BOISE, Idaho, April 18, 2012 /PRNewswire/ -- Thunder Mountain Gold, Inc. (the Company) (TSX-V: THM; OTCQB: THMG), is pleased to announce that it entered into a Letter of Intent (LOI) with a Boise, Idaho based private equity group to advance the Company`s South Mountain Mine toward production. The private equity group can earn up to 75% participating interest in the project with an investment of eighteen million dollars.
Terms of the LOI agreement include a buy in payment of one million dollars, paid to the Company upon execution of the agreement, a work commitment of two million dollars the first two years, and fifteen million dollars committed to be spent into the project in the following two years under a plan to move the project through feasibility and into production.
"This agreement is an example of the Company's focus to enter into creative deals that lower the Company`s risk, while maintaining the upside exposure to gold, silver and other metal production, with no dilution to Thunder Mountain Gold shareholders", commented Eric Jones, President and CEO of Thunder Mountain Gold. As noted, all expenditures related to the development of the projected underground mine are being paid by Thunder Mountain's joint venture partner, with a total expected development budget of USD $18 million.The project will be managed by a joint management committee assembled by both companies. Work is due to start on the project at the end of May, 2012, with plans for additional drilling, and re-modeling the 9 mineralized zones to aid in the development of this valuable resource. It is envisioned that the project will be a 500 to 1,000 ton per day operation when in production.