Rye Patch Gold Corp through its wholly owned subsidiary Rye Patch Gold US Inc. announces that it has entered into a joint venture agreement with Barrick Gold US, US Gold Corp and Chapleau Resources (Magellan Minerals Ltd - the Patty Joint Venture - for the Patty project located in Eureka County, Nevada.
The Patty project consists of 616 unpatented lode claims covering 53.1 square kilometres (13,120 acres) and is located immediately south of Rye Patch's 100% owned Garden Gate Pass project; 10 kilometres south-southeast of Barrick Gold's recently announced Red Hill and Goldrush discoveries; and east and adjacent to US Gold's Tonkin Springs project along the western margin of the Northern Nevada Rift (NNR). Geologically, the project straddles the same geologic environment as Barrick's new gold discoveries at Red Hill and Goldrush. The project has a non-NI43-101 compliant resource inventory plus past drilling with gold in three of the five target areas. With this acquisition, Rye Patch now controls more than 65 square kilometres along the prolific Cortez gold trend.
The target areas are the Patty Resource, Patty North, Western Rift, West Geyser, South Pediment, and Indian Creek. At the Patty Resource, gold is localized along the regional Simpson Park thrust system and the east-northeast trending OS structural zone. The non-compliant resource is approximately 40,000 ounces of gold and is open in several directions. Mineralization is near surface with expansion potential to the north and east. The bulk of the known resource is within siliciclastic units of the upper plate. Rye Patch will focus on exploration along strike of the Simpson Park thrust by drilling more favorable carbonate lithologic units beneath the thrust zone.
At the Patty North target, mapping shows a major structural intersection between the Simpson Park thrust fault and a north-south structural corridor. Samples of float material in the area have returned gold values ranging between 0.2 g/t Au to 1.4 g/t Au. The Patty North target is roughly 1.5 kilometres north of the Patty Resource and is geologically connected by the Simpson Park thrust fault. The target is within lower plate carbonates in the structural intersection beneath the Simpson Park thrust fault.
The Western Rift target lies along the western margin of the NNR within a similar geologic environment as Barrick's new gold discoveries. In 2005, Placer Dome drilled gold in Devonian carbonate rocks along the western margin of the NNR. Drillhole PIR05-010 intersected 102 metres grading 0.32 g/t gold including 1.5 metres grading 4.16 g/t gold. Follow up drilling focused along the east-northeast OS fault system. The gold intercept in PIR05-010 may have new significant meaning with the discovery of Barrick's Red Hill and Goldrush deposits. The geologic setting and host lithologies are similar and mineralization could be associated with a north-south trending structural zone along the western margin of the NNR. The gold mineralization is open to the north, south and east.
Located 2 kilometres north of the Western Rift target, drillholes KIR-006 and KIR-007 define the West Geyser drill target. Drilling in the area intersected altered lower plate carbonate lithologies with high levels of arsenic and antimony (trace elements associated with Carlin-type gold deposits). This target also lies along the western margin of the NNR within similar geology and structural setting to Barrick's new discoveries.
The South Pediment target is within an area of alluvial and volcanic cover. Historic drilling in the area intersected dolomite and limestone formations of the lower plate carbonate section and returned low grade gold mineralization -- 21.3 metres grading 0.56 g/t gold. The area requires additional evaluation and drilling to follow up on this blind, pediment covered discovery.
The Indian Creek target encompasses the southern extension of the Cortez Hills inversion structure. The structural zone is highly deformed with surface rock-chip samples returning gold in the 100 to 200 parts-per-billion (ppb) gold range. Additional field mapping and rock-chip sampling are required to advance the target to a drilling stage. Initial mapping and cross section work show the target has promise.
