VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 6, 2013) - Otis Gold Corp. ("Otis" or the "Company") (TSX VENTURE:OOO)(OTCQX:OGLDF) is pleased to provide the following update to its shareholders.
Oakley Gold Project Joint Venture
The Company is pleased to announce that its proposed joint venture allowing Lateral Gold Corp. ("Lateral") to earn up to a 100% interest in the Oakley Gold Project ("Oakley) over a 7.5 year period (see Otis News Release dated January 10, 2013) has been approved by the TSX-V. The initial cash and share payments have been received by the Company. To effect this joint venture, a separate agreement was signed with the minority owners of Oakley allowing Otis to increase its interest from 70% to 100% in exchange for two cash payments (the first which has been made and increases Otis' interest immediately to 80%). Additionally, a minor adjustment was made to the joint venture agreement in connection with future cash payments to be received upon Lateral exercise its right to move from an 80% interest to a 100% interest in Oakley.
Kilgore Gold Project
The Company has submitted a Plan of Operations to the Caribou-Targhee National Forest to build approximately 1,550 meters of roads into the North Target Area, located immediately adjacent to the existing Kilgore Gold Deposit and in an area that has recently achieved extremely strong drilling results (82.3 metres (m) of 0.95 grams per tonne gold (g/t Au) in hole 12 OKR-291, 121.9 m of 1.04 g/t Au, that includes 45.7 m of 1.52 g/t Au, in hole 12 OKR-292, and 83.8 m of 1.12 g/t Au, that includes 30.5 m of 2.10 g/t Au, in hole 12 OKR-294 - see Otis News Release date January 17, 2013). Upon receipt of the permit, four roads will be constructed in advance of a planned drill program.
The Company has been engaging in wide-ranging discussions with potential investors and strategic partners in connection with financing the ongoing development activities at Kilgore, including drilling, the initiation of a Preliminary Economic Assessment, environmental baseline studies and permitting activities. The current state of capital markets in the junior mining sector has created a challenging financing market. As a result, Company management has implemented a number of cost-cutting measures to reduce its monthly cash burn, while at the same time dedicating appropriate resources to the continued development of Kilgore.
States Otis President & CEO Craig Lindsay: "We are very mindful of the need to control costs, continue funding Kilgore and minimize any potential dilution to existing shareholders. We remain very excited about Kilgore's development potential, and are working diligently to advance the project. Given that we own 100% of Kilgore, the project is subject to no underlying royalties, and property maintenance costs are only $36,000 per year for our entire property portfolio, we are in a very good position to weather the ongoing downturn in junior financial markets."
About the Kilgore Gold Deposit
The Kilgore Gold Deposit contains a NI 43-101 Indicated Resource of 520,000 oz Au in 27.4 million tonnes at a grade of 0.59 g/t Au and an Inferred Resource of 300,000 oz Au in 20.2 million tonnes at a grade of 0.46 g/t Au. The deposit constitutes the continuous and contiguous Prospect Ridge, Mine Ridge and North Target areas, all referred to in prior Company news releases. The Kilgore Gold Deposit is a zoned low-sulfidation quartz-adularia epithermal hot-spring system hosted in volcanic rocks of Late Miocene age. Gold mineralization is of the classic disseminated, bulk-tonnage type similar to that comprising the classic and world-class size volcanic-hosted gold deposits at Round Mountain, Nevada and McDonald Meadows, Montana. K-Ar age determination on hydrothermal adularia tentatively dates mineralization at 5.3 Ma (Late Miocene). Gold mineralization is mostly controlled by a major northwest-trending structural zone, the Northwest Fault, and is closely associated with a series or set of northwest-trending, high-angle, en echelon rhyolitic to intermediate dikes and dike swarms. Additional host rock enclosing the dikes and sills and serving to contain a major portion of the deposit mineralization is a porous and permeable, ashy and rhyolitic lithic tuff unit. Further, sedimentary host-rock material containing a portion of the mineralization comprises basement sandstone and siltstone of the Aspen Formation of Cretaceous age.
About the Company
Otis is a resource company focused on the acquisition, exploration, and development of precious metal deposits in Idaho, USA. Otis is currently developing its flagship property, the Kilgore Gold Project, located in Clark County, Idaho.
Forward Looking Statement
This release and related documents may include "forward-looking statements" including, but not limited to, statements related to the interpretation of drilling results and potential mineralization, future exploration work at the Kilgore Project and the expected results of this work. Forward-looking statements are statements that are not historical fact and are subject to a variety of risks and uncertainties which could cause actual events to differ materially from those reflected in the forward-looking statements including fluctuations in the price of gold, cost of mining, inability to complete drill programs on time and on budget, and future financing ability. Words such as "believes," "plans," "anticipates," "expects," "estimates" and similar expressions should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to: uncertainties involving interpretation of drilling results, environmental matters, lack of ability to obtain required permitting, equipment breakdown or disruptions, and the other factors described in Otis' most recent Annual Report.
ON BEHALF OF THE BOARD
Craig T. Lindsay, President and CEO
This news release does not constitute an offer to sell or a solicitation of an offer to sell any securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
The TSX Venture Exchange has neither approved or disapproved of the contents herein.
