VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 8, 2013) - Klondike Silver Corp. (TSX VENTURE:KS) (Klondike) is pleased to announce that it has executed a formal Option Agreement (the "Agreement") with Victory Mountain Ventures Ltd. (TSX VENTURE:VMV) (Victory) to option a portion of the Silver Slocan Mining Camp located in south eastern British Columbia.
The primary exploration focus will be on the silver-lead-zinc expansion potential to the west of the Silvana Mine located centrally in the Silver Slocan Mining Camp. The map provided at this link (http://www.klondikesilver.com/i/maps/longitude.jpg) illustrates the exploration potential between Klondike's Silvana Mine and the Mammoth Mine which is along strike to the west. The area labeled as the "Prospective Horizon" is where exploration will be focused as the existing underground mine structure will allow for underground drilling to explore the western extension potential.
The second land package offered in the option agreement are the Cody Creek claims located to the northeast and is believed to be along the same strike as the Silvana Mine. Cody Creek has excellent access and exploration potential containing several past producing mines. (Refer to the Assessment Report at the following link: http://aris.empr.gov.bc.ca/ArisReports/31556.PDF).
With the advantage of modern exploration techniques in this historically productive mining camp, the parties are hoping to discover new deposits and develop past producing mines in the Slocan Mining Camp.
Option Agreement Terms:
For Victory to acquire a 50% right, title and interest on the Silvana West and Cody Creek claims, it must make an initial cash payment of $75,000 upon TSX Venture Exchange approval, issue 2,000,000 shares to Klondike and incur $3,750,000 dollars in exploration costs over a three year period broken down as follows;
|Date/Anniversary||Shares issued to Klondike||Cash issued to Klondike||Victory's Total Project Interest|
Victory must incur a minimum in expenditures for exploration and development work on the property of $3,750,000 as follows:
- $1,000,000 of expenditures on or before the first anniversary that Regulatory Approval of this Agreement was received; and
- A cumulative total of $2,250,000 of expenditures on or before the second anniversary that Regulatory Approval of this Agreement was received; and
- A cumulative total of $3,750,000 of expenditures on or before the third anniversary that Regulatory Approval of this Agreement was received.
Under the Agreement, Victory will also be entitled to a royalty payment equal to 50% of the net profit received from the sale of any newly discovered resources should exploration prove successful. Any cash payments due to Victory will be credited toward the Expenditure requirements under the Agreement until the option has been satisfied. All agreements will be subject to TSX Venture Exchange approval.
If Victory exercises the option, Klondike agrees that it will grant to Victory a further twenty-five percent (25%) interest in and to the property on terms and conditions to be agreed upon between the parties and subject to a further option agreement between the parties.
About Klondike Silver Corp.
Klondike Silver Corp. has assembled a quality portfolio of silver properties throughout Canada, most notably, in the historic Slocan Mining District southeastern British Columbia. This historic camp has produced more than 24 million ounces of silver since the first discoveries in the late 1800s. Klondike Silver is the dominant land-holder controlling a majority of the historic camp and the fully permitted, 100% owned "Sandon Mining Complex". The Company owns the past-producing Silvana, Wonderful, and Hinckley Mines and several other properties with significant exploration potential.
For additional information please visit the company website www.klondikesilver.com.
On Behalf of the Board of Directors
Klondike Silver Corp.
Richard Hughes, President and Director
This report contains forward looking statements. Resource estimates, unless specifically noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. The production rate and mine-life projections have been made without support of a feasibility study, there is no certainty the proposed operations will be economically viable. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
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Klondike Silver Corp.