VANCOUVER, BC--(July 21, 2015) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
ExGen Resources Inc. ($EXG:CA) ($BXXRF) ("ExGen") is pleased to announce today that, further to the press release dated May 21, 2015, together with Konnex Resources, Inc. ("Konnex") a wholly owned subsidiary of ExGen, it has signed an option agreement (the "Option") with Phoenix Global Mining Limited, a private British Virgin Islands based mining company focused on base metals development ("Phoenix") to earn an 80% interest in the Empire Mine Project.
The Option allows Phoenix to acquire 80% of Konnex, ExGen's subsidiary that holds the leases to the Empire Mine Project, on the following terms and conditions:
- ExGen was paid a cash payment of US $50,000 on signing the Option
- ExGen was issued 5,000,000 common shares of Phoenix on signing the Option
- ExGen to be paid a cash payment of US$ 50,000 within 60 days of signing the Option
- Phoenix to fund a minimum of US $1,000,000 of expenditures on Empire Mine Project within 12 months of signing the Option
- ExGen to be issued 5,000,000 common shares of Phoenix on the exercise of the Option by Phoenix
- Phoenix to fund all Empire Mine Project property maintenance and sustaining costs of Konnex
- ExGen to be paid US $100,000 on each anniversary date of the Option signing until the completion of a feasibility study
- ExGen to retain a 20% carried interest until commencement of mine construction
- ExGen to be granted a 2.5% net smelter returns royalty for all metals on the Empire Mine Project (the "NSR")
- 30 mile area of interest applies to both ExGen's 20% carried interest and our 2.5% NSR
The 30 mile area of interest was structured to provide ExGen with the upside exposure to any potential regional exploration success on the Empire Mine Project.
The Option is subject to TSX Venture Exchange approval.
Mr. Jason Riley, CEO of ExGen commented: "We are pleased to have signed our option with Phoenix on even more favourable terms that we initially announced. Upon final analysis the Phoenix team decided they would fast track Empire and agreed to a 12 month time period for the US$ 1 million spend, instead of the 18 months we had previously announced. This deal culminates the last 2 years of strategic repositioning for ExGen as it provides the company with a potential path to cash flow and anchors our joint venture and royalty business model."
ABOUT THE PHOENIX TEAM
The Phoenix team has previously built two companies from development through to production, Nelson Gold in Tajikistan, an 80,000 oz/annum gold producer (source: Nelson Gold financial statements and Northern Miner 8/31/98) and Oxus Gold's Amantaytau Goldfields in Uzbekistan, which produced more than half a million ounces of gold and almost 2.5 million ounces of silver in its first 6 years of production (source: Oxus Gold plc June 30, 2007 financial statements). Phoenix's principals have practical hands-on experience in precious and base metals exploration and mining, as well as being successful in project generative work, globally sourcing new projects for exploration and development for mid tier and major copper, gold, and iron ore producers.
Phoenix Chairman, Mr. Roger Turner, has an extensive mining career spanning over 40 years, including running multiple TSX and AIM listed companies and mining for copper in Granisle BC, Hudbay Minerals in Manitoba, Falconbridge in Uganda and for Rio Tinto Technical Services. Mr. Turner commented, "We pleased to have signed the Empire option and taking the next steps toward development of the Empire Mine in Idaho and engaging with the local community to build a wealth-creating future for all stakeholders. Our initial plan is to complete a Joint Ore Reserves Committee (JORC) and/or NI43-101 Resource Calculation and pending the results, then proceeding with a Preliminary Economic Assessment Report."
ABOUT THE EMPIRE MINE PROJECT
The historic Empire Mine is reported to have produced 694,000 tonnes grading 3.64% copper, 1.65 g/t gold and 53.9 g/t silver from underground workings during the period 1901 to 1942. (Victoria E. Mitchell "History of Selected Mines in the Alder Creek Mining District, Custer County, Idaho," Staff Report 97-2, April 1997, Idaho Geological Survey). The property is classified as a polymetallic copper skarn. The mineralization is represented by a vertical zone (5 to 15 metres wide) of higher grade copper-gold-silver sulphide mineralization located within and below a larger zone of lower grade copper-oxide mineralization. Previous work on the property has encountered oxide and sulphide copper mineralization over a strike length of 1,200m, from 6 to 70m thick and to a depth in excess of 300m.
