Gold Summit Corporation (“GSM” or the “Company”) announces that it signed an option agreement with Parker Mining Company covering 22 unpatented mining claims at Sugarloaf Peak, Esmeralda County, in western Nevada. Option payments, starting at $5,000 for year one, escalate by $5,000 on successive anniversaries for a four year period. Work expenditure requirements are $25,000 for year one, $100,000 for year two and $200,000 for years three and four. The lease may be extended beyond four years. At the start of production GSM will own a 100% interest subject to a 4% NSR production royalty. GSM has the option to reduce the royalty to a 1% NSR by making a single cash payment of $2 million.
The Sugarloaf Peak area contains a number of shallow underground workings one of which, the Tip Top Mine, has recorded production between 1915 and 1918 of approximately 6,500 ounces at a grade of 22.2 g/t gold. The prospect was explored by a number of exploration groups, including GSM, between 1980 and 2006 and a number of targets developed from GSM’s previous work remain, either undrilled or poorly tested. Underlying the district is a thick pile of volcanics and volcanic sediments filling a pronounced fault bounded trough. It is a classic geological setting for prolific epithermal systems, notably the Midas deposit in Northern Nevada. Additional exploration and drilling is warranted to evaluate the higher grade underground extent of the existing Tip Top resource and to test several other high quality surface epithermal vein expressions.
Much of the past drilling was concentrated at Tip Top where Dos Amigos, a junior company drilled 60 shallow percussion holes, 50 of which intersected greater than 1 g/t gold over drilled widths between 25 and 3 metres, including one interval of 16 m of 21.2 g/t gold. Dos Amigos made substantial progress towards permitting an open pit mine before abandoning their interest in 2001 in the face of weak gold prices. Parker Mining Company has calculated a potential open pit resource (not NI 43-101 compliant) ranging from 33,000 to 102,000 ounces at grades of 3.8 g/t and 3.6 g/t gold, respectively. The estimated potential resource range depends on the distance filter (between 6 m and 12 m, respectively) applied in the computer generated model. The potential quantity and grade is conceptual in nature with insufficient work to define a mineral resource and it is uncertain if further work will result in definition of a mineral resource. GSM plans to complete a NI 43-101 compliant study on the project as well as evaluating nearby areas for offsite ore processing. Metallurgical test work by past explorers indicates good leach characteristics.
GSM explores primarily in Nevada for high grade gold and gold/silver deposits that would support underground, low cash cost operations. GSM’s primary properties, totaling 42 km2, cover four Tertiary epithermal vein districts. All these have drill ready targets defined by surface work, most with bonanza grades in outcrops or discovery drill holes. The company’s flagship property, Monte Cristo, contains a NI 43-101 compliant inferred resource estimate of 331,000 tonnes averaging 6.5 g/t gold. High grade shoots that form the heart of the resource are open down plunge and the company plans work to extend these.
In the opinion of the Company, much of the work on the Property completed prior to 2001 appears to be reliable and to have been conducted by competent organizations. The pre-2001 data are considered historical according to NI 43-101 and these historical estimates are not NI 43-101 compliant. A qualified person has not done sufficient work to classify the historical estimates as current mineral resources or mineral reserves and GSM is not treating the historical estimates as current mineral resources or mineral reserves as defined in NI 43-101. Accordingly, the historical estimates should not be relied upon by investors.
Larry Kornze, a GSM director and a registered Professional Geologist, is designated as the Qualified Person under NI 43-101 and has reviewed and approved the contents of this news release.
For further information, contact Andrea Rascati at (775) 284-7200 or visit our web site at www.goldsummitcorp.com.
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.
This news release contains forward-looking statements. These statements are based on information currently available to GSM and GSM provides no assurance that actual results will meet management’s expectations. Forward-looking statements include estimates and statements that describe GSM’s future plans, objectives or goals, including words to the effect that GSM or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “shall”, “will”, or “would”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of GSM’s mineral properties, and GSM’s financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of GSM’s forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on GSM’s forward-looking statements. GSM does not undertake to update any forward-looking statement that may be made from time to time by GSM or on its behalf, except in accordance with applicable securities laws.
This news release includes certain “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Without limitation, statements regarding potential mineralization and resources and reserves, exploration results, and future plans and objectives of the Company are forward looking statements that involve various degrees of risk. The following are important factors that could cause the Company’s actual results to differ materially from those expressed or implied by such forward looking statements: changes in the world wide price of mineral commodities, general market conditions, risks inherent in mineral exploration, risks associated with development, construction and mining operations, the uncertainty of future profitability and the uncertainty of access to additional capital.
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