West Kirkland Advances TUG Gold Project

 

VANCOUVER, BC - West Kirkland Mining Inc. reported that Newmont Mining Corporation has exercised its rights under the December 2010 Agreement between West Kirkland and Fronteer Development to acquire 35% of certain private mineral rights for six sections of the TUG property in Utah, which hosts a NI43-101 compliant gold/silver resource. The rights were held by non-active third parties and this acquisition converts the 35% into a participating interest held by Newmont within the TUG option agreement. West Kirkland recently secured the rights and Newmont then elected to acquire them under its area of interest rights in the December 2010 agreement. West Kirkland continues to participate in an Exploration and Development Agreement where they can earn up to a 60% interest over all of the TUG deposit and would be the operator of the project. A royalty of 1.4% net smelter return on the acquired property will be payable.

This transaction significantly consolidates the ownership of the TUG deposit and allows the next stage of evaluation, engineering and permitting of the TUG deposit to move forward.

Under the terms of the December 2010 Agreement, West Kirkland can earn up to a 60% interest in the TUG property by spending an aggregate of $4,000,000 in exploration expenditures. After West Kirkland earns its interest, the Company and Newmont have a one-time option to both participate in the property on a pro-rata basis with each party contributing funds based on ownership. Newmont also holds a 40% interest in the balance of the sections over the TUG deposit. Newmont continues to be a significant shareholder of the Company, with approximately 9.94% of the issued and outstanding shares of West Kirkland.

In addition, West Kirkland has notified Newmont that the Company has completed the first earn-in on the TUG property as defined by the December 2010 agreement. Newmont is required to register West Kirkland as a 51% title holder of the TUG property. The Company has also notified Newmont of its intention to complete its second earn in right, taking West Kirkland to a 60% interest in the TUG property. To complete its second earn in right, the Company is required to spend an aggregate of $4,000,000 on the TUG property. To date, West Kirkland has spent approximately $3,300,000 on the TUG property and to complete its second earn in right, the Company has to spend a further $700,000.

West Kirkland is currently designing and permitting a drill program to confirm and upgrade the TUG gold/silver resource and provide material for metallurgical studies. The Company intends on completing a Preliminary Economic Assessment (PEA) on the TUG deposit, based on a shallow open pit mine plan targeting the near surface portion of the deposit.

Concurrent with the PEA, West Kirkland will begin permitting a mining operation on the TUG property. TUG has the advantage of being located within the State of Utah where permitting on state lands is under the oversight of the Department of Oil Gas and Minerals, which incorporates a "one window" approach to permitting.

The TUG property is located in Box Elder County Utah. West Kirkland is earning its interest in the TUG property through an option agreement with Fronteer Gold (now Newmont). The TUG property hosts a shallow oxidized gold resource that was extensively drilled by previous operators, including Noranda, Phelps Dodge and Western States Minerals. Upon optioning the property, West Kirkland completed the first three-dimensional compilation of the historic data and expanded the resource through drilling. West Kirkland completed the first NI 43-101 compliant resource estimate on the TUG deposit on May 29, 2012. The inferred TUG resource was estimated by Caracle Creek International Consultants to be 679,000 gold equivalent ounces contained in 27,110,000 tonnes grading 0.49 g/t Au and 15.8 g/t Ag using a cut-off 0.1 g/t Au.

The company's address is Suite 328, 550 Burrard Street, Vancouver, BC V6C 2B5, (604) 685-8311, fax: (604) 484-4710.