Tri-Valley Corporation (NYSE Amex: TIV) today announced Select Resources Corporation, Inc. (“Select”), its wholly-owned minerals subsidiary, executed a Definitive Agreement with US Gold Corporation (“US Gold”) (NYSE and TSX: UXG) on July 1, 2011, for a four-year Exploration Lease and Purchase Option Definitive Agreement (the “Definitive Agreement”) with respect to Select’s Richardson Minerals Project (“Richardson”) in Alaska. Under the terms of the Definitive Agreement, as outlined in the previously announced letter of intent, US Gold will acquire an exploration lease for Richardson, along with an exclusive option to purchase a 60% interest in the project and enter into a joint venture with Select for its development.
“The Definitive Agreement with US Gold was executed on schedule, and exploratory field work on the Richardson site began on July 5
,” said Maston N. Cunningham, President and CEO of Tri-Valley Corporation. “We look forward to working with US Gold on the exploration and development of the Richardson Minerals Project to determine the potential value of prospective intrusive-related gold mineralization, which has been indicated by previous geologic studies. With this agreement, Select will reduce its operating costs by approximately $200,000 annually. In addition, with the signing of the Definitive Agreement, Select received its first Option Payment of $200,000 from US Gold, as provided in the Definitive Agreement.”
Richardson Project and Definitive Agreement
Richardson is located 115 kilometers southeast of Fairbanks, Alaska, and now covers an area of approximately 55 square miles following the recent staking of about 9 square miles of new claims. Avalon Development Corporation, an independent geological consulting firm based in Fairbanks, recently completed an NI 43-101 report on Richardson for Select that identified areas of potential intrusive-related gold mineralization on the site.
US Gold’s option to purchase a 60% interest in Richardson will vest upon completion of $5 million in exploration expenditures and 30,000 feet of core drilling during the term of the Definitive Agreement. The parties have agreed that US Gold may terminate the Definitive Agreement after completing $2.2 million in exploration expenditures and performing 15,000 feet of core drilling at Richardson, which is required during the first two years of the agreement. Should US Gold elect to terminate the agreement, Select will retain its 100% interest in Richardson. Select received a $200,000 Option Payment upon execution of the Definitive Agreement and is entitled to receive another $100,000 upon reaching the first anniversary of the agreement. Select is also entitled to receive additional Option Payments of $100,000 for each of the remaining two years of the exploration lease period if US Gold exercises its option.