|October 13, 2020|
Rhyolite Resources to acquire Brothers Project in Suriname
|VANCOUVER, BC, OCTOBER 13, 2020 -- Rhyolite Resources Ltd. (the "Company" or "Rhyolite") (RYE-TSXV) is pleased to announce that it has entered into a definitive share purchase agreement, dated October 13, 2020, with each of the shareholders (collectively, the "Vendors") of 2777662 Ontario Corp ("ONCorp") to acquire all of the outstanding share capital of ONCorp. ONCorp is a privately-held arms-length company which holds an option to acquire an 80% interest in the Brothers Project in Suriname.
Under the terms of the purchase agreement, Rhyolite will issue 15,546,566 common shares to the Vendors in consideration for all of the outstanding share capital of ONCorp (the "Transaction").
The 96-square-kilometre Brothers Concession (the "Project" or "Brothers") is considered one of the more prospective projects on the Guiana Shield in Suriname. Mining and alluvial mining has occurred on the Concession since 2009 (see Figure 1). Brothers is accessible by road and is located approximately 45 kilometers from Newmont's Merian Mine, which produced 500,000 ounces per year, totalling 1 million ounces in the first two years of production alone (see Figure 2). Brothers is within the same general mineralized lithologic and structural setting as IAMGOLD's Rosebel Gold Mine and the Merian Mine.
Since 2014, samples collected from the Project include 100 channel samples of which 32% are greater than 1 gram per tonne (g/t) gold and 63% of which are greater than 100 parts per million. Three samples exceed 10 g/t with a high of 17.25 g/t. There is a total of 246 grab samples, including 2018 results (see Figure 3). Of these, 84 exceed 1 g/t (34%) and 194 exceed 100 parts per billion (80%). Of these, 22 exceed 10 g/t with a high assay of 105 g/t from the nearby Manse Mine. A sieve analysis demonstrated a value of 135 g/t for the 105 g/t sample.
At the Manse Mine, underground mining by hand of a significant quartz vein, first discovered by alluvial mining, reported 50 kilograms of gold production over 10 months of operation utilizing a small shaft. There are currently three underground levels at Manse with a fourth currently in development. The operator reported grades of 30 to 40 g/t on levels one and two, and approximately 20 g/t on the third. However, these results have not been independently verified (see Figure 4). Two samples of tails from the sluice collected during a site visit showed very high gold values of 21.8 and 28.9 g/t, indicating current processing techniques are highly inefficient.
The Savero Project has been a primary target at the Brothers Concession, with the intent of conducting small-scale mining in the saprolite. In March 2015, the southwestern wall showed a zone of parallel to sub parallel, asymmetric quartz reefs that can be classified as tension gashes. These veins have been the main target and are 8 to 10 meters in width. Quartz veins intercepted on the southern wall are white, oxidized and include spots, banded and massive tourmaline, especially near the selvages. Assay results from channel sampling across quartz veins on the northeastern wall of the pit show an average grade of 6.476 g/t over 10 meters and include a high grade sample of 17.25 g/t over 2 meters. Assay results from tailings shows a value of 8.18 g/t (see Figure 5).
The greenstone belt of the Guiana Shield is estimated to host approximately 110 million ounces of gold from Venezuela to Brazil.* The greenstone belt is part of the Trans-Amazonian orogenic cycle which represents a major deformational event centered around two billion years ago. The rocks of the Trans-Amazonian orogenic cycle and equivalent are a major source of gold production and resources in both South America and Africa, which were linked together prior to the opening of the Atlantic Ocean.
At Brothers, gold is associated with quartz veins that contain tourmaline and iron sulfides. Surrounding rocks are bleached or altered granitic rocks or felsic dikes or both. The vein sets appear to be brittle deformation with minimal shearing or ductile deformation. In the sedimentary rocks within a major shear zone are a second geologic setting that appears to contain potential gold deposits on the Brothers Concession. A simple interpretation of the magnetic survey flown by Terraquest in 2012 is provided in Figure 6.
Highlights of the Transaction
Upon closing of the Transaction, Rhyolite shall assume ONCorp's right to earn up to an 80% interest in the Brothers Project, which right is exercisable by completing the following:
Completion of the Transaction remains subject to the approval of the TSX Venture Exchange, and other conditions customary for a transaction of this nature, and cannot be completed until such conditions have been satisfied. The Transaction is expected to close by October 30, 2020. No finders' fees or commissions are payable in connection with the Transaction.
Figure 1: Extensive alluvial mining looking north, showing saprolite mining where quartz veins were intersected in southeastern corner of photo.
Figure 2: The Brothers Project (outlined in red) within the greenstone belt in Suriname, with mines and major deposits and areas of small-scale mining.
Figure 3: Assay results plotted with quartz vein trends from the 2018 samples and 11 site visit samples.
Figure 4: Underground mining at Manse Pit, 2019 (left), and quartz veins with tourmaline at Manse (right).
Figure 5: Quartz veins exposed on wall of Savero Pit and oversized quartz boulders.
Figure 6: Simple interpreted geology from review of Terraquest airborne total magnetic field.
*Source: Bardoux, M., Moroney, M., and Robert, F., 2018. Gold mineralization in the Guiana Shield, Guiana and Suriname, South America: a field trip to the 14th biennial Society for Geology Applied to Mineral Deposits (SGA) meeting; Geological Survey of Canada, Open File 8351, 28 p. https://doi.org/10.4095/306546.
Dr. Dennis LaPoint, PhD, LGeo, is a Qualified Person (QP) under National Instrument 43-101 "Standards of Disclosure for Mineral Projects" and has approved the technical information contained in this news release. Dr. LaPoint is not considered to be independent for the purposes of National Instrument 43-101.
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.
Richard Graham, P.Geo.
About Rhyolite Resources Ltd.
Rhyolite Resources Ltd. is a Canadian-based, opportunity focused, resource company. Utilizing its technical strength and entrepreneurial drive, Rhyolite's corporate strategy is to enhance shareholder value through the acquisition of discovery to production staged projects.
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws, including, without limitation, statements with respect to exploration, resource potential, production development and permits. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Rhyolite Resources Ltd., or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information including the Company obtaining the approval of the Offering from the TSX Venture Exchange. Such statements can be identified by the use of words such as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate", "scheduled", "forecast", "predict", and other similar terminology, or state that certain actions, events, or results "may", "could", "would", "might", or "will" be taken, occur, or be achieved.
These statements reflect the Company's current expectations regarding future events, performance, and results and speak only as of the date of this news release. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except as required by securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if the Company's expectations regarding future events, performance, or results change.
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