Nevada Exploration Enters into a Mining Lease and Option to Purchase Agreement on Genesis Gold’s Hot Pot Claims to Consolidate the Kelly Creek Basin Pediment Target
October 13, 2009
Nevada Exploration Inc. (“NGE”) (TSX-V:NGE) is pleased to announce that it has signed a Mining Lease and Option to Purchase Agreement (“Agreement”) with Genesis Gold Corporation (“Genesis”) to acquire a 100% interest on Genesis’s Hot Pot Claims (“Property”), which consist of 254 unpatented mineral claims (approx. 2,000 hectares or 5,000 acres) in the Kelly Creek Basin, in Humboldt County, Nevada. With the addition of the Genesis claims, NGE is now one of the largest property holders in the Kelly Creek Basin.
The Property is located in the center of the Kelly Creek Basin, approximately 5 miles northeast of Newmont’s Lone Tree gold mine and 6 miles north of Goldcorp’s Marigold mine complex, covering a highly prospective and regionally important shallow bedrock target that has seen, and continues to see, considerable exploration activity. The Property lies immediately south of NGE’s extensive KC claim position – 581 claims (approx. 4,700 hectares or 11,600 acres), and 1.5 miles north of NGE’s existing Hot Pot project (approx. 930 hectares or 2,300 acres). NGE’s consolidated Kelly Creek land position now totals more than 76 square kilometers (7,600 hectares or 17,800 acres) (please refer to the map at
Under the Agreement, NGE is the Operator, and NGE has the option to purchase 100% of the Property for USD$1,500,000, subject to a 1.5% Net Smelter Return Royalty (“Royalty”). In consideration, NGE paid the 2009 annual maintenance fees for the Property, and will issue 50,000 common shares to Genesis. Hereafter, NGE may pay the following annual payments to Genesis, in addition to the annual maintenance fees, to maintain the Agreement in good standing: USD$5,000 and 50,000 common shares on the first anniversary; USD$10,000 on each of the second, third, and fourth anniversaries; and USD$50,000 on each anniversary thereafter until the USD$1,500,000 purchase price has been paid in full. NGE may elect to pay up to one half of the annual payments by issuing common shares to Genesis. All annual and royalty payments will be credited against the purchase price. NGE has the right to purchase one half of the Royalty (0.75%) for USD$750,000. All share issuances pursuant to the Agreement are and will be subject to the approval of the TSX Venture Exchange, and will be subject to certain hold periods under applicable securities laws. Approximately 13% (265 hectares or 655 acres) of the Property lie within the 2 mile Area of Interest defined in the previously announced Exploration and Option to Joint Venture Agreement between NGE and International Enexco Ltd. (“Enexco”) (TSX-V:IEC) on NGE’s Hot Pot Gold Property at the southern end of the Kelly Creek pediment target, and as a result this portion of the Genesis claims may be subject to the Enexco Agreement.
The Kelly Creek pediment target is on trend with the regional north-south controlling structural fabric responsible for the mineralization at the Lone Tree and Marigold gold deposits to the south, and the Turquoise Ridge, Getchell, and Twin Creek deposits to the north. The covered target is situated on the largest gravity anomaly between these major areas of gold mineralization and it has seen considerable exploration activity from Santa Fe Pacific (now Newmont), BHP, and Placer Dome (now Barrick), among others. Together these groups have completed gravity geophysics, soils geochemistry, CSAMT, and more than one drilling program. The gravity data suggest shallow bedrock across the target; the CSAMT lines demonstrate the presence of numerous high angle fault zones; the soils data show highly anomalous concentrations of gold, silver, arsenic, antimony, and lead; and the drilling results confirm the presence of large areas of shallow, hydrothermally altered, and geochemically anomalous bedrock.
At the southern end of the Kelly Creek pediment target, NGE has been actively advancing its Hot Pot property since 2005. NGE has used its proprietary groundwater chemistry exploration technology in conjunction with traditional exploration techniques to define a large area of shallow, hydrothermally altered bedrock containing anomalous concentrations of gold and other important trace elements. Building from the success of NGE’s groundwater chemistry exploration program at Hot Pot and at its other properties, NGE plans to use its proprietary technology to complete a detailed groundwater chemistry survey of the Genesis Property. With the addition of groundwater chemistry data, NGE believes that it will be well positioned to direct the next stages of exploration on the Kelly Creek pediment target.
Commenting on the Agreement, Wade Hodges, President and CEO: “This is exactly what we have set out to do. Here is a prospective covered pediment target: a prominent gravity and geochemistry anomaly sitting on top of a regional north-south structural trend that controls more than 20 million ounces of gold to the north and 10 million ounces to the south. Past groups have taken it forward to the limits of traditional exploration techniques, and now it’s time to compliment traditional techniques with our new groundwater chemistry exploration technology, developed specifically to explore in these covered, pediment settings. With our groundwater exploration technology, we can add considerable value to the property and move it forward, either alone, or with partners. With a large land position already to the north and south, NGE has set itself up to be a major player in the ongoing development of one of Nevada’s most compelling pediment plays.”
ABOUT NEVADA EXPLORATION INC.
NGE is an exploration company focused on gold in Nevada. NGE is led by an experienced and historically successful exploration management team. NGE has developed a proprietary groundwater chemistry exploration technology to explore for gold in Nevada’s covered basins where traditional exploration techniques are challenged. NGE has completed the first ever comprehensive survey of Nevada’s groundwater focused on discovering new gold deposits, and has demonstrated that Nevada’s gold deposits exhibit recognizable and measurable groundwater chemistry signatures. NGE has used its proprietary technology to identify, acquire, and develop 10 new exploration properties exhibiting groundwater chemistry similar to known gold mines, and NGE is applying a standardized, staged exploration program at each property.
NGE has completed Phase I drilling at three of its properties and has discovered new, previously unknown, geochemically anomalous, hydrothermal systems at all three. With these results, NGE has demonstrated that its groundwater chemistry exploration program can identify new, high quality exploration targets in previously unexplored areas. Now that NGE has established groundwater chemistry as a valuable and important exploration technology, NGE plans to focus on matching its drill-ready properties with competent exploration partners. By leaving the later stages of exploration and development to the exploration partners, NGE plans to focus on leveraging its investment in groundwater chemistry exploration technology to identify and advance more new exploration properties, and to establish itself as a source of high quality, drill ready exploration properties for the mining industry.
For further information please visit our website at www.NevadaExploration.com or contact:
Wade A. Hodges,
President & CEO
Nevada Exploration Inc.
Tel: (775) 359-7740
Fax: (775) 359-7741
Wade A. Hodges is the Qualified Person, as defined in National Instrument 43-101, and is responsible for the preparation of the technical and scientific information contained in this News Release.
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.
Cautionary Statement on Forward-Looking Information:
This release contains certain "forward-looking statements" including, without limitation, expectations, beliefs, plans and objectives regarding the potential transactions and ventures discussed in this release. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the risks inherent in mineral exploration, the need to obtain additional financing, environmental permits, the availability of needed personnel and equipment for exploration and development, fluctuations in the price of minerals, and general economic conditions.