VANCOUVER, BRITISH COLUMBIA, February 22, 2021 – West Vault Mining Inc. (WVM:TSXV, OTCQX:WVMDF) (“West Vault” or the “Company”) announces the execution of a definitive Purchase and Sale Agreement (the “Stream Agreement”) between the Company and Sprott Private Resource Streaming and Royalty Corp. (“Sprott”) for 1.41% of all refined gold and silver (the “1.41% Stream”) to be produced for the life of mine from the Hasbrouck Gold Project, located southwest of Tonopah, Nevada and comprised of the 100% owned Hasbrouck property, Three Hills property and the Hill of Gold property (together the “Hasbrouck Gold Project”).
Under the terms of the Stream Agreement, Sprott is to pay the Company (a) an advance purchase deposit of US $6.0 million (the “Advance Deposit”); and (b) an additional deposit of US $1.0 million (the “Additional Deposit” and collectively with the Advance Deposit, the “Deposit”) within 10 days of the Company announcing a Board-approved construction decision for the Hasbrouck Gold Project. Sprott may then elect to add the Hill of Gold property to the property covered by the Stream Agreement by paying to the Company (c) a final amount, to be added to the Deposit, of US $300,000 within 60 days of paying the Additional Deposit. A cash transfer price payable to the Company upon delivery of refined gold and silver to Sprott has been set at 20% of the market value per ounce of metal, as quoted by the London Bullion Market Association on the date of delivery. The balance of the market value per ounce will be applied as a credit against the Deposit until the Deposit is fully utilized. Thereafter the price of the metals paid to the Company will be 20% of the market value thereof.
The permitted Hasbrouck Gold Project is one of only a few shovel-ready gold projects in the US South-west, and not including the Hill of Gold property, hosts an estimated 762,000 ounces of Proven and Probable gold Reserves1 and 10,569,000 ounces of Proven and Probable silver Reserves1. At a gold price of US $1,800, an independent Pre-feasibility Study completed in 20161 (the “2016 PFS”) estimated an after-tax IRR of 92% and a US $295 Million NPV(5). The Company believes additional mineral resources may be delineated adjacent to the known deposit areas by further exploration drilling during construction and operation.
In May 2017, the Company purchased an existing 1.1% Net Smelter Return Royalty (the “Acquired Royalty”) over the Hasbrouck Gold Project from Newmont Mining Corporation. The 2016 PFS assumed the Acquired Royalty was owned by a third party, resulting in an expense and a reduction to the project’s estimated NPV. The 1.41% Stream is calculated to approximately offset the cost to the project as if the Acquired Royalty was sold to a third party. As a result, the 2016 PFS modelled NPV has not materially changed and the 1.41% Stream proceeds to be received by the Company are effectively an addition to the project’s NPV as estimated in the 2016 PFS.
Federal permits issued by the Bureau of Land Management are now in place for both the Three Hills Mine and the Hasbrouck Mine. State permits are in place for the Three Hills Mine and will be processed in due course for the Hasbrouck Mine. The Company is currently working to amend its existing permits at the Three Hills Mine to allow mineralized material mined at the Hill of Gold property to be placed and processed on the planned heap leach pad for the Three Hills Mine. The Hill of Gold property hosts a non-current historical inferred resource (see the Company’s news release dated February 2, 2021). A qualified person has not done sufficient work to classify this historical estimate as current mineral resources or mineral reserves, and the Company is not treating the historical estimate as current mineral resources or mineral reserves.
Closing of the Stream Agreement is subject to the satisfaction of closing conditions, including receipt of regulatory approval.
Qualified Person
R. Michael Jones P.Eng., Chief Executive Officer for the Company, as a non-independent Qualified Person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), has reviewed and approved the technical information disclosed in this news release.
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