.com:
Terms of the Option Agreement:
Precipitate has an option to earn a 100% interest in the four concessions comprising Cecilia. Upon execution of the agreement, but prior to making the first payment, Precipitate has a four month due diligence period, during which time it will have full access to the project and all available data. At the end of the due diligence period, if Precipitate elects to proceed, it can complete the acquisition by making staged payments to Gunpoint as follows:
|At the completion of the due diligence period
||$100,000 and 175,000 shares of the Company
|On or before the 1st anniversary of the initial payment
||$125,000 and 175,000 shares of the Company
|On or before the 2nd anniversary of the initial payment
||$175,000 and 175,000 shares of the Company
Precipitate is not obligated to meet any minimum property expenditures or work commitments, other than those required to keep the concessions in good standing. A 1% Net Smelter Return royalty ('NSR') is payable to the Mexican Government on the three small property inlier concessions.
Jeffrey Wilson, Company President & CEO, states: "We're pleased with the opportunity to compliment the value in our Dominican Republic assets by securing an option to acquire the Cecilia property, as it expands our project portfolio with a more advanced, highly prospective precious metal project in another jurisdiction with rich mineral endowment, year-round exploration access, and favourable mining and taxation policies. This, combined with the agreement's manageable acquisition terms, allows Precipitate the opportunity to attempt to rapidly advance the Cecilia project to a drill stage without onerous payments or expenditure commitments. Cecilia provides another example of our commitment to grow the Company through new opportunities that can maximize shareholder value."
Cecilia's Exploration History:
Cecilia was first explored by the Mexican Geological Survey ("Consejo de Recursos Minerales" or "CRM") in the 1980s. CRM carried out mapping, sampling, geophysics, road building and a small five hole drill program (837 metres) on the eastern side of Cerro Magallanes. Reported highlights of the CRM diamond drill program include hole 88-03 which reported an intersection of 180 metres grading 1.2 g/t gold and 20 g/t silver from surface and hole 88-04 which reported an intersection of 100 metres grading 0.7 g/t gold and 15 g/t silver (after Chesapeake Gold Corp news release December 30, 2004). CRM's surface grab sampling of high grade shoots within structures report grades up to 52.6 g/t gold and up to 1,128 g/t silver. Cambior Inc. optioned the project from CRM and explored it from 1995-1997; a time frame when the price of gold averaged about $US370 per ounce. Work by Cambior reportedly included 19 drill holes likely targeting hypothesized buried porphyry style mineralization. Gunpoint, Chesapeake and Cambior's successor company (IAMGOLD) have no records of the results of Cambior's work. Cambior returned the project to CRM when it exited Mexico in 1997.
Chesapeake Gold optioned the project from CRM in 2004 and carried out mapping, rock chip sampling and a limited IP survey at Cerro Magallanes, plus three reconnaissance soil lines to the south. A highlight rock chip sampling result measures 101.6 metres grading 0.96 g/t gold, including 30 meters grading 2.0 g/t gold. Chesapeake's full set of Magallanes chip, channel and grab rock samples (n=683), covering a rough area of 200 metres by 800 metres, yielded gold values from nil to 106 g/t (with 69 samples >1.0g/t) and silver from nil to 1,445 g/t.
Cecilia's Geological Setting and Regional Background:
Cecilia is located in northeast Sonora Mexico, approximately 35 kilometres ('km') southwest of the United States border city of Douglas, Arizona. The property is within the extensive Basin and Range geological terrain that extends through the states of Arizona and Sonora. This belt of rocks is home to several billion tonne plus copper porphyry deposits; including Southern Copper's Mina Cananea located 40 km to the west of Cecilia and the famous past producing Copper Queen mine located 30 km to the north in Bisbee, Arizona. The Cecilia project is well located, accessible by road, and has no Ejido. Cecilia is comprised of four mineral concessions totalling over 6,434 hectares, currently owed by Gunpoint Exploration Ltd. (TSX VENTURE:GUN), a subsidiary of Chesapeake Gold Corp. (TSX VENTURE:CKG).
Cecilia covers Cerro Magallanes, the dominant topographic feature in the area. Cerro Magallanes hosts a large number of historic workings centered on gold-silver bearing quartz veins and breccias. The mountain itself and other nearby hills are the expression of a large Tertiary aged rhyolite dome complex. Rhyolite is a silica rich rock, highly susceptible to fracturing under stress which creates pathways for later fluid flows, making it a potentially good host for precious metal mineralization. Notable examples of Tertiary age felsic volcanic dome hosted gold-silver deposits include Sleeper in Nevada, La Joya in Bolivia, and El Penon in Chile. At Cecilia, gold-silver mineralization is related to northwest and northeast trending regional structures and associated zones of hydrothermal and structural breccias. Precious metal enrichment is commonly associated with mineral/alteration assemblages of silica, hematite, fluorite, calcite, pyrite, montmorillonite, kaolinite and adularia.
Michael Moore, Precipitate's Vice President, Exploration stated: "We're quite excited to get a chance to investigate this highly mineralized project area. Widespread low sulphidation epithermal mineralization on Cerro Magallanes is indicative of a complex system that was subjected to several episodes of fluid flow. As impressive as Magallanes is itself, it's the potential of the larger project area that most intrigues us. In 2009, Chesapeake ran three north-south reconnaissance soil lines south of Magallanes, testing for masked mineralization beneath shallow cover. The eastern line reported three clusters of elevated gold-silver values with a high of 1,330 ppb gold in soil. The central and western soil lines reported elevated arsenic and other pathfinder element anomalies flanking a smaller rhyolite dome hill south of Magallanes. The soil anomalies, smaller dome and areas of old exploitation concessions west of Magallanes have not been investigated by past workers."
Precipitate has begun planning an initial program of reconnaissance mapping, prospecting and rock-soil-silt sampling that is to commence within a month. Please visit the Cecilia project page on Precipitate's website (www.precipitategold.com) for more information on the existing mineralized zones, maps and figures, and exploration potential of the Cecilia property.
Note: Certain information and data in this news release concerning the Cecilia property and past work done thereon and results therefrom is historical. The reliability of the historical data is unknown but is considered relevant by Company management. The historical data may be non-N.I. 43-101 compliant and should not be relied upon. It is the Company's intention to verify the historical data, however confirmation work may produce results that differ substantially from the historic results. There is a risk that current exploration and test work will not result in the Company replicating historical results. Rock grab samples are selective by nature and are unlikely to represent average grades on the property.
Michael Moore, VP Exploration of the Company and Qualified Person for purposes of National Instrument 43-101 has reviewed the technical information in this news release.
On Behalf of the Board of Directors of Precipitate Gold Corp.,
Jeffrey Wilson, President & CEO
This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects Precipitate Gold Corp.'s ("Precipitate" or the "Company") current beliefs and is based on information currently available to Company and on assumptions it believes are reasonable. 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 Precipitate to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the exploration concessions may not be granted on terms acceptable to the Company, or at all; general business, economic, competitive, political and social uncertainties; the concessions acquired by the Company may not have attributes similar to those of surrounding properties; delay or failure to receive governmental or regulatory approvals; changes in legislation, including environmental legislation affecting mining; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although Precipitate 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. Accordingly, readers should not place undue reliance on forward-looking information. Precipitate does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.