Wildcat has been informed by San Gold (the operator) that drilling has commenced on the Mike Power property, west of "Gold Creek" and the town of Bissett and north of the intrusive contact. Pursuant to the option agreement, San Gold plans to drill approximately 5,000 metres in 25 holes on Wildcat's Mike Power, Poundmaker and Jeep properties during the winter drilling season. By mid-February the operator will add a second drill, to be located on the Jeep property, north of the former Jeep gold mine which produced approximately 14,000 ounces of gold grading 0.78 ounces per ton from 1948 to 1950.
The drilling program is investigating targets generated by an airborne electromagnetic, magnetic and radiometric survey commissioned by San Gold over both companies' properties north and west of the Ross River intrusion. Flight lines on approximately 33 metre (100 foot) intervals were completed over selected portions of the Mike Power property, while the remainder of the survey area was completed on 100 metre line spacing. Total expenditures for the work program are planned to be approximately $1 million with completion of drilling expected by the end of March, 2012.
Under the terms of the option agreement, San Gold can earn an 80% interest in Wildcat's Mike Power, Jeep, and Poundmaker properties by spending $5.1 million for exploration on the properties over a four-year period and by making $1 million of cash payments and subscribing for $1 million of Wildcat shares over a three-year period (see news release dated August 10, 2011). To date Wildcat has received the first cash payment of $250,000 and has completed a private placement of shares to San Gold for a further $250,000 in accordance with the terms of the agreement (see news release dated September 29, 2011). Upon completion of the earn-in, Wildcat may elect to maintain a working interest in the properties of up to 20% or it may elect to be diluted to a 2% carried net smelter royalty payable on all production from the properties.
John Knowles, Wildcat's CEO commented, "San Gold's drill programs will help to achieve our objective of rapidly advancing the optioned properties. While the Rice Lake projects are being drilled, we will continue to work on other exciting Wildcat properties including Burntwood where our recent drilling results include an intersection of 152 g/t gold over one metre core length. In addition, we are finalizing several drill targets for copper-zinc at our Reed Lake property, a few kilometres north of HudBay Minerals Inc.'s $71 million Reed copper mine construction project."