VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/12/12 -- Rhino Exploration Inc. ("Rhino" or the "Company") (TSX VENTURE: RHI) is pleased to announce that it has entered into an option agreement with World Ventures Inc. of Vancouver, British Columbia and District Gold Inc. of Mississauga, Ontario, to acquire the Sleeper-Lapon Canyon Gold project, located in Mineral County, Nevada.
The Sleeper-Lapon Canyon Gold project, consists of 19 leased claims (the "Sleeper Claims") and 17 lode claims (the "Lapon Canyon Claims"), for a total of 36 claims (720 acres-292 hectares), situated some 60 km south of Yerington, Nevada and is easily accessible by secondary roads from the main highway (25 km). A power transmission lines passes within 3 km of the property. The Sleeper-Lapon Canyon Project is located within the Walker Lane Shear Zone, a 100 km wide structural corridor extending in a SE direction from Reno. The past producing historic Comstock Lode silver/gold mine is located within this trend, as is the past producing Esmeralda/Aurora gold mine with reported production of some 1.0 million ounces, which is located 30 km SW of the project.
Previous work began in 1907 with the discovery of vein type gold mineralization on the Sleeper Claims. Approximately 600 meters of underground drifts and adits were used to explore and access a series of vein type structures. From 1914-1924 a two stamp mill was erected and limited production was reported. Further limited underground exploration was carried out, returning numerous assay values in the range of 1 ounce per ton, with a sample at the end of an adit returning 20.6 ounces per ton gold (Gruenwald 1994, NI 43-101 report dated February 15, 2004 by J.H Montgomery, Ph.D., P.Eng. and N. Barr, B.Sc.). This result cannot be confirmed as the portal to the adit is now caved.
In 1990, Teck Resources Inc. discovered a surface area of argillitic alteration and low grader grade disseminated gold mineralization on the Sleeper Claims, which they were able to trace over a strike length of 450 meters. Grid sampling over this zone returned an average grade of 2.01 grams per ton gold, in this zone which was named the Central Zone.
The Sleeper-Lapon Canyon Gold project exhibits potential for high grade vein type gold mineralization as evidenced by the past underground activities on the property, and lower grade disseminated surfaced gold mineralization as shown by the Central Zone.
The project consists of 36 lode claims, of which the 19 Sleeper Claims are under lease. The lease terms are 4500/month as advanced royalty payments. The lease may be bought out at any time for $1.25 million with prior lease payments credited to the purchase price. The leaseholder will retain a 0.5% Net Smelter Return royalty.
The Company may exercise the option and purchase up to an undivided 75% working interest in the project (including lease) by:
1. Paying District an initial payment of $200,000 and issuing District 250,000 common shares in the capital of the Company (the "Initial Payment") on or before Feb. 28, 2013;2. Paying District further option payments of $200,000 cash, or at District's option, issuing District shares in lieu of such cash payments, on or before the first and second anniversaries of the Initial Payment; and3. Incurring $2 million of exploration work over a four year period.
After completion of the above requirements, Rhino will be vested with a 75% ownership, and the vendors a 25% working interest in the Sleeper-Lapon Canyon Gold project and the parties shall proceed in a joint venture. Rhino may purchase an additional 20% interest for $500,000, in which event the vendors interest will convert to a 5% carried interest.
A finder's fee will be payable, at the election of the finder, in cash, shares or a combination thereof, in accordance with TSX Venture Exchange rules and policies.
Jeffrey Cocks, the Company's Chief Executive Officer commented: "The Company is very pleased to have entered into this option agreement, which combined with our Watshishou River Project in eastern Quebec, gives an excellent portfolio of projects with significant potential."
The option agreement is subject to the acceptance of the TSX Venture Exchange.
Eugene Gauthier geol., eng. (OIQ) acts as the qualified person and has reviewed and is responsible for the contents of this release.
ON BEHALF OF THE BOARD OF DIRECTORS
Jeffrey Cocks, Chief Executive Officer and Director
Neither TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Rhino Exploration Inc.
Chief Executive Officer and Director
(604) 683-8605 (FAX)