Carlin closes exploration deal with Barrick for Cortez

Dec 8, 2016

CARLIN GOLD CLOSES US$5 MILLION EXPLORATION AGREEMENT AND $500,000 PRIVATE PLACEMENT FINANCING

Carlin Gold Corp. has received TSX Venture Exchange approval for and has closed its previously announced exploration agreement and $500,000 private placement.

$5-million (U.S.) exploration agreement on Cortez Summit

The company closed its previously announced exploration and earn-in agreement with Barrick Gold Exploration Inc. on the company’s Cortez Summit property, Eureka county, Nevada. Under the terms of this agreement, Barrick has the right to earn a 70-per-cent interest in the property by making expenditures totalling $5-million (U.S.) by Dec. 31, 2020, of which $500,000 (U.S.) is a firm commitment to be completed by Sept. 1, 2017. Upon expenditure by Barrick of $5-million (U.S.), a limited liability company will be formed to own the property with membership interests owned 70 per cent by Barrick and 30 per cent by Carlin. In addition to its 30-per-cent working interest, Carlin will retain a 2-per-cent net smelter return royalty on future production to be paid on a pro rata basis according to membership interests.

About Cortez Summit

The company is encouraged that favourable lower-plate carbonate strata are present near the projection of the gold-bearing Fourmile structural corridor, at depths generally consistent with some of the mineralized drill holes in the north portion of Barrick’s neighbouring Goldrush discovery and the new high-grade drill holes at its Fourmile target. These geological features, described below, represent excellent exploration opportunities on the property, and the company looks forward to Barrick’s technical team bringing its expertise to bear on the exploration potential.

The 100-per-cent-company-owned Cortez Summit property is centrally located on the Cortez trend, contains a major gold endowment that exceeds 50 million ounces total gold produced, reserves and resources (Nevada Bureau of Mines and Geology annual mineral reports, Barrick annual reports). Production in 2015 at Barrick’s Cortez district operations was reported to be 999,000 ounces of gold at an all-in sustaining cost (AISC) of $603 (U.S.) per ounce (Barrick 2015 year-end report and fourth quarter results).

The property consists of 142 unpatented claims located in the southern Cortez Mountains between the historic Buckhorn and Horse Canyon mines, Eureka county, Nevada. Cortez Summit is located near Barrick’s 10.2-million-ounce Goldrush resources, of which 8.6 million ounces grading 10.6 g/t are reported to be in the measured and indicated category (Barrick 2015 year-end report and fourth quarter results). The property is contiguous with Barrick claims on all sides and on the west boundary adjoins the Fourmile exploration target area described by Barrick in its Feb. 22, 2016, news release. Barrick has advanced its Goldrush project though the prefeasibility stage, and envisions annual underground production of 440,000 ounces at average AISC of $665 (U.S.) per ounce. Barrick contemplates a mine life of 21 years with production beginning as early as 2021.

Carlin’s primary target is Carlin-style mineralization in a structural and stratigraphic setting in Paleozoic sedimentary rocks similar to that at the Goldrush resource. Much of this target is blind, being covered by Miocene-age postmineral basaltic andesite and interlayered gravels. The Fourmile structural zone trends for 1,370 m (4,500 feet) within the western side of the property. Carlin geologists are enthusiastic about the exploration opportunity of this geological target.

In August/September, 2012, the company completed an initial drill program on the southwest section of the property. The program consisted of seven vertical reverse circulation drill holes totalling 3,573 m (11,720 feet) ranging in depth between 450 and 550 m (1,500 and 1,800 feet). Drilling confirmed Carlin-type geology, alteration and geochemistry in the limited part tested in upper plate rocks but did not test lower plate stratigraphy.

In 2013, in order to explore for the deeper part of the stratigraphy which hosts mineralization at the Goldrush deposit, Carlin re-entered reverse circulation drill hole CS-12-2 with a core drill rig. This hole, when deepened from 536 m (1,760 feet) to 1,229 m (4,032 feet), encountered 198 m (650 feet) of lower-plate carbonate rocks below the Roberts Mountain thrust. Lower plate contained short intervals of anomalous gold values to 0.667 g/t as well as intervals of Carlin-type pathfinder elements including anomalous arsenic values (greater than 100 parts per million). Carlin-type alteration features include decalcification, silicification, clay alteration and calcite veining.

This core hole intersected the stratigraphic section which contains the gold-bearing horizons of the nearby major Cortez area deposits, and more specifically as stated by Harry Cook, PhD, a consultant to the company specializing in Paleozoic stratigraphy in Nevada, in his report: “Core CS12-2C strata are comprised of very favorable gold host rocks within both the Wenban Formation and Horse Canyon Formation. These strata are coeval with the nearby Wenban Fm. and Horse Canyon Fm. carbonate gold host strata that comprised the gold hosts in Barrick’s Goldrush discovery.” Exploration potential was further enhanced by two high-grade drill holes at Barrick’s Fourmile target north of its Goldrush resource and located adjacent to its Cortez Summit property. Barrick states that these holes have encountered mineralization “well above the average grade of the indicated and inferred resources at Goldrush,” for example 14.3 metres grading 31.7 grams per tonne (g/t) and 5.8 m grading 49.6 g/t (see Barrick news release dated Feb. 22, 2016). Mineralization at Fourmile is a different style than at Goldrush; although it is contained in similar lower plate units, it is within the contact metamorphic zone adjacent to the Mill Canyon stock. Barrick points out similarities in mineralization style to the Deep Star and Deep Post mines on the Carlin trend, two high-grade underground operations. Carlin’s six westernmost reverse circulation holes drilled earlier at Cortez Summit encountered contact metamorphic alteration interpreted to be related to the Mill Canyon stock. Barrick’s initial Fourmile target area success means, in the opinion of Carlin, in addition to the classic, passive, Carlin-type replacement-style mineralization displayed at other deposits in the area, Cortez Summit also has excellent potential for hosting higher-grade mineralization in calc-silicate altered rocks within the metamorphic aureole of the Mill Canyon stock.

$500,000 private placement

The company closed its previously announced non-brokered private placement of 10 million units, at a price of five cents per unit, to raise proceeds of $500,000. Each unit consists of one common share and one-half of one transferable share purchase warrant, each whole warrant entitling the holder to purchase one additional common share, at 10 cents per share, until Nov. 8, 2018. If the company’s shares trade on the TSX Venture Exchange at a price of 20 cents or more for 20 consecutive trading days, the warrants issued in respect to six million of the units are to be exercised within 10 business days after the notice has been given.

No finder’s fee or commission was paid in connection with the private placement.

All of the shares, warrants and any shares issued upon exercise of the warrants comprising the units are subject to a hold period until March 29, 2017, except as permitted by applicable Canadian securities laws and the TSX Venture Exchange.

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