The Patty project represents a tremendous opportunity along the prolific Cortez Gold Trend. Since 1991, the Cortez Trend has delivered over 39-million ounces of gold, and in August 2004, the district produced its ten millionth ounce of gold. Barrick's September 6, 2011, discovery announcement suggests the upside potential of the trend continues to the south, and our 100% owned Garden Gate Pass project and the Patty project could be the next nuggets along the golden chain. Patty has similar geologic characteristics to the recent gold discoveries along with a small resource and gold in several drillholes in the right rocks along the strike projection of the gold corridors. Having the financial and technical capabilities of Barrick and US Gold as our partners ensures a new discovery can be taken to the next phase. We are very excited to start the exploration programs, commented William C. (Bill) Howald, the Company's President and CEO.
Under the terms of the agreement, Rye Patch has the right to earn a 60% undivided interest in the Patty Project by spending US$5 million over a five-year period, of which the first year's expenditure of US$500,000 is committed. As part of the commitment, Rye Patch will reimburse the Patty Joint Venture for $93,120 of lease payments and one half of federal claim rental fees paid by the Patty Joint Venture in 2011. Once Rye Patch completes its earn in, Rye Patch will control 60% undivided interest with Barrick Gold, US Gold and Chapleau Resources having 24%, 12%, and 4% respectively.
Upon completion of the earn-in amount by Rye Patch, the Patty Joint Venture will have the right to back in to a 60% interest by expending US$15 million over a five year period, of which amount one-third will be paid in cash to Rye Patch. The Patty Joint Venture must exercise its back-in right within 90 days of Rye Patch completing its earn in. If the Patty Joint Venture completes its back in, Rye Patch will control 40% undivided interest with Barrick Gold, US Gold and Chapleau Resources having 36%, 18%, and 6% respectively.
Upon completion of the back in, Rye Patch's remaining 40% will be carried until production commences on the property. The Patty joint venture may recover such carried costs, plus interest at the prime rate plus 2%, from 80% of Rye Patch's share of production from the property. In addition, the Patty Joint Venture is required to spend a minimum of US$500,000 annually on the property until the commencement of production.
The core Damale claims retain a 3% NSR and an annual 1,500-metre (5,000-foot) drill commitment; however, for 2012, there is a 3,300-metre (10,800-foot) drill commitment that is required to be completed before December 31, 2012.
As announced on May 18, 2010, May 11, 2009, and June 2, 2009, in respect of the Lincoln Hill, Wilco, and Jessup projects, Rye Patch Gold's resource inventory along the Oreana trend now totals 1,182,780 ounces of gold and gold equivalent in the measured and indicated category plus 2,727,100 ounces of gold and gold equivalent in the inferred category. Table 1 summarizes Rye Patch Gold's precious metal inventory in Nevada, USA.
Mr. William Howald, AIPG Certified Professional Geologist #11041, Rye Patch Gold's CEO and President, is a Qualified Person as defined under National Instrument 43-101. He has verified the information contained in, and has reviewed and approved the contents of, this news release.
Rye Patch Gold Corp. is exploring well-known mineral trends in Nevada - the world's fourth-richest gold region. Starting with 150,000 inferred ounces of gold in mid-2007, this well-funded Company now has 1.2-million ounces of gold and gold equivalent in the measured and indicated category, plus 2.7-million ounces of gold and gold equivalent in the inferred category. Rye Patch Gold is a Tier 1, Nevada-focused and discovery-driven company seeking to build a sizeable inventory of gold and silver resource assets in the mining friendly state of Nevada, USA. The Company's seasoned management team is engaged in acquisition, exploration and development of quality resource-based gold and silver projects. Rye Patch Gold is developing assets along the emerging Oreana trend - the advanced-stage Wilco, Lincoln Hill, Jessup, and Gold Ridge projects - located in west-central Nevada, and is exploring 66 square kilometres along the Cortez trend near Barrick's two new gold discoveries. The Company has established gold and silver resource milestones and time frames in order to build a premier resource development company. For more information about Rye Patch Gold, please visit our website at www.ryepatchgold.com.
On behalf of the Board of Directors
William C. (Bill) Howald, CEO & President
For additional information contact:
Rye Patch Gold Corp
Tel.: (604) 638-1588
Fax: (604) 638-1589