Highlights:
• Proximity to licensed, operating processing plants using both conventional an in-situ recovery.
TONOGOLD Resources Inc (OTC: TNGL) (“TONOGOLD” or the “Company” advises it has entered a term sheet to acquire 100% of the issued shares of JAG Minerals Pty Ltd which has a 100% interest in JAG Minerals USA Inc. (“JAG US”). This acquisition will allow TONOGOLD to accelerate development and exploration of the Marysvale (hardrock uranium/vanadium mine), SKY Project (uranium roll front) and thirteen (13) historic high-grade vanadium/uranium mines in Montrose County, Colorado and San Juan County, Utah.
Figure 1: Project and Process Mill location.
MARYSVALE PROJECT
• Marysvale Project was drilled by Phillips Uranium between 1977 – 1981 and this project has a historical working and pre-2007 NI 43-101 resource.
• Favorable geology with mineralization occurring from surface to a depth of at least 500 ft in strong clay-altered Rhyolitis Volcanics. (Refer Figure 2).
• Drilling intersected anomalous uranium and vanadium in multiple zones.
• 127 historical drill holes were completed by Minex, Phillips Uranium and Trigon Exploration Ltd between 1997 – 2007 (refer Figure 3: Marysvale Historic Drilling locations).
• Follow up drilling is required to confirm the pre-2007 resource estimates and test identified new zones.
Figure 2: Marysvale geology and mineralization.
Figure 3: Marysvale Historic Drilling locations.
Several drillholes intersected anomalous uranium mineralization in multiple zones. The five best intercepts are listed in Table 1.
Table 1: Historic drilling intercepts.
SKY PROJECT
Figure 4: Sky location Map.
• 161 historical reverse circulation (RC) drill holes which defined the exploration trend at an average drill hole spacing of 200 ft (Figure 5).
• Strathmore 2007 NI 43-101 Compliant Mineral Resources.
• Mineralization is open to the North and South.
• Core technical studies conducted by Pathfinder (1979) to characterize physical and chemical conditions proved consistency along strike of mineralization. Study concluded the mineralization is conducive to In-situ extraction.
Figure 5: Sky historical RC drilling.
STATELINE
Figure 6: Stateline location map.
• Past production from this region as some of the highest vanadium (V205) percents known in North America:
• Nearby mines have demonstrated historical grades can be replicated with modern mining techniques.
• Land package includes thirteen (13) historic producing uranium and vanadium mines (mining took place between 1945 – 1971 (Figure 7).
Figure 7: Location of historic mines.
KEY TERMS IN AGREEMENT
• The Buyer will purchase, and the Seller will sell, the full legal and beneficial interest in 100% of the issued and outstanding shares of the capital of the company.
• Purchase price is subject to TONOGOLD having a 90-day due diligence period with the agreed price being US $6,500,000.
• The purchase price will be made up of US $4,500,000 in in TONOGOLD shares at a deemed issue price equal to the volume weighted average price (VWAP) for the 15 trading days prior to signing of a Stock Purchase Agreement. A further US $2,000,000 will be paid to JAG shareholders at the date of settlement.
• TONOGOLD has an exclusive period of 60 days from the signing of this term sheet. The Buyer has executed the term sheet and has paid the Seller a nonrefundable payment of US $60,000.
RESTRUCTURE UPDATE
Over the last year, the Company has been working on restructuring the capital structure and has made significant progress in doing so. The Company has worked with its Convertible Loan Note (“CLN”) holders to convert their Notes into shares at a price of $0.10/share. At this time, the Company has a significant number of acceptances from the CLN holders and the Company is confident of achieving 100% acceptances in the near-term. This will significantly clean up the capital structure in order to create a situation where the Company can achieve its goals going forward. The Company has recently launched a $500,000 convertible loan note (“New Note”) and has received funds totaling $160,000 to date.
Key terms of the New Note include:
• Principal and accrued interest will become payable at the end of the Term. The Company has the election to repay the Notes in cash or if such election isn’t made, they will automatically convert into Common Shares of Tonogold at the lower of $0.02 (two cents) per share or 25% discount to the price which the Company issues shares in an equity financing prior to the expiry of the Term.
• Interest rate of 12% pa compounded quarterly and added to the principal balance.
QUALIFIED PERSON STATEMENT
The information contained in this report that relates to Exploration Results, Mineral Resource Estimates, and Mineral Reserves is based on data compiled by Mr. Andrew Hawker, a Member of the Australasian Institute of Mining and Metallurgy. Mr. Hawker is a Geological Consultant for Hawker Geological Services Pty Ltd. He has reviewed and approved the technical information regarding exploration results and Mineral Resource estimates in this news release. Mr. Hawker possesses sufficient relevant experience with the style of mineralisation and type of deposit under consideration, as well as the activity being undertaken, to qualify as an independent Qualified Person as defined by NI43-101. The information in this report regarding Mineral Reserves is also based on data compiled by Mr. Hawker. He consents to the inclusion of this information in the report in the form and context in which it appears.
ENQUIRIES
William Hunter
Interim CEO Tonogold Resources Inc.
M: +1 203 856 7285
bhunter@tonogold.com
FORWARD-LOOKING STATEMENTS
This press release and any related calls or discussions may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Tonogold. Forward-looking statements are statements that are not historical facts. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements include statements about matters such as: capital raising activities and negotiations; market conditions; future changes in exploration activities, production capacity, and operations; future exploration, production, operating, and overhead costs; production of feasibility studies, technical reports, or other findings related to estimated mineralization; operational and management restructuring activities; capital expenditures (by Tonogold or other parties) and their impact; investments, acquisitions, joint ventures, strategic alliances, business combinations, asset sales; consulting, operational, tax, financial and capital projects, and initiatives; contingencies; environmental compliance and changes in the regulatory environment; offerings, sales, equity dilution, and other actions regarding debt or equity securities; including a redemption of the debenture, and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings, and growth. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “would,” “potential,” and similar expressions identify forward-looking statements, but are not the exclusive means of doing so. These statements are based on assumptions and assessments made by Tonogold management in light of their experience and their perception of historical and current trends, current conditions, possible future developments, and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations, or warranties, and are subject to risks and uncertainties that could cause actual results, developments, and business decisions to differ materially from those contemplated by such forward-looking statements. Occurrence of such events or circumstances could have a material adverse effect on the business, financial condition, results of operations, cash flows, or the market price of Tonogold’s securities. All subsequent written and oral forwardlooking statements by or attributable to Tonogold or persons acting on their behalf are expressly qualified in their entirety by these factors. Tonogold does not undertake any obligation to publicly update or revise any forward-looking statement.
Neither this press release nor any related calls or discussions constitutes an offer to sell or the solicitation of an offer to buy any other securities or Tonogold.