TORONTO, June 18, 2014 /CNW/ - Atlanta Gold Inc. (TSXV: ATG; OTCQX: ATLDF) (the "Company") announced that its wholly-owned subsidiary, Atlanta Gold Corporation ("AGC"), has reached an agreement with Knife River Corporation ("KRC") whereby KRC will contract mine on AGC's behalf, certain patented lode mining claims known as the Neal Property, located approximately 15 miles from Boise, Idaho. Daisy Mining & Land, LLP leased the claims to KRC which then assigned key provisions of the lease to AGC. AGC staked an additional seven contiguous claims on public land that was open to mineral entry. Under the terms of the agreement, KRC will mine and transport the mineralized materials from the Neal Property approximately 23 miles, to KRC's property located on Amyx Lane for crushing and delivery to AGC. AGC will process the materials at the KRC property. In addition to the contract mining and transportation costs, AGC will be responsible for payment of a tonnage royalty of US$3 per dry ton of delivered tonnage and a 3% net smelter return royalty payable to the owner of the Neal Property.
Processing of the material from the Neal Property will enable AGC to further test and improve upon the processing equipment and procedures (described in the Company's news release of June 10, 2014) prior to implementing the process at AGC's Atlanta Project on the bulk sample scheduled to be taken in 2014. The agreement with KRC will also enable the processing of material from the Neal Property to continue during the winter months when the Atlanta Project is largely inaccessible.
To assist in funding the expenditures necessary to acquire the processing equipment and commence processing, the Company has reached an agreement with a corporation controlled by Eric Sprott to borrow US$600,000. The loan is unsecured and non-interest bearing and is to be repaid by delivery to the lender of 1,000 troy ounces of gold (or the cash equivalent thereof) payable in installments over an 18-month period. The loan will be convertible at the lender's election at a conversion price of C$0.05 during the initial 12 months and at C$0.10 per share thereafter. The lender will also receive a 5-year option to purchase, solely from gold produced from the Neal Property, up to 2,500 ounces of gold at US$1,400 per ounce. The financing transaction is subject to the approval of the TSX Venture Exchange.
"Having property that has access in all seasons with similar metallurgy to Atlanta will advance the research required to verify the Company's objective of producing a mined product with the least environmental impact. This is also an opportunity for the Boise operations to provide work for seasonal employees to be extended to a longer period. It will reduce the turnover and attract qualified and experienced personnel. The network of all involved to achieve this opportunity has been encouraging," said Ernest Simmons, President and CEO of the Company.
About the Company
Atlanta Gold Inc. holds through its 100% owned subsidiary, Atlanta Gold Corporation, leases, options or ownership interests in its Atlanta properties which comprise approximately 2,159 acres (8.74 square kilometres) located 90 air kilometers east of Boise, in Elmore County, Idaho. A long history of mining makes Atlanta very suitable for development of new mining projects. The Company is focused on advancing its core asset, Atlanta, towards mine development and production.
Forward-Looking Information
This news release contains forward-looking information and forward-looking statements (collectively "forward-looking statements") within the meaning of applicable securities laws, including with respect to the completion of the loan financing, the acquisition of the processing equipment, the completion of a bulk sample at the Atlanta Project and the successful application of the process equipment and system to the mineralized material removed from the Neal Property and the Atlanta Project, the respective timing thereof and the impact on recruitment and retention of personnel. Such are based upon assumptions, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors that management believe to be reasonable and relevant. These assumptions include those concerning the receipt of the approval of the TSX Venture Exchange, the achievement of recovery objectives, the generation of an additional bulk sample, the completion of additional financings, the availability of equipment and manpower, the ability to achieve operating and cost estimates and general business and economic conditions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements and accordingly, readers should not place undue reliance on those statements. Risks and uncertainties that may cause actual results to vary include, but are not limited to, the Company's limited financial resources and its ability to raise sufficient funds on a timely basis to fund the capital and operating expenses necessary to carry out its planned initiatives; the ability to achieve recovery objectives; fluctuations in resource prices and currency exchange rates; the speculative nature of mineral exploration and mining (including with respect to the interpretation of geology, continuity, size and grade estimates and the recoverability of resource estimates); operational and technical difficulties which could increase operating and/or capital costs; risks and hazards associated with the business of mineral exploration, development and mining, including environmental, health and safety hazards; changes in laws or regulations and the risk of obtaining necessary consents, licenses and permits; changes in general economic conditions and in the financial markets; as well as other risks and uncertainties which are more fully described in the Company's annual and quarterly Management's Discussion and Analysis and in other Company filings with securities and regulatory authorities which are available at www.sedar.com. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking statements and accordingly, readers should not place undue reliance on those statements. Readers are cautioned that the foregoing lists of risks, uncertainties, assumptions and other factors are not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements contained herein or in any other documents filed with securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
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SOURCE Atlanta Gold Inc.
