WINNIPEG, MANITOBA--(Marketwired - Jun 17, 2014) - Gossan Resources Limited (TSX VENTURE:GSS)(GSR.F) (Frankfurt/Freiverkehr Xetra:WKN 904435) has received a $350,000 cash payment from Claim Post Resources Inc. (TSX VENTURE:CPS) pertaining to the sale of its Manigotagan Silica Frac Sand Project, comprised of 9 quarry leases located near Seymourville, Manitoba. On June 18, 2013, Gossan agreed to sell the Manigotagan Project to Claim Post under the terms of a sale agreement. Gossan has previously received 3,000,000 common shares of Claim Post and the agreement requires two further cash payments of $350,000 due December 18, 2014 and $430,000 due June 18, 2015, as well as, a royalty interest.
An initial annual advance royalty payment of $50,000 becomes payable as of June 18, 2016, unless the operation has commenced commercial production resulting in the payment of production royalties. All frac sand produced, sold and paid from the nine Manigotagan leases is subject to a $1.00 per tonne production royalty payable quarterly and all other products are subject to a $0.50 per tonne production royalty. Although the royalty is solely payable on production from the Manigotagan leases, the agreement also provides for a minimum production royalty from both the Manigotagan and the adjacent Seymourville Property held by Claim Post, based on their relative remaining mining reserves of frac sand. Claim Post can acquire one-half of Gossan's production royalty interest for $1.5 million at any time after making all of the required property payments.
Claim Post has conducted an independent, NI 43-101 Technical Report and Resource Estimate on the Seymourville Silica Sand Project, prepared by P & E Mining Consultants Inc. ('P&E"), which was filed on SEDAR on June 13, 2014.
In P&E's opinion, the drilling and assaying of the Seymourville project supporting this resource estimate are sufficient to indicate reasonable potential for economic extraction and thus qualify it as a Mineral Resource under CIM definition standards. The mineral resources were classified as Inferred based on existing drill hole spacing. The resulting resource estimate is summarized below:
| |
Table 1.1
Mineral Resource Estimate Statement(1-4) |
| Tonnes |
|
SiO2 (%) |
|
Al2O3 (%) |
|
Fe2O3 (%) |
| 25,959,000 |
|
94.31 |
|
1.94 |
|
0.91 |
| (1) |
|
Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. |
| (2) |
|
The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category. |
| (3) |
|
The mineral resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council. |
| (4) |
|
Preliminary screening at SGS labs in Lakefield Ontario indicates approximately 80% of the sand/clay matrix is in the frac sand size range of 20 to 140 mesh. |
Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no guarantee that all or any part of the mineral resource will be converted into mineral reserve. Confidence in the estimate of Inferred mineral resources is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure at this time.
Douglas Reeson, President of Gossan Resources stated: "Claim Post's initial NI 43-101 resource calculation has defined an Inferred Resource of over 25 million tonnes silica sand on the Manigotogan Silica Frac Sand Project, which if put into production should provide significant royalty payments over the next two decades. Gossan also participates in the development of the Seymourville Project through its equity holdings in Claim Post."
Claim Post anticipates developing the Seymourville Deposit as a source of frac sand for use as a proppant in hydraulic fracturing in the oil and gas industry. The technical report recommends a work program budgeted at $1,600,000 which includes 80 drill holes to an average depth of 25 metres, API-ISO and beneficiation testwork, as well as, preliminary engineering and economic analysis (PEA). On June 17, 2014, Claim Post announced the closing of a private placement totaling $1,753,360.
MaryAnn Mihychuk, P.Geo., is a director of Gossan Resources. She is a qualified person as defined by NI 43-101 and she has reviewed the technical contents of this news release.
Gossan Resources Limited is engaged in mineral exploration and development in Manitoba and northwestern Ontario. It has a well-diversified portfolio of properties hosting gold, platinum group and base metals, as well as the specialty and minor metals, vanadium, titanium, tantalum, lithium and chromium. The Company also has a large deposit of high-purity, magnesium-rich dolomite. The company trades on the TSX Venture and the Frankfurt/Freiverkehr & Xetra Exchanges and has 33,170,400 common shares outstanding.
Neither 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 news release.
For further information, please bookmark www.gossan.ca.