Cranbrook, British Columbia–(Newsfile Corp. – August 20, 2020) – MG Capital Corporation (TSXV: DLP) (“MG” or the “Company”) is pleased to announce that its wholly-owned subsidiary, DLP Resources Inc. (“DLP”) has entered into an option agreement (the “Option Agreement”) with 453999 BC Ltd. (the “Optionor”) in relation to the NZOU (Na-zoo) property located in British Columbia (the “NZOU Property”) held by the Optionor. Pursuant to the terms of the Option Agreement, the Optionor has granted to DLP the option to earn a 100% legal and beneficial interest in and to the NZOU Property (the “Option”).
The Option Agreement
Under the terms of the Option Agreement, DLP will earn a 51% interest in the NZOU Property by:
- incurring exploration expenditures of $15,000 by December 1st, 2020;
- the Company issuing 75,000 common shares of the Company (the “Shares”) to the Optionor within 20 days of the date upon which the TSX Venture Exchange approves the Option Agreement;
- the Company issuing 75,000 Shares to the Optionor by February 28th, 2021;
- incurring exploration expenditures of $50,000 by December 31st, 2021;
- the Company issuing 75,000 Shares to the Optionor by February 28th, 2022; and
- the Company issuing 75,000 Shares to the Optionor by February 28th, 2023.
DLP will earn a 75% undivided interest in the NZOU Property making a cash payment of $100,000 to the Optionor by December 31st, 2024.
The Option will be fully exercised, and DLP will accordingly earn a 100% undivided interest in the NZOU Property, upon the Company issuing 100,000 Shares to the Optionor by December 31st, 2025.
Following the exercise of the Option, the Optionor will be granted a royalty on the NZOU Property (the “Royalty”), being equal to 2.0% of Net Smelter Returns on the NZOU Property. DLP will be entitled at any time and from time to time to purchase up to 50% of the Royalty (being equal to 1.0% of Net Smelter Returns on the NZOU Property) from the Optionor at a purchase price of C$1,000,000.
DLP may, at its option, accelerate the cash payments and issuances of the Shares described above in order to fully exercise the Option prior to December 31st, 2025.
The Option Agreement and the completion of the transactions contemplated thereunder are subject to TSX Venture Exchange approval.
The NZOU Property
The NZOU Property has potential to host a high-grade Sullivan style deposit and is located adjacent to the NE border of the recently drilled DD property (see the Company’s news release dated August 6th, 2020) near Cranbrook, British Columbia, Canada (see Figure 1 below).
The Sullivan Deposit occurs at a geological horizon called the Lower-Middle Aldridge Contact or “LMC” horizon. A historic drill hole, IRISH-05-1, drilled on the NZOU Property in 2005 intersected Sullivan Time at a depth of 1210 to 1342 metres.
In the assessment report of 2005 on the NZOU Property the following was concluded, “This is the most significant Sullivan Time intersection achieved to date in the Panda/Irishman creek area because it is: thicker; consists of varied facies including a fragmental; contains more base metal sulphide; and is intruded by a gabbro/granofels complex. The geochemical analyses of the core from 1223 to 1229 metres and 1262 to 1306 metres indicate the longest, best mineralized section is 1270 to 1306 metres – 36 metres of 689ppm Pb and 1297 ppm Zn. Within this is 6.0 metres of 1717 ppm Pb and 2725 ppm Zn. The highest one metre sample ran 0.29% Pb and 0.39% Zn. Similar but somewhat weaker mineralization continues within the footwall fragmental, but this was not sampled. Collectively these features indicate this drill hole intersection is closer to a vent system and a possible lead-zinc-silver deposit.”
Ian Gendall, President of DLP commented: “Now that we have a significant land package in a very prospective part of the Purcell Basin for a Sullivan-type target we are encouraged to follow-up with additional magnetotelluric (MT) geophysics and drilling. The additional MT planned and compilation of geological sections across the areas, with current drill information from the DD property and additional information from historic holes on the Moby Dick (DLP) and NZOU properties, will help us focus in on further drill targets later this year and early next year.”
The foregoing geological disclosure and content of this news release has been reviewed and approved by Dave Pighin, P.Geo. a qualified person for the purpose of National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Pighin is the consulting geologist for DLP.
About DLP Resources Inc.
DLP Resources Inc. is a mineral exploration company operating in Southeastern British Columbia, exploring for Base Metals and Cobalt. DLP is a wholly owned subsidiary of MG Capital Corporation listed on the TSX-V, trading symbol DLP. Please refer to our web site http://www.dlpresourcesinc.com for additional information.