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Home > News > Sage Gold Agreement with...

Sage Gold Agreement with St. Andrew Goldfields Will Give It 100 % of Clavos Gold Property

By Frank Giorno

Dec 9, 2013

Sage Gold Inc. has entered into an agreement with St. Andrew Goldfield to acquire the remaining 40% interest in the Clavos Gold property located in Timmins.

On completion of this agreement Sage will own 100% of Clavos, subject to certain pre-existing royalty interests. The closing of the transaction is subject to Sage fulfilling certain conditions of which include the requirement of Sage to securing financing prior to April 30, 2014, which is also subject to regulatory approval.

Nigel Lees, President and CEO of Sage Gold Inc. stated, "We are very pleased with this proposed transaction with our partner, St Andrew. By consolidating our interest, Sage believes that the Clavos project can be financed on a favourable basis."

According to the agreement, Sage will pay St Andrew $1,000,000 in cash, and enter into a two percent (2%) Net Smelter Return Royalty ("Royalty"). As part of the agreement Sage may purchase one-half of the Royalty by providing St Andrew written notice as well as a cash payment of $1,000,000, which will thereby reduce the Royalty rate to one percent (1%).

The NI 43-101 mineral resource estimate for Clavos shows “indicated mineral resources” of 1,258,400 tonnes at 4.81 g/t gold totaling 194,600 ounces of gold and “inferred mineral resources” of 796,000 tonnes at 4.7 g/t gold representing 120,000 ounces. These mineral resources are reported at a base case cut-off grade of 2.75 g/t gold and individual assays have been capped at 60 g/t gold. Information on Sage’s Preliminary Economic Assessment ("PEA") for Clavos which was completed on March 01, 2013, can be found on the corporate website at www.sagegoldinc.com.

Highlights of the Study include:

  • Net Present Value ("NPV") of $23.2MM (pre-tax) and $12.6MM (after-tax) at an 8% discount
  • Internal Rate of Return of 71% (pre-tax) and 47% (after-tax) based on USD$1500/oz of gold
  • Estimated annual production of approximately 20,000 oz. of gold per year
  • Initial Capex of $14.1 million
  • 2.0 year payback from start of production with 7 year mine life
  • Average head grade for gold ranging from 6.45 g/t in Year 1 to 4.37 g/t in Year 7
  • Project is fully permitted to initiate mining.

Qualified Person

R. Ritchie, P.Eng, an Independent Qualified Person as defined by NI 43-101. Mr. Ritchie visited the Clavos JV deposit property on several occasions between August to October, 2012, and provides overall responsibility for the technical content of this Press Release which includes the mining study CAPEX and OPEX cost estimates and the PEA. Mr. Ritchie has read and consents to the disclosure of the technical content of this press release.

For additional information please contact:

  • Sage Gold Inc.
    Nigel Lees
    President and C.E.O.
    416-204-3170
    416-260-2243 (FAX)

    Sage Gold Inc.
    Mike O'Brien
    Manager/Investor Relations
    416-204-3170
    416-260-2243 (FAX)
    www.sagegoldinc.com