TORONTO , June 18, 2014 /CNW/ - Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) (the "Company") announced that its wholly-owned subsidiary, Atlanta Gold Corporation
("AGC"), has reached an agreement with Knife River Corporation ("KRC") whereby KRC will contract mine on AGC's behalf, certain patented lode
mining claims known as the Neal Property, located approximately 15
miles from Boise, Idaho . Daisy Mining & Land, LLP leased the claims to
KRC which then assigned key provisions of the lease to AGC. AGC staked
an additional seven contiguous claims on public land that was open to
mineral entry.Under the terms of the agreement, KRC will mine and transport the
mineralized materials from the Neal Property approximately 23 miles, to
KRC's property located on Amyx Lane for crushing and delivery to AGC.
AGC will process the materials at the KRC property. In addition to the
contract mining and transportation costs, AGC will be responsible for
payment of a tonnage royalty of US$3 per dry ton of delivered tonnage
and a 3% net smelter return royalty payable to the owner of the Neal
Property.
Processing of the material from the Neal Property will enable AGC to
further test and improve upon the processing equipment and procedures
(described in the Company's news release of June 10, 2014 ) prior to
implementing the process at AGC's Atlanta Project on the bulk sample
scheduled to be taken in 2014. The agreement with KRC will also enable
the processing of material from the Neal Property to continue during
the winter months when the Atlanta Project is largely inaccessible.
To assist in funding the expenditures necessary to acquire the
processing equipment and commence processing, the Company has reached
an agreement with a corporation controlled by Eric Sprott to borrow
US$600,000 . The loan is unsecured and non-interest bearing and is to
be repaid by delivery to the lender of 1,000 troy ounces of gold (or
the cash equivalent thereof) payable in installments over an 18-month
period. The loan will be convertible at the lender's election at a
conversion price of C$0.05 during the initial 12 months and at C$0.10
per share thereafter. The lender will also receive a 5-year option to
purchase, solely from gold produced from the Neal Property, up to 2,500
ounces of gold at US$1,400 per ounce. The financing transaction is
subject to the approval of the TSX Venture Exchange.
"Having property that has access in all seasons with similar metallurgy
to Atlanta will advance the research required to verify the Company's
objective of producing a mined product with the least environmental
impact. This is also an opportunity for the Boise operations to provide
work for seasonal employees to be extended to a longer period. It will
reduce the turnover and attract qualified and experienced personnel.
The network of all involved to achieve this opportunity has been
encouraging," said Ernest Simmons , President and CEO of the Company.
About the Company
Atlanta Gold Inc. holds through its 100% owned subsidiary, Atlanta Gold Corporation,
leases, options or ownership interests in its Atlanta properties which
comprise approximately 2,159 acres (8.74 square kilometres) located 90
air kilometers east of Boise , in Elmore County, Idaho . A long history
of mining makes Atlanta very suitable for development of new mining
projects. The Company is focused on advancing its core asset, Atlanta ,
towards mine development and production.
Forward-Looking Information
This news release contains forward-looking information and
forward-looking statements (collectively "forward-looking statements")
within the meaning of applicable securities laws, including with
respect to the completion of the loan financing, the acquisition of the
processing equipment, the completion of a bulk sample at the Atlanta
Project and the successful application of the process equipment and
system to the mineralized material removed from the Neal Property and
the Atlanta Project, the respective timing thereof and the impact on
recruitment and retention of personnel. Such are based upon
assumptions, opinions and analysis made by management in light of its
experience, current conditions and its expectations of future
developments as well as other factors that management believe to be
reasonable and relevant. These assumptions include those concerning
the receipt of the approval of the TSX Venture Exchange, the
achievement of recovery objectives, the generation of an additional
bulk sample, the completion of additional financings, the availability
of equipment and manpower, the ability to achieve operating and cost
estimates and general business and economic conditions.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ
materially from those expressed or implied in the forward-looking
statements and accordingly, readers should not place undue reliance on
those statements. Risks and uncertainties that may cause actual
results to vary include, but are not limited to, the Company's limited
financial resources and its ability to raise sufficient funds on a
timely basis to fund the capital and operating expenses necessary to
carry out its planned initiatives; the ability to achieve recovery
objectives; fluctuations in resource prices and currency exchange
rates; the speculative nature of mineral exploration and mining
(including with respect to the interpretation of geology, continuity,
size and grade estimates and the recoverability of resource estimates);
operational and technical difficulties which could increase operating
and/or capital costs; risks and hazards associated with the business of
mineral exploration, development and mining, including environmental,
health and safety hazards; changes in laws or regulations and the risk
of obtaining necessary consents, licenses and permits; changes in
general economic conditions and in the financial markets; as well as
other risks and uncertainties which are more fully described in the
Company's annual and quarterly Management's Discussion and Analysis and
in other Company filings with securities and regulatory authorities
which are available at www.sedar.com. Should one or more risks and uncertainties materialize or should any
assumptions prove incorrect, then actual results could vary materially
from those expressed or implied in the forward-looking statements and
accordingly, readers should not place undue reliance on those
statements. Readers are cautioned that the foregoing lists of risks,
uncertainties, assumptions and other factors are not exhaustive. The
forward-looking statements contained in this news release are made as
of the date hereof and the Company undertakes no obligation to update
publicly or revise any forward-looking statements contained herein or
in any other documents filed with securities regulatory authorities,
whether as a result of new information, future events or otherwise,
except in accordance with applicable securities laws.
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NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE Atlanta Gold Inc.