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Klondike Silver Corp. (TSX-v symbol: KS) (the ‘Company’) is pleased to announce that it has executed a binding Letter of Intent (‘LOI’) with Victory Mountain Ventures Ltd. (TSX-v symbol: VMV) (‘Victory’) to option a portion of the Silver Slocan Mining Camp located in south eastern British Columbia. The parties agree to use their best efforts to execute a definitive Option Agreement within 15 days.
The Agreement will allow Victory to acquire a 50% interest in the Silvana West and the Cody Creek claims by making payments to the Company and incurring exploration expenditures over a three year period. At the sole discretion of the Company, Victory will be able to earn an additional 25% of the project by making a lump sum payment of cash and shares to the Company.
Under the agreement, Victory will also be entitled to a royalty payment equal to 50% of net profit received from the sale of any newly discovered resources should exploration prove successful before the three year option has been satisfied. All agreement will be subject to TSX Venture Exchange approval.
The primary exploration focus will be on the silver-lead-zinc expansion potential to the west of the Silvana Mine located centrally in the Silver Slocan Mining Camp. As part of the Option Agreement, Victory and the Company will form a management committee to oversee all the exploration activities on the property, with the Company being the operator.
The map provided at this link (
http://www.klondikesilver.com/i/maps/longitude.jpg) illustrates the exploration potential between the Company’s Silvana Mine and the Standard & Mammoth Mines which are along strike to the west. The area labeled as the “Prospective Horizon” is where exploration will be focused as the existing underground mine structure will allow for underground drilling to explore the western extension potential.
The second land package offered in the option agreement are the Cody Creek claims located to the northeast and is believed to be along the same strike as the Silvana Mine. Cody Creek has excellent access and exploration potential containing several past producing mines.