CALGARY, ALBERTA--(Marketwired - Nov. 1, 2013) -Argonaut Exploration Inc. (the "Company" or "Argonaut") (TSX VENTURE:AGA) announces that the Company has entered into an option agreement (the "Agreement") with an effective date of October 22, 2013 with an arm's length party, to earn a 100% interest in certain mineral claims located in the Hidden Valley area of British Columbia (the "Hidden Valley Property"). The Agreement is a replacement for a previous agreement dated September 22nd, 2009 which expired on September 22nd, 2013 that pertained to the Hidden Valley Property. The Hidden Valley Property, when combined with additional claims currently held by Argonaut, form the Company's "High Gold" property. The Agreement supersedes all prior agreements between the parties.
Pursuant to the terms of the Agreement, Argonaut can earn a 100% interest in the Hidden Valley Property by paying the optionor the aggregate amount of $50,000 and issuing the optionor an aggregate of 500,000 common shares of the Company on the dates and in the amounts as follows:
- $10,000 on the effective date of the Agreement (the "Effective Date");
- 500,000 common shares on receipt of TSXV approval;
- a cash payment equal to $40,000 on or before the date of the first anniversary of the Effective Date.
At a deemed value of $0.05 per Argonaut common share, the value of the aggregate common share consideration to be paid to the optionor is $25,000 over the one year option period. Pursuant to the Agreement, the optionor will retain a 2% net smelter return royalty (the "Royalty") on proceeds derived from the sale of minerals produced from the 5 claims composing the Hidden Valley claims. Argonaut may purchase and terminate the Royalty at any time upon paying to the optionor an aggregate cash payment of $1,500,000. The $10,000 first payment was made to the optionor by the Effective Date of the new agreement. The transaction is subject to regulatory approval.
President Ray Cook states: "Argonaut has successfully re-negotiated a new Hidden Valley option agreement that assists in the near term preservation of the Company's capital and simultaneously maintains a valuable mineral property asset during a difficult funding period for Junior Resource Companies."
High Gold Property
The High Gold property consists of 24 contiguous claims encompassing 7,832 hectares located 60 kilometres northeast of Terrace and 45 kilometres west-northwest of Smithers, British Columbia. Argonaut holds a 100% interest in the High Gold property, with the exception of 5 included mineral claims described in the above summarized option agreement with an expiry date of October 22, 2014.
In 2010, Argonaut explored a porphyry system within the High Gold property with nine exploration drill holes totaling 2,542 metres from five locations with the deepest drill hole reaching 316 metres. Surface geophysical programs included 13 kilometres of deep penetrating induced polarization and magnetometer surveys. Geological mapping and detailed rock sampling targeted the northern gold zone and the central porphyry system with 171 metres of trenching including 51 trenched metres of copper-gold-molybdenum mineralized stockwork bedrock. Historic drill core stored on the property was also sampled adding 1,220 metres of core analyses from seven additional sites.
Results from Argonaut's High Gold exploration program are summarized in the Company's news releases from 2010 to 2011 and indicate a molybdenum-copper-gold-silver mineralized Bulkley-type porphyry system. The High Gold porphyry system contains zones of elevated metals associated with a distinct well-fractured stockwork zone. Geological mapping, geochemistry, drilling and the "deep penetrating" I.P. survey indicate a large and deep metal-bearing system located just 18 km from a major highway with power and rail infrastructure.
The High Gold property borders two other properties with significant copper, molybdenum, gold and silver porphyry systems known as the Louise Lake and Zymo properties. The Louise Lake Property owned by Victory Mountain Ventures Ltd. (formerly North American Gem Inc.) borders to the east and has a reported mineral resource of 147 million tonnes containing 6 million indicated tonnes grading 0.369% copper equivalent and 141 million inferred tonnes grading 0.425% copper equivalent. Eastfield Group's Zymo Project borders to the southwest with numerous copper-gold drill intersections, including hole ZY-08-09 that intersected 253 metres grading 0.32% copper and 0.23 g/tonne gold including 72 metres grading 0.72% copper and 0.54 g/tonne gold.
Late Cretaceous calc-alkalic porphyries in British Columbia can have very large mineralized systems with an enriched stockwork core. Significant regional Stikinia terrane mineralized calc-alkalic porphyry systems include Imperial Metals Inc.'s Huckleberry Mine, which has been in production since 1997 and still contains an estimated ore reserve of 424,000,000 pounds of copper plus gold and silver credits; Copper Fox Metal's Schaft Creek porphyry, which contains a measured plus indicated resource of 1.23 billion tonnes grading 0.27% copper, 0.017% molybdenum, 0.18 g/tonne gold and 1.7 g/tonne silver; and, Thompson Creek Minerals Ltd.'s producing Endako Mine, which contains a measured and indicated resource of 394.3 million tons grading 0.041% molybdenum.
About Argonaut Exploration Inc.
Argonaut is a junior mineral exploration company focused on the acquisition, exploration and development of gold, silver and copper bearing mineral properties. For more information on the Corporation visit its website at www.argonautexploration.com.
This news release may contain 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. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. The Company does not undertake to update any forward-looking information except in accordance with applicable securities laws.