Exploration on the property by a number of exploration companies between 1964 and 1975 resulted in the drilling of 151 holes mostly within the area referred to as the AP pit.
Cambior Exploration USA Inc. explored the property from 1995 to 1997 and drilled 47 angle core holes (7,350m) mostly within the AP pit area (Schnabel, R. and Lloyd, A. "Sultana Project, 1996 Exploration Report", report for Cambiex Inc. dated February 26, 1997. With attached Monthly Report dated September 23, 1997, and Cambior 1997). A historical estimate was derived internally by Cambior's geologist in 1996-1997. In a report prepared by Cambior for vending purposes in 1997, the following parameters were used to prepare the historical estimate for the mineralization in the AP pit area, a 0.15% copper cut-off, a geologically representative search distance of 180 feet, contiguous 5 foot core samples on 20x20x20 foot blocks, an inverse distance algorithmic model with commercially available Techbase software, metal prices of $1.00/lb for copper, $350.00/ounce for gold, $4.86/ounce for silver and $0.65/lb for zinc, metal recoveries of 80% for copper, 70% for gold, 60% for silver and 60% for zinc. Rock densities were determined using published reference material and in-house tests. Cambior calculated a strip ratio of 1.8 tons of waste per ton of mineralization. Most of Cambior's drill fences range from 100 to 330 m apart with core holes on 60m centres. A total of 188 of the then existing 198 holes on the property were used in the estimate.
The Cambior historical estimate was divided into two components, a precious metal bearing oxide copper historical estimate and a copper-zinc style of mineralization. Cambior reported a "drill-indicated", near surface, oxide copper estimate of 18.23 million tons grading 0.49% copper, 0.19% zinc, 13.5 g/t silver (0.44 oz/t) and 0.51g/t gold (0.015 oz/t) with an additional 9.65 million tons of material grading 0.29% copper and 0.31% zinc with no precious metals. ExGen wishes to inform the reader that a Qualified Person has not done sufficient work to classify the historical estimate as a current resource estimate. ExGen is not treating the historical estimate as a current resource estimate. The work completed by Cambior has not been verified by ExGen and is not considered reliable when compared with National Instrument ("NI 43-101") standards.
Cambior also carried out preliminary metallurgical testwork on the mineralization from the Empire Project. Results from the leach tests conducted by METCOM Research of Tucson Arizona suggested recoveries of 75% to 80% for both copper and gold with 50-60% from silver and zinc from 100mesh material. The METCOM work contemplated a flow sheet using sequential leaching of copper by sulphuric acid, followed by neutralization and precious metal recovery through cyanide leaching.
Cambior concluded that the deposit was amenable to mining by open pit methods with a relatively low strip ratio. Due to low commodity prices and financial commitments elsewhere, Cambior relinquished the property in 1999. The historical estimate completed by Cambior is based on extensive diamond drilling and was completed by a reputable Canadian mining company using industry accepted standards and practices at that time. The "drill indicated oxide resource" terminology used by Cambior does not follow the terminology outlined in Section 1.2 and Section 1.3 of NI 43-101 and can therefore not be categorized under NI 43-101 guidelines.
A considerable amount of additional diamond drilling, assaying, confirmation of the extent and grade of the mineralization reported in the core holes used in the historical estimate, density measurements, updated metal prices and additional metallurgical testwork would be required to either upgrade or verify the historical estimate as a current mineral resource.
Between 2006 and 2011, Musgrove Minerals Corp. ("Musgrove") completed an additional 57 angled core and reverse circulation holes (40 holes as infill drilling within the AP pit area and 17 holes at the northern end of the mineralized zone totalling 8,383m) on the Empire Project. These were completed as in-fill holes within Cambiors' 47-hole drill block. Five of the holes completed by Musgrove did not intersect significant mineralization.
Selected mineralized intersections reported from the Musgrove drilling are set out below.
