Vancouver, British Columbia – September 11, 2012, Paget Minerals Corp. (TSX-V: PGS), (“Paget” or the “Company”) announced today that it has entered into an option agreement with Sundance Minerals Ltd. (“Sundance”) whereby Paget can earn up to a 60% interest in the San Ricardo Gold-Silver Project located within the prolific porphyry and epithermal gold-silver-copper belt of northern Sonora State, Mexico.
David F. Volkert, President and CEO of Paget, stated, “Following on the heels of the Ball Creek agreement with Blue Gold Mining in British Columbia (see press release dated 26 June 2012), the agreement on the San Ricardo Project underscores Paget’s strategy of geographic diversification through partners with established teams. Northern Sonora provides year-round work complementing our BC drilling and reconnaissance programs.”
The Project area covers a total of 38,100 hectares in northern Sonora State. The region hosts large Cu-Mo porphyry deposits, including Cananea and Creston, among others, and a number of epithermal gold-silver deposits, including the San Francisco (Timmins Gold), Mercedes (Yamana Gold) and Santa Elena (SilverCrest) Mines. Excellent road access and infrastructure provide for year-round exploration. (Click here for regional location map.)
Preliminary reconnaissance within the Property has identified multiple high-grade gold targets as well as areas with bulk tonnage potential. Current work has focused on the Santa Cruz Target (four known sub-parallel vein systems) around the inactive San Ricardo Mine, an area with scores of historic mine workings and small scale leach production.
Gold mineralization on the Santa Cruz Target occurs as granite-hosted, stockwork, shears and veins with both high-grade underground and lower grade open-pit potential. Paget and Sundance have completed detailed mapping as well as collecting 730 samples, including underground channel, surface rock chip and trench channel samples. Underground sampling along 300m of the minimum two kilometer-long Santa Cruz vein show results from 1.0m @ 0.29g/t to 2.0m @ 46.4g/t gold. Fifty-one of the 83 saw cut-channels in mine workings assayed more than 4g/t Au and average 12.2g/t Au over 2.5 meters.
The weighted gold-grade averages (all true widths – oxide mineralization) of sampling on 8 different levels along 15-54m sections of the vein are: 1.4m @ 1.9g/t, 2.4m @ 5.3g/t, 2.5m @ 5.5g/t, 2.6m @ 7.1g/t, 2.0m @ 10.8g/t, 2.0m @ 11.2g/t, 2.4m @ 12.7g/t and 2.9m @ 22.9g/t. Mineralization remains open along strike and at depth.
The Santa Cruz, Intermedia and Mina Antigua vein structures intersect forming an exposed150m x 200m triangular area of mineralized hematite stockwork and fracturing. Trench and surface rock-chip sampling results within this mineralized area suggests open-pit potential with all samples averaging 0.72g/t gold. The topography within the stockwork trench area and the immediate underground workings is favorable for possible inclusion of high-grade veins in a pit outline. Significantly, silver values range from anomalous to 452g/t.
Surface sampling results from elsewhere within the large San Ricardo claim block adjacent to current and historic gold placer workings show values to 4.5g/t gold from both vein outcrop and float material.
Click here for maps of the project and a complete list of surface and underground sample results.
TERMS OF THE AGREEMENT
Paget has an exclusive right to earn an initial 51% interest (the “First Option”) in the San Ricardo Project by incurring US$500,000 in exploration expenditures by the first anniversary of the closing date and an additional US$5,000,000 by the fourth anniversary of the closing date and by reimbursing Sundance for 51% of the US$250,000 in payments made or to be made to the underlying owner (the “Underlying Payments”). Paget also retains an exclusive right to earn an additional 9% interest (the “Second Option”) by funding a pre-feasibility study in the three-year period following the 51% earn-in date. In order to maintain the Second Option in good standing, Paget must incur US$1,000,000 in exploration expenditures by each of the first, second and third anniversaries of the 51% earn-in date and must reimburse Sundance for an additional 9% of the Underlying Payments.
Once Paget has earned a 60% interest in the San Ricardo Project or Paget does not exercise the Second Option, Paget and Sundance shall elect either to participate in further exploration programs on a prorata basis or have their interest diluted. If the interest of either Paget or Sundance is diluted below 10%, the diluted party shall be entitled to a 2% Net Smelter Return royalty (“NSR”). Paget will have the right to purchase a 1.5% NSR for US$2 million.
Sundance will be the operator during the first 12 months employing its established technical and logistical support team in Mexico. The operator in the ensuing years will be determined by Paget. Sundance and Paget plan to commence drilling of the Santa Cruz target during the last quarter of 2012.
Paget also has an exclusive right (when it exercises the First Option and Second Option) to earn an initial 51% interest (the “First Option”) and an additional 9% interest (the “Second Option”) in Sundance’s option (the “Mercator Property Option”) to acquire a 700-hectare portion of a contiguous claim (the “Mercator Property”) held by a subsidiary of Mercator Minerals Ltd. Under the Mercator Property Option, Sundance can earn a 51% interest in the Mercator Property by making an initial payment to the Mercator subsdiary of US$25,000 and incurring work expenditures of US$250,000 over a three-year period. Sundance may earn an additional 19% interest, for a total of 70%, by making a cash payment to the Mercator subsidiary of US$150,000 and incurring work expenditures of US$2,000,000 over the two-year period following the 51% earn-in date. In order for Paget to earn an interest in the Mercator property, it must fund these costs.
Once Sundance has earned a 70% interest in the Mercator Property or Sundance does not exercise the option to earn the additional 19% interest, Sundance and the Mercator subsidiary shall elect either to participate in further exploration programs on a prorata basis or have their interest diluted. If the interest of either Sundance or the Mercator subidiary is diluted below 9%, the diluted party shall be entitled to a 2% Net Smelter Return royalty (“NSR”). Sundance will have the right to purchase a 1% NSR for US$1.5 million.
About Paget Minerals Corp.
Paget Minerals Corporation is a publicly traded resource company focused on mineral exploration and the advancement of the company’s priority Ball Creek Project in British Columbia. The company hosts a 52,442-hectare, contiguous mineral tenure package in the Golden Triangle – Iskut Mineral District located just 8km west of Highway 37 and only 36km northwest of the new Northwest Transmission Line Substation at Bob Quinn and neighbors three major mine development projects in the Golden Triangle — Galore Creek, Schaft Creek and Red Chris. In 2012, Paget will focus its BC exploration program on the Ball Creek Project, as well as advancing its exploration in Mexico. Paget also maintains its equity position in Trident Gold Corp. exploring for gold in Colombia. David Volkert, President and CEO, serves as the Qualified Person under the definitions of NI 43-101.
On Behalf of the Board of Paget Minerals Corp.,
“David F. Volkert”
President & CEO
For further information, please contact:
Paget Minerals Corp.
David Volkert, President & CEO
Tel: (778) 327-4449
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 release.