Gowest Gold Enters into Toll Milling Agreement with Northern Sun

Rhea-AI Summary

Gowest Gold has entered a toll milling agreement with Northern Sun Mining to process ore from its Bradshaw mine at Northern Sun's Redstone mill in Timmins, Ontario. The agreement, effective June 7, 2024, covers one year and includes provisions for Gowest to pay operating and capital costs plus a fixed fee per tonne. Northern Sun can match any competitive third-party offers. Gowest can terminate the agreement if it fails to secure financing to restart mining at Bradshaw in 2024. This deal is part of Gowest's strategy to resume operations at Bradshaw. CEO Dan Gagnon expressed optimism about the partnership's potential.

Positive

• Gowest Gold secures a toll milling agreement with Northern Sun Mining, facilitating ore processing from Bradshaw mine at Redstone mill.
• The agreement includes a one-year term with flexibility for Northern Sun to match competitive offers, ensuring consistent processing arrangements.
• The partnership supports Gowest's plans to restart and develop Bradshaw Gold Mine, a strategic move for future operations.
• CEO Dan Gagnon's positive outlook on the agreement indicates confidence in the partnership's benefits for Gowest's growth.

Negative

• Gowest Gold must pay both operating and capital costs plus a fixed fee per tonne, which could strain financial resources.
• The company's ability to terminate the agreement if financing for Bradshaw mine is not secured highlights potential financial instability.
• Dependence on securing adequate financing to recommence mining activities at Bradshaw poses a significant risk.

Toronto, Ontario--(Newsfile Corp. - June 7, 2024) - Gowest Gold Ltd. (TSXV: GWA) ("Gowest" or the "Corporation") announced today that it has entered into a toll milling agreement (the "Toll Milling Agreement") with Northern Sun Mining Corp. ("Northern Sun"), pursuant to which Northern Sun will mill and process ore produced from Gowest's Bradshaw mine at its Redstone mill located in Timmins, Ontario. The Toll Milling Agreement has an initial term expiring one year from the date of the commencement of the milling services to be provided by Northern Sun thereunder.

Pursuant to the Toll Milling Agreement, Gowest will pay Northern Sun's operating and capital costs to process the Bradshaw ore plus a fixed processing fee per tonne. The milling arrangements under the Toll Milling Agreement are non-exclusive while providing that Northern Sun has been granted a right to match the terms offered by any third-party offering milling services to Gowest.

In addition to other termination rights, Gowest has the right to terminate the Toll Milling Agreement if it is unable to secure adequate financing to recommence mining activities at Bradshaw in 2024. Gowest is currently in the process of seeking financing sufficient to restart mining activities on terms and conditions acceptable to it.

Gowest's President and CEO, Dan Gagnon said, "This agreement with Northern Sun represents another important step in our plans for restarting and developing the Bradshaw Gold Mine. We look forward to seeing this newest partnership coming to fruition."

About Gowest

Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Bradshaw Gold Deposit (Bradshaw) on the Frankfield Property, part of the Corporation's North Timmins Gold Project (NTGP). Gowest is exploring additional gold targets on its +100‐square‐kilometre NTGP land package and continues to evaluate the area, which is part of the prolific Timmins, Ontario gold camp. Currently, Bradshaw contains a National Instrument 43‐101 Indicated Resource estimated at 2.1 million tonnes ("t") grading 6.19 grams per tonne gold (g/t Au) containing 422 thousand ounces (oz) Au and an Inferred Resource of 3.6 million t grading 6.47 g/t Au containing 755 thousand oz Au. Further, based on the Pre‐Feasibility Study produced by Stantec Mining and announced on June 9, 2015, Bradshaw contains Mineral Reserves (Mineral Resources are inclusive of Mineral Reserves) in the probable category, using a 3 g/t Au cut‐off and utilizing a gold price of US$1,200 / oz, totaling 1.8 million t grading 4.82 g/t Au for 277 thousand oz Au.

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements in this press release include, without limitation, statements relating to the proposed milling services to be provided under the Toll Milling Agreement, the commencement of milling services under the Toll Milling Agreement and the requirement of Gowest to obtain the financing required to recommence mining activities at the Bradshaw mine. Words such as "may", "would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "potential" and similar expressions may be used to identify these forward-looking statements although not all forward-looking statements contain such words.

Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including those risk factors set forth in the Corporation's management's discussion and analysis and other filings available via the System for Electronic Document Analysis and Retrieval+ (SEDAR+) under the Corporation's profile at www.sedarplus.ca. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. These forward-looking statements are made as of the date of this press release and, other than as required by law, the Corporation does not intend to or assume any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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.

For further information, please contact:

Dan Gagnon
President & CEO
Tel: (416) 363-1210
Email: info@gowestgold.com

Greg Taylor
Investor Relations
Tel: (416) 605-5120
Email: greg.taylor@gowestgold.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/212027

FAQ

What is the recent agreement Gowest Gold entered into?

Gowest Gold entered into a toll milling agreement with Northern Sun Mining to process ore from its Bradshaw mine.

When does the toll milling agreement between Gowest Gold and Northern Sun start?

The agreement is effective from June 7, 2024.

What does Gowest Gold need to pay under the toll milling agreement?

Gowest Gold needs to pay Northern Sun's operating and capital costs plus a fixed processing fee per tonne.

Can Northern Sun match competitive offers under the agreement with Gowest Gold?

Yes, Northern Sun has the right to match terms offered by any third party.

What right does Gowest Gold have if it cannot secure financing?

Gowest Gold can terminate the toll milling agreement if it is unable to secure adequate financing to restart mining activities at Bradshaw in 2024.

Who is the CEO of Gowest Gold?

The CEO of Gowest Gold is Dan Gagnon.