Sept 27/99-FLA.ASE-Hecla to Joint Venture Highland Project
Fairmile Gold Corporation
September 27, 1999
ASE: FLA
Hecla Mining Company to Joint Venture Fairmile's Highland Project
Vancouver, BC: Fairmile Gold Corp. (Fairmile, ASE:FLA) is pleased to announce that it has entered into an Earn-in Joint Venture Agreement with Hecla Mining Company (Hecla, NYSE:HL and HL-PrB) on its Highland Project. Highland is located in the Walker Lane, north of Gabbs, Nevada. It has geologic similarities to bonanza-grade epithermal gold/silver systems such as Midas, Sleeper, El Penon, and Kubaka.
The Agreement allows Hecla to earn a 51% interest in the Project by funding a US$3 million exploration program within a 5-year period. The program will be carried out jointly by Hecla and Fairmile. Fairmile will be entitled to the following option payments during earn-in: $5,000 upon signing, $5,000 in six months, $10,000 on the first anniversary, and $15,000 on subsequent anniversaries. In addition, Hecla will reimburse Fairmile $19,000 for this year's land payments and fees.
Hecla can earn a further 19% interest, a total of 70%, by conducting additional work and producing a bankable feasibility study. Hecla has the option of earning an additional 10%, to a total of 80%, by funding Fairmile's portion of development costs. Hecla's expenditures in excess of the initial $3 million earn-in will be recouped from 100% of operating income. There are dilution options should Fairmile choose not to participate in the development of any deposit discovered after initial production at Highland.
Hecla and Fairmile plan to begin an exploration program this Fall, which is expected to consist of mapping, sampling, geophysics, and trenching. The results of this work will aid in identifying drill targets.
Fairmile interprets auriferous veins at Highland to be part of the upper level of a low-sulfidation,epithermal gold/silver system that is associated with felsic volcanic domes. Previous drilling by others only tested a portion of the upper 200 feet of the Highland vein system, and vein textures suggest the main zone of boiling and gold accumulation lie at greater depth. The best hole previously drilled reportedly contains 19 feet averaging 0.13 troy ounces of gold per ton. The highly prospective Deb target, with surface values to 0.085 troy ounces of gold per ton, has never been drilled or trenched. Fairmile is pleased to have Hecla, a highly respected operator, as joint-venture partner at Highland.
In other news, Newmont Mining Corp. (NYSE:NEM) and Fairmile have consummated the previously announced lease exchange at Buffalo Valley (See News Release dated June 29, 1999).
Work is also progressing at the Company's Eastgate property in Nevada, under a joint venture agreement with Echo Bay Mines, Ltd. (AMEX:ECO) as the operator. Detailed mapping and sampling are underway to help identify potential drill targets.
Fairmile continues to seek a joint-venture partner for Buffalo Valley (exclusive of the section 14 lease with Newmont). To obtain more information about Fairmile, visit our Web Site at fairmile.com or contact Investor Relations at 1-604-257-4254.
"Joseph Anthony Kizis, Jr."
Joseph Anthony Kizis, Jr., President and CEO
This News Release contains forward-looking statements that are subject to various risks and uncertainties. Such statements contained herein represent managements best judgment as of this date based on information currently available. Actual results may differ materially from those currently anticipated in these statements.
The Alberta Stock Exchange has neither approved nor disapproved the information contained herein. |
