November 12, 2012 /FSC/ – Thunder Mountain Gold, Inc. (TSX-V: THM; OTCQB: THMG), (the Company) is pleased to announce that it finalized the previously announced Joint Venture (JV) Agreement with ISR Capital, a Boise, Idaho based private equity group. The JV, called Owyhee Gold Trust LLC, will immediately begin advancing the exploration and development of the Company`s South Mountain Mine. ISR Capital can earn up to 75% participating interest in the project with an investment of $18 million.
Terms of the Agreement include a buy-in cash payment of $1 million to Thunder Mountain Gold, and a work commitment of $2 million no later than the end of 2013 to earn a 25% interest in the Project. An additional $5 million dollars are required to be spent into the project in the following three years under a plan to move the project through feasibility and into production. Thunder Mountain Gold has the option to participate on a pro-rata basis to retain 49% of the Project after the additional investment of $8 million dollars has been spent by ISR Capital, or can opt for a 25% participating interest upon the expenditure of the remaining additional $10 million earn-in by ISR Capital.
The $1 million buy in payment was initially secured by a convertible promissory note (the “Convertible Note”), announced on May 3rd, 2012, as part of the financing agreement with ISR Capital This note was cancelled effective at the closing of the JV Agreement. The Convertible Note associated with the Project financing provided working capital to advance the Company’s projects, and achieve some of its near-term milestones while the JV Agreement was completed.
* The project will be managed by a joint management team assembled by both companies. Work is due to start on the project immediately, with plans to enlarge both the Laxey and Sonneman tunnels to obtain a large metallurgical sample and conduct underground core drilling. This work will yield the necessary information for an economic mine model that includes the nine, known, high-grade mineralized zones to aid in the development of a mining plan. It is estimated that the project will initially be a 400-ton-per-day underground operation that will produce multiple concentrates for sale to a smelter.
Qualified Person – Edward D. Fields is the Qualified Person as defined by National Instrument 43-101 responsible for the technical data reported in this news release.
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