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GoWest secures $10 million loan and completes Phase One drilling at Bradshaw

Dec 28, 2023

Gowest Gold Ltd. has completed its previously announced 5,000-metre Phase 1 surface diamond drill program, and has entered into a loan agreement for an aggregate principal amount of up to $10,000,000 to fund additional exploration at its North Timmins Gold Project. The additional exploration will be focused on the Corporation's 100% owned Bradshaw Gold Mine. This newly funded program is part of a larger planned program aimed at expanding the mineable resource at Bradshaw, as well as to further test other parts of the Corporation's NTGP area where notable gold has also previously been intercepted (see Gowest news releases dated November 14, 2023, September 15, 2023, June 26, 2023, June 1, 2020, and June 27, 2019).

Loan Agreement

On December 22, 2023, the Corporation entered into a loan agreement (the "Loan Agreement") with Greenwater Investment Hong Kong Limited (the "Lender"), an investment company incorporated under the laws of Hong Kong, pursuant to which the Lender has agreed to advance to the Corporation an aggregate principal amount of up to $10,000,000. 

The loan will be funded in tranches on a monthly basis from the date of the Loan Agreement until October 2024, in accordance with a funding schedule set out in the Loan Agreement. Each tranche is conditional on Gowest achieving certain milestones set out in an exploration plan, and budget agreed to with the Lender. The loan is unsecured, and funds advanced under the Loan Agreement will bear interest at a rate of 12% per annum. The outstanding principal balance, together with accrued and unpaid interest thereon, will be due and payable on December 31, 2025. The outstanding principal balance and accrued interest may be prepaid by the Corporation at any time during the term of the loan without penalty.

The proceeds of the loan are to be used to continue the Corporation's previously noted exploration program at Bradshaw as well as on previously identified areas of the NTGP with the objective of increasing Gowest's gold resources.

As the Lender is a significant shareholder of the Corporation, holding approximately 26.02% of the issued and outstanding common shares of the Corporation, the entering into of the Loan Agreement constitutes a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Additional disclosure required by MI 61-101 concerning the related party transaction is set out below under the heading "Additional Related Party Disclosure". 

The Loan Agreement remains subject to the final approval of the TSX Venture Exchange.

Dan Gagnon, President and Chief Executive Officer of Gowest, said, "This significant loan from one of our major shareholders clearly demonstrates their faith in our team's ability to expand our current mineable resources and reserves at the deposit. As we continue to prepare to return to mining at Bradshaw, we are progressing our exploration work both at Bradshaw and to further test other parts of the NTGP, where we have already intercepted gold mineralization. Our entire team is looking forward to a very exciting upcoming year for us and our shareholders."

Overview-Phase 2: 

Plans for this new $10 million exploration program on the NTGP include evenly splitting the funds between underground drilling and surface exploration. The surface drilling program, budgeted at $5 million, mainly entails diamond drilling. A total of 16,500 m is planned for the central to western portion and the depth extension of the Bradshaw deposit (10,000 m), the Sheridan Zone (2,500 m), the Roussain Zone (2,500 m), as well as Induced Polarization (IP) targets (1,500 m). An IP geophysical survey is also planned for the surface exploration program to generate new targets on the NTGP area.

Phase 1 Diamond Drilling Update 

  • A total of 5,055 m of drilling was completed as of November 30. This consists of 16 holes completed on the eastern to central portion of the Bradshaw deposit (Table 1).
  • The 5,000-metre Phase 1 drill program was finished with the completion of hole GW23-335, and additional exploration drilling is underway, funded through the above-noted loan agreement. 
  • Highest intercept: 8.12 grams per tonne (g/t) gold (Au) over 2.5 m in hole GW23-332 from the HW4 zone within 2.95 g/t Au over 15 m. 
  • Several new hanging wall (HW) zones were cut, with the highest being 6.53 g/t Au over 1.6 m in hole GW23-332.

The 5,000-metre Phase 1 drill program was finished in November with the completion of hole GW23-335. A total of 16 drill holes (5,055 m) were drilled in the program (Table 2), from which all gold results have been received.

Ten significant gold intersections were encountered in three recent holes: GW23-332, GW23-334 and GW23-335 (Table 1). The highest intersection received was 8.12 g/t Au over 2.5 m in hole GW23-332 from the HW4 zone. Encouragingly, several new hanging wall zones were encountered in the holes with the highest being 6.53 g/t Au over 1.6 m, 6.08 g/t Au over 1.9 m, and 6.03 g/t Au over 1.7 m. Two holes also intersected the HW4 Zone, returning 2.95 g/t Au over 15 m, including 8.12 g/t Au over 2.5 m (GW23-332) and 4.62 g/t Au over 1.5 m (GW23-334). Other significant zones encountered were the YDA zone in hole GW23-332, which returned 5.5 g/t Au over 1.4 m, the HW1 zone in hole GW23-335, which returned 5.26 g/t Au over 1.8 m, and the HW2 zone in hole GW23-334, which returned 4.42 g/t Au over 1.80 m.

Board of Directors Appointment

Gowest is also pleased to announce the appointment of Mr. Fuhua Zhou to the Corporation's Board of Directors. A Professor-Level Senior Engineer in Geology and Mineral Resources, Mr. Zhou has worked in China in progressive positions in the mining industry for over 30 years. He has worked on mining operations as a mine manager and technical director, as well as a senior executive in large investment and development organizations in roles including general manager and chairman. He is currently the General Manager of Inner Mongolia Yinshi Industrial Co., Ltd.

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