December 17, 2012 For immediate release
Release: Series 13 Release 21 TSX Venture: TDC
TYHEE AMENDS ROYALTY AGREEMENT; THANKS DR. DAVE WEBB FOR LONG SERVICE TO THE COMPANY
VANCOUVER, British Columbia – Tyhee Gold Corp. (TSX Venture, TDC) (“Tyhee” or the “Company”) announces that it has reached agreement with the Company’s former President, Director and Chief Executive Officer, Dr. Dave Webb, amending the previous Net Smelter Royalty (“NSR”) Agreement on the Yellowknife Gold Project (“YGP”). It has been apparent that the previous royalty agreement, made in 2001 between Tyhee and Dr. Webb, has been an impediment for certain parties considering providing financial support to the Company as it advances the YGP towards production, targeted in 2015. While Dr. Webb sold this royalty to related companies in 2007, his related company agreed to significantly reduce royalty payments during the critical project pay-back period, which is projected to be between three and four years following the start of gold production. This significantly improves the Company’s ability to obtain financing, and the Company appreciates Dr. Webb’s continued commitment to make the YGP work.
All other outstanding issues between the parties have also been amicably resolved. With the conclusion of this agreement, the Company plans to accelerate its efforts in the design, permitting and construction phases of the YGP.
Dr Webb, who until December 2011 served as Tyhee’s President and CEO, has had a long and successful association with the Company, which has benefited substantially from his geological expertise. He used his specific knowledge of Archean gold deposits to identify and consolidate the four properties that now form the Yellowknife Gold Project. He also led the dedicated professional team that consolidated the land and built the gold resource up to more than two and a quarter million ounces. Under his leadership, Tyhee initiated the submission of applications for the permitting of Yellowknife mine and mill complex, which is currently in technical review. Since leaving Tyhee, Dr. Webb has been providing consulting services to other companies in Africa and North America, while developing other gold properties owned by his company.
Brian Briggs, P. Eng., Tyhee’s President and CEO commented, “We wish to thank Dr. Webb for his two decades of service to the Company, during which he laid the foundation for our transition from being an explorer to building the next gold mine in the NWT.”
Dr. Dave Webb added, “I am happy to have left Tyhee in strong and capable hands, ready to execute our vision of creating the newest and preeminent gold producer in the Yellowknife Gold Belt. I remain a significant shareholder and will continue to be available to offer my assistance to Brian and his team as needed.”
(Further detail regarding the original NSR may be found with the Company’s other documents filed on www.sedar.com as well as on the Company’s website (www.tyhee.com), including in “Volume 1 Executive Summary, Yellowknife Gold Project Feasibility Study, Northwest Territories, Canada” at http://www.tyhee.com/docs/yellowknife_fs_vol1_execsummary_final_21_aug_2012.pdf.)
About Tyhee Gold:
Tyhee is focused on developing the first gold mine on its flagship Yellowknife Gold Project ("YPG") in Canada's Northwest Territories. The project is located in the same prolific Archaen Greenstone Belt as the renowned world class "Con-Giant" deposit, which produced a combined 14 million ounces of gold. Tyhee is led by a veteran, project-driven, management team committed to aggressively advancing a permitting and development path targeted to enable mine construction to begin in 2014. An independent Feasibility Study ("FS")* has been completed, which estimated that, at a base-case gold price of US$1,400 per ounce and a projected 4,000 tonnes-per-day processing plant comprised of a conventional gravity-flotation-cyanide process and incorporating open-pit and underground mining methods on the Ormsby, Bruce Lake, Clan Lake and Nicholas Lake deposits, the YGP is estimated to return a pre-tax net present value (NPV) at a 5% discount rate of approximately $216 million and an internal rate of return of 20% based on initial estimated capital cost of $193 million (including a 10% contingency.) At current gold prices of approximately US$1,600 per oz., the YGP would have an NPV of $375 million, an IRR of 28% and a payback period of 30 months.
The study also estimated Proven and Probable mineral reserves(1) for the YGP at 20,433,000 tonnes at an average grade of 2.03 grams per tonne (“g/t”) gold, containing 1,334,000 ounces of gold, resulting in a mine-life of approximately 15 years. Tyhee’s technical team has identified six separate gold deposits in the YGP, including Ormsby, Bruce Lake, Clan Lake, Nicholas Lake and Goodwin Lake. These areas have a combined Measured and Indicated resource(2) estimated to total 1,715,000 ounces of gold contained in 27,115,000 tonnes at an average grade of 1.97 g/t, and Inferred resources of 487,000 ounces of gold contained in 5,774,000 tonnes at 2.62 g/t.
(1) The mineral reserve estimate for the YGP is shown above and was calculated by Bret C Swanson BE (Min), Principal Consultant, of SRK Consulting (U.S.), Inc. Effective Date of July 1, 2012. Reserves are inclusive of mineral resources.
(2) The mineral resource for the YGP shown above was estimated by Jeff Volk, P. Geo. of SRK Consulting (U.S.), Inc. Effective Date of July 1, 2012.
For further information please contact:
GT Investor Relations Inc.
O: 905 337-7673 C: 416 605-5120
| Brian Briggs
President – Tyhee Gold
T: 604 681-2877
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements in this news release, other than statements of historical facts, that address events or developments that the Company expects to occur, including statements regarding the expected payback period, the improved ability to obtain financing and plans to accelerate its efforts in the design, permitting and construction phases of the YGP are “forward-looking statements”. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. Factors that may cause actual results to vary from those made in the forward looking statements described in this document include: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; delays in obtaining approvals, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delays in completion of work necessary to complete the feasibility study, whether as a result of adverse weather conditions, contract or labour disputes, equipment failure, or response to regulatory enquiries in respect of permit applications; technological and operational difficulties encountered in connection with the activities of the company. This list is not exhaustive of the factors that may affect the forward looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the companies’ forward-looking information. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.