Headwater, Newcrest to begin drilling late June

Jun 20, 2023

2023-06-20 07:22 ET – News Release

Mr. Caleb Stroup reports

HEADWATER GOLD ANNOUNCES PROPOSED 2023 EXPLORATION ACTIVITIES ON NEWCREST FUNDED EARN-IN PROJECTS

Headwater Gold Inc. has outlined anticipated 2023 exploration activities for projects under earn-in agreements with Newcrest Mining Ltd. announced on Aug. 16, 2022, and May 9, 2023.

Highlights

Exploration activities on earn-in projects in 2023 expected to include:
- Spring Peak — up to 11,500 metres of drilling, geophysics, additional geologic mapping and environmental baseline studies;
- Midas North — up to 3,500 metres of drilling;
- Mahogany — up to 2,000 metres of drilling;
- Lodestar — geological targeting, geophysical surveying and drill permitting.
Drilling is estimated to commence in late June, 2023.
As the current operator, Headwater is entitled to earn a 10-per-cent management fee on earn-in exploration expenditures.
Upon completion of the above work programs, Headwater estimates that Newcrest will have satisfied the minimum spending commitments for the Spring Peak, Midas North and Mahogany agreements but will not yet have met the spending threshold required to earn an initial 51-per-cent interest in any of the projects.

Caleb Stroup, the president and chief executive officer of the company, states: “We are extremely pleased to announce the anticipated exploration activities across our earn-in projects funded by Newcrest this year. We believe the magnitude of these exploration programs further demonstrates the confidence placed in our team and the quality of our assets. This drill season marks an exciting phase in the company’s evolution, as we aggressively scale up drilling activities and advance our mission of adding value through exploration. Newcrest’s 2023 funding will enable a considerably larger program at the Spring Peak project, focused on expanding the two discoveries made in 2022. Including previously announced drill plans at our 100-per-cent-owned Katey project, we anticipate this year to see over 20,000 metres of drilling completed on Headwater projects. Our partnership with Newcrest offers shareholders a rare opportunity to gain exposure to a substantial amount of partner-funded greenfields exploration in a Tier 1 jurisdiction, in addition to pure upside from our 100-per-cent-owned and operated exploration projects, while minimizing dilution at the corporate level.”

About the Spring Peak project

The Spring Peak project is located in the Aurora mining district of west-central Nevada, approximately 50 kilometres southwest of the town of Hawthorne. The project adjoins Hecla Mining Company’s past-producing Aurora mine complex, where existing infrastructure includes a 350-ton-per-day mill, several production water wells and high-voltage three-phase power.

A multirig drill program totalling up to approximately 11,500 metres is currently scheduled to begin in July, 2023. The primary objective of the drill program will be to further define and expand the Disco zone along strike and down dip at approximate 50-metre increments. Several drill pads are fully permitted and already constructed to facilitate testing of the Disco zone over an initial strike length of approximately 750 metres. Several diamond core holes have also been designed to test the potential of the newly discovered Opal Ridge zone at depth below relatively shallow high-grade mineralization encountered in reverse circulation drill hole SP22-14 (see Headwater new release dated March 2, 2023).

Headwater holds an option to acquire a 100-per-cent undivided interest in the Spring Peak project from Orogen Royalties, subject to retained royalties and subject to Newcrest’s option to acquire up to 75 per cent of the project following certain expenditures and preparation of a prefeasibility study within a designated time frame.

About the Midas North project

Headwater’s Midas North project adjoins Hecla’s past-producing Midas mine complex and covers a large hydrothermal alteration cell, extending at least four kilometres in strike and one kilometre in width. Extensive epithermal alteration exists on the project, including widespread zones of high-level chalcedonic to opaline silica flooding, clay alteration and local sinter formation, including fossilized geyser vents. The company believes the project has potential for high-grade epithermal vein style mineralization at depth.

A multirig, mixed reverse circulation and diamond core drill program has been planned and is currently scheduled to commence in August, 2023. Authorization for drilling has been granted by the Bureau of Land Management and drill contracts are in place. The initial Midas North drilling is expected to consist of an initial eight to 12 holes with drill depths ranging from 250 metres to 400 metres. This program will represent the first known exploration drilling campaign within the Midas North project area.

About the Mahogany project

The Mahogany project is located in southeastern Oregon, 20 km northwest of Integra Resources’ DeLamar deposit. Surface alteration at Mahogany is typical of a high-level epithermal system.

Headwater’s initial drill program at Mahogany completed in late 2021 consisted of five diamond core drill holes totalling 810 metres (see Headwater news release dated Jan. 27, 2022). Drilling confirmed the presence of structurally controlled high-grade gold zones, including a drill intercept that returned 9.37 grams per tonne gold over a drilled thickness of 0.73 metre in hole MH21-02. Multiple priority targets remain to be tested in a two-rig drill program scheduled to commence in late June, 2023.

About the Lodestar project

The Lodestar project is located in the Aurora mining district of west-central Nevada and adjoins Hecla’s past-producing Aurora mine complex, where existing infrastructure includes a 350-ton-per-day mill, several production water wells and high-voltage three-phase power. The project is located approximately 10 kilometres north of the company’s Spring Peak project, where Headwater recently announced the new Disco and Opal Ridge high-grade discoveries (see Headwater news release dated March 2, 2023).

About Headwater Gold Inc.

Headwater Gold is a technically driven mineral exploration company focused on the exploration and discovery of high-grade precious metal deposits in the Western United States. Headwater is aggressively exploring one of the most well-endowed and mining-friendly jurisdictions in the world with a goal of making world-class precious metal discoveries. Headwater has a large portfolio of epithermal vein exploration projects and a technical team comprising experienced geologists with diverse capital markets, junior company and major mining company experience. The company is systematically drill testing several projects in Nevada, Idaho and Oregon and in August, 2022, and May, ,2023 announced a significant transaction with Newcrest Mining Ltd. where Newcrest acquired a 9.9-per-cent strategic equity interest in the company and entered into several earn-in agreements on Headwater’s projects.

We seek Safe Harbor.

https://headwatergold.com/