BEDFORD, NS, Jan. 10, 2013 /CNW/ - NSGold Corporation (TSXV: NSX) is pleased to announce that it has signed a Mining Lease and Option to Purchase Agreement ("Agreement") with Cerro Rico Ventures LLC in respect of the Silver Hill property located in Humboldt County, Nevada.
The Silver Hill property is located on the Getchell Trend, a major Nevada linear structure that has provided structural preparation for the introduction of gold and silver mineralization related to Cretaceous intrusive rocks that are found along the trend. Granodiorite intrusive rocks and skarns developed around the intrusive rocks are located near the Getchell (Barrick Gold) and Pinson (Atna Resources) deposits to the north of the property and at the Adelaide deposit (Wolfpack Gold Corp) to the south of the property. The Getchell deposit (approximately 25 miles to the NNE) and Pinson deposit (approximately 20 miles to the NNE) are both multi-million ounce gold deposits with Getchell exceeding 10 million ounces. The Adelaide deposit located approximately 3.5 miles to the SSW has reported historic gold and silver production.
The Silver Hill property is comprised of 36 unpatented claims encompassing a 2,500 to 3,000 foot long shear zone that transects the western flank of Edna Mountain. The presence of silver, copper, arsenic and tungsten in the mineralized shear zone, which is thought to be part of the Golconda Thrust, suggests potential for sediment-hosted and/or skarn-related gold mineralization, similar to the Adelaide and McCoy deposits to the southeast, or possibly related to adjacent intrusive activity and gold-silver mineralization found near skarns at the Chimney Creek, Getchell, Pinson and Preble mines to the north.
Under the terms of the Agreement, NSGold, through its wholly owned subsidiary, NSGold Nevada Inc., may, at any time during the ten-year term of the Agreement, purchase a 100% interest in the Silver Hill property by making a cash payment of US$1,250,000. The Agreement also provides that NSGold is required to make a payment of US$40,000 upon signing, and to make advance minimum royalty payments as follows: US$25,000 on or before the first anniversary of the signing of the Agreement, US$35,000 on or before the second anniversary of signing, and $50,000 on or before the third and subsequent anniversaries. The advance minimum royalty payments will be credited against a 3% production royalty based on net smelter returns from production or sale of minerals. NSGold will have the right to purchase 2% of the production royalty for US$1,500,000 prior to the commencement
of production. The Agreement further provides for certain bonus payments by NSGold in the event that it exercises the purchase option and certain resource thresholds are achieved. A bonus payment of US$1,000,000 will be payable to the optionor if NSGold delineates or publishes a measured or indicated resource on the Silver Hill property compliant with National Instrument 43-101 which includes a contained gold or gold equivalent content in excess of 1 million ounces. An additional bonus payment of US$2,000,000 will be payable by NSGold
to the optionor if the contained gold or gold equivalent content is in excess of 2 million ounces.
NSGold Corporation is a mineral exploration company actively exploring for gold in Nova Scotia, Canada. NSGold's principal property is the Mooseland Gold Property. NSGold's shares are listed on the TSX Venture Exchange under the symbol NSX.
SOURCE NSGOLD CORPORATION