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Release: Series 14 Release 8 TSX Venture: TDC 

 

TYHEE GOLD CORP. – PRESIDENT’S REPORT

VANCOUVER, British Columbia (May 28, 2013) – Tyhee Gold Corp. (TSX Venture: TDC) (the “Company”) is pleased to announce the release of the following Report to Shareholders by Brian K. Briggs, P.E., President and Chief Executive Officer

Dear Shareholders: 

As most of us are aware, the gold mining industry is currently undergoing a period of turmoil, however I am pleased to report that your company remains focused on driving forward and creating value from our outstanding land position in the Northwest Territories (“NWT.”) We have developed an exceptional package of gold assets in one of Canada’s historic gold belts – and are just now beginning to reveal their true potential – Tyhee Gold is proud of the progress it has been able to achieve over the past year.

Our primary goal is to build the next gold mine in the NWT as soon as practically possible. This objective is strongly supported by the independent National Instrument 43-101-compliant Feasibility Study (“FS”) entitled “NI 43-101 Technical Report, Yellowknife Gold Project Feasibility Study, Northwest Territories, Canada,” dated October 1, 2012. This FS provided us with the economic and technical framework supporting an operation that would produce approximately 100,000 ounces (“oz.”) of gold per year during the first eight full years of production. The study used a base-case gold price of US$1,400/oz. and a projected 4,000 tonnes-per-day processing plant comprised of a conventional recovery circuit (gravity-flotation-CIL). Most of the reserves (approximately 75%) are contained in the Ormsby open pit with the remainder from Nicholas Lake, Ormsby Underground, Bruce Pit and a small amount of reserves from Clan Lake also.

According to the study’s authors – SRK Consulting, Knight Piésold and Lyntek Inc. out of their Denver, Colorado offices – our project is estimated to return a pre-tax net present value (“NPV”) at a 5% discount rate of approximately $216 million (post tax: $115 million) and an internal rate of return (“IRR”) of 20% (post tax: 15%)based on initial estimated capital cost of $193 million (including a 10% contingency and as noted a $1400/oz gold price.)

As we predicted last year, this FS provides a sharply more positive estimate than did the less detailed, 2010 Pre-Feasibility Study. This includes a doubling of the projected mine-life, strong growth in the Proven and Probable Reserves, a 33% increase in processing capacity and much greater potential economic returns (see table below.) 

Tyhee FS versus PFS.png

*Mineral Resources are inclusive of Mineral Reserves. Full details of these Mineral Resources are contained in the Feasibility Study, available on the Company’s website (www.tyhee.com) and with the Company’s filings on SEDAR. 

As we look forward to constructing the Ormsby mine and mill, the keys to Tyhee’s near term success lie with two critical path items: Financing and Permitting. Over the next twelve months, we’ll continue to focus on obtaining the short-term financing Tyhee requires to continue an aggressive permitting schedule as well as carry on other important tasks such as final engineering. We are currently facing unusually challenging capital markets, but we have been able to continue to operate over the past year due to the strong support of our loyal shareholder base as well as our Board and we expect to continue to do so in the days ahead.

The level of our success in obtaining short term financing will determine how quickly we proceed with permitting, which will be followed closely by plans to conclude the larger Project Financing. Regarding permitting, our technical team is currently developing responses to Information Requests (“IR’s”) on our Developer’s Assessment Report (“DAR”). Once the IR responses are submitted, the Mackenzie Valley Environmental Impact Review Board is expected to convene technical sessions to discuss Tyhee’s responses following which a second round of IR’s may be required. It is difficult, in our opinion, to forecast permitting timelines in this business and doing so leaves a company open to criticism from many different directions but suffice it to say that we hope to be through the Environmental Assessment process by next year. This will be followed by the regulatory phase in preparation for final permitting.

Meanwhile, we’ve begun work with a number of critical vendors in preparation for making the long-lead time decisions related to construction materials such as ball mills and crushers. We are working with Lyntek on these issues at a pace consistent with available funding. With continued financial support, we expect to be about halfway through Final Engineering over the next 12 months. By then, we should also be in the midst of an optimization study on Nicholas Lake specifically regarding more detailed mine planning and with the goal of increasing mill recoveries. We’re also continuing to work with affected First Nations and we look forward to formalizing ways to continue working together with them in the near future.

Taking a broader view, it’s important to remember that, in addition to our near term mining plans, one of Tyhee’s strategic advantages is its more than 35,000-acre project area, a package that covers the vast majority of the prospective ground north of Yellowknife. Although the primary development focus remains on the Ormsby-Nicholas gold deposits, we have reason to believe that these represent only the initial upside for Tyhee.

Future Growth and Potential:


Following the completion of the Feasibility Study, our technical team has recently been free to conduct a more detailed review of our 10,381 acre Clan Lake property, which lies approximately 30 kilometres south of the Ormsby deposit. Our analysis of the initial drilling results, along with a geophysical review as well as our initial sampling and mapping of the area, indicates that Clan Lake has the potential to add dramatically to the Company’s future.

To give you some scope of this property, to date we have drilled 185 holes for a total of 40,515 metres. This drilling has focused primarily on the Clan Lake Main Zone with a small portion of the holes to the south in the Spud Zone (See Figure 1 below).

In addition to drilling, geological mapping and surface prospecting have identified at least seven occurrences of similar gold mineralization over the entire seven kilometer extent of the underlying Clan Lake Volcanic Complex (see Figure 2 below.)

On behalf our entire team, I would also like to welcome Dick Evans to our Board. As we’ve noted, Dick has helped guide several of the world’s best known resource companies through challenging periods of development and growth and we are honored to have him agree to bring his experience to our team.

Finally, I want to thank our many loyal investors who share our vision and who have stood by us as we continue to drive towards our vision of building the next new gold mine in the Northwest Territories. 

Brian K. Briggs, P.E.
President & CEO

Figure 1: Clan Lake Main Zone Drill Hole Plan

Figure 1: Clan Lake Main Zone Drill Hole Plan

Clan Lake Main Zone Drill Hole Plan.jpg

Figure 2: Clan Lake Property Map: Geology and Mineralization

 

 

Clan Lake Gold showings.png

 


For further information please contact:

Greg Taylor
GT Investor Relations Inc.
O: 905 337-7673
C: 416 605-5120
gtaylor@tyhee.com

Brian Briggs
President – Tyhee Gold
T: 604 681-2877
info@tyhee.com


Details of Quality Assurance/Quality Control (QA/QC) Procedures are described in the Feasibility Study referred to above.
Brian Briggs, P. Eng., a Qualified Person under NI 43-101 who is also the Chief Executive Officer of the Company, has reviewed and approved the technical information contained in this report.

FORWARD LOOKING STATEMENTS: Certain of the statements and information in this press release constitute “forward-looking statements” or “forward-looking information” Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “believes”, “plans”, “estimates”, “intends”, “targets”, “goals”, “forecasts”, “objectives”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information.

Forward-looking statements or information relate to, among other things: resource estimate, grades on the Yellowknife Gold Project; scope of mineralization within the Yellowknife Gold Project; geological interpretations and potential mineral recovery processes.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuations in the spot and forward price of gold or certain other commodities; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada or other countries in which the Company may carry on business in the future; the uncertainties involved in interpreting geological data; business opportunities that may be presented to, or pursued by, the Company; operating or technical difficulties in connection with mining activities; the speculative nature of gold exploration and development, including the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks).

This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information. 

 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.

 

 

 

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