Hole JRC-11 intersected 53.3 m of mineralization that averaged 1.37% copper and 29.7g/t silver,
Hole EM11-07 intersected 1.5m of mineralization that averaged 0.76% copper, 0.42g/t gold and 14.9g/t silver,
Hole JRC-14 intersected 24.2m of mineralization that averaged 0.76% copper, 0.53g/t gold and 14.8g/t silver,
Hole EM11-24 intersected 29m of mineralization that averaged 0.39% copper, 0.31g/t gold and 24.8g/t silver,
Hole JRC-27 intersected 48.7m of mineralization that averaged 0.34% copper, 1.39g/t gold and 12.0g/t silver,
Hole JRC-15 intersected 97.6m of mineralization that averaged 0.49% copper and 12.7 g/t silver,
Hole JDD-02 intersected 16.8m of mineralization that averaged 0.26% copper , 0.15g/t gold and 12.4g/t silver,
Hole JRC-09 intersected 27.4m of mineralization that averaged 0.16% copper and 0.50g/t gold,
Hole EM11-23 intersected 9.1m of mineralization that averaged 0.25% copper and 0.62g/t gold,
The above mineralized intercepts are reverse circulation intervals (except core-hole JDD-02), and do not represent true width. The copper assays represent total-copper values. To review the entire drilling results for the drilling completed by Musgrove between 2006 and 2011 please see the news releases filed by Musgrove on SEDAR.COM.
Phil van Angeren, P. Geo., a Qualified Person as defined by National Instrument 43-101, has reviewed and verified the technical mining information provided in this release.
About ExGen Resources Inc.
ExGen, formerly Boxxer Gold Corp, is a project incubator with a strategy to aggregate projects during the current market downturn and then fund exploration through joint ventures and partnership agreements. This approach significantly reduces the technical and financial risks for ExGen, while maintaining the upside exposure to new discoveries and potential cash flow. ExGen intends to build a diverse portfolio of projects across exploration stages and various commodity groups. ExGen currently has 6 projects in Canada and the US.
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.
Forward-Looking Information: This news release contains certain forward-looking information. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. In particular, this news release contains forward-looking information in relation to: the Option on the Empire Mine Project including, without limitation, the potential exercise and earning of the Option, future cash payments, Phoenix common share payments and NSR payments in relation to the Option, and possible exploration and development expenditures on the Empire Mine Project; the exploration and production potential of the Empire Mine Project, the ability to bring the Empire Mine project onto production and the potential mining methods for the Empire Mine Project; the additional exploration, assaying, confirmation, metallurgical, and other work required to upgrade or verify the historical work on the Empire Mine Project; the timing and ability to prepare a NI 43-101 resource calculation, preliminary economic assessment and/or feasibility study in relation to the Empire Mine Project; future exploration and development plans on the Empire Mine Project; the timing for exploration and drilling on the Empire Mine Project; and the timeframe within which the Empire Mine Project can be advanced. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. There can be no assurances that the Option will result in the exploration of the Empire Mine Project or that the development of the Empire Mine Project will occur, and if development occurs, that such development will result in a producing mine. In the forward looking information contained in this news release, ExGen has made numerous assumptions, based upon practices and methodologies which are consistent with the mineral industry. In addition, ExGen has assumed: the continued market acceptance of its joint venture partnership model; the ability of ExGen to raise future equity financing, if needed, at prices acceptable to ExGen; ExGen's current and initial understanding and analysis of the Empire Mine Project; the ability of ExGen to discover viable exploration targets and the results of exploration on the Empire Mine Project; the ability of Phoenix to explore and develop the Empire Mine Project; the cost of exploration, including sampling, drilling and assaying, on the Empire Mine Project, the costs of developing the Empire Mine Project and the costs and the ability of Phoenix to produce a feasibility study; and ExGen's general and administrative costs remaining constant. While, ExGen considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause ExGen's observations, actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: there is no certainty that the Option will result in significant exploration of the Empire Mine Project or development of the Empire Mine Project into a producing mine; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineralization and uncertainty as to the actual results of exploration and development or operational activities; uncertainty as to the availability and terms of future financing; uncertainty as to timely availability of permits and other governmental approvals; ExGen may not be able to comply with its ongoing obligations regarding its properties; the early stage development of ExGen and its projects, and in particular, the Empire Mine Project; general business, economic, competitive, political and social uncertainties; capital market conditions and market prices for securities, junior market securities and mining exploration company securities; commodity prices; competition; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting ExGen; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. A description of additional assumptions and risk factors used to develop such forward-looking information that may cause actual results to differ materially from forward-looking information can be found in ExGen's disclosure documents on the SEDAR website at www.sedar.com. Although ExGen has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. ExGen does not undertake to update any forward-looking information except in accordance with applicable securities laws.
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