Nevada Sunrise Option To Purchase Water Rights In Clayton Valley, Nevada

VANCOUVER , Jan. 28, 2016 /CNW/ - Nevada Sunrise Gold Corporation ("Nevada Sunrise" or the "Company") (TSXV: NEV) is pleased to announce that it has signed a letter agreement for an option to purchase water rights in the Clayton Valley of Nevada . The pre-existing water rights allow for 1,770 acre/feet of water use for mining and milling per year (the "Permit").

"The acquisition of water rights by Nevada Sunrise is an important step toward the potential development of any lithium brine discoveries on our Clayton Valley exploration properties," said Warren Stanyer , President and CEO of Nevada Sunrise. "We believe that any consumption of water in the Clayton Valley requires valid water rights to meet State regulations, especially in Nevada , the most highly-regulated state for water use in the U.S." 

In December 2015 , Nevada Sunrise received a written appraisal from an independent appraiser certified in the State of Nevada , which valued the Permit at US$1.42 million . According to the appraisal report, the Clayton Valley basin is currently "over-appropriated", with Albemarle Corp.'s Silver Peak lithium mine being the largest consumer of water in the area. The report further states that any new application for water use in an over-appropriated basin would be carefully reviewed by the Nevada Division of Water Resources, and it is uncertain if any new applications would be granted. Nevada Sunrise believes that its acquisition of the existing Permit will be a key factor in future lithium exploration and development by the Company for brines in the Clayton Valley.

In consideration for an option to purchase the Permit, the Company has agreed to pay the vendors a combination of cash, common shares and common share purchase warrants, on the following schedule shown below:      

Schedule of Payments

Nevada Sunrise has paid to the vendor a non-refundable deposit of US$50,000 to obtain an exclusive 60-day due diligence period, during which the vendors will not entertain or negotiate offers for the Permit.  During the due diligence period, Nevada Sunrise will have the right to conduct such due diligence in respect of the Permit with the State of Nevada as it deems necessary or advisable. At any time during the 60-day period, Nevada Sunrise can give notice to the vendor that it wishes to proceed to the execution of a definitive agreement (the "Agreement"), and will be obligated to pay the remaining $75,000 of the initial payment upon the earlier of execution of the Agreement and the date that is 60 days after the date of the letter agreement. Should Nevada Sunrise decide not proceed to an Agreement, the letter agreement will terminate with no further obligations to the vendor.

In addition to the above, the parties agree that the Agreement will include the following terms:

If within 10 years after the execution of the Agreement, Nevada Sunrise sells the Permit to a third party, the vendor will receive 50% of the proceeds of such sale, less the amounts already paid to the vendor in cash and common shares, with the common shares valued by way of a 20-day volume-weighted average price (the “VWAP”), with the VWAP to begin following the day the 4-month hold has expired for each tranche of common shares released.  Upon a sale of the Permit in total to a third party, the Company’s obligations under the Agreement will terminate.
The payment of $75,000 cash and 200,000 common shares made upon execution of the Agreement will be refundable to Nevada Sunrise within the first year from the date of execution of the letter agreement should the Company’s ability to use the Permit to its fullest extent be restricted by any regulation or statute.
Nevada Sunrise will have the right to accelerate the timing of cash payments and common share payments to the vendor, at its discretion.  All common shares issued by Nevada Sunrise are subject to a 4-month hold period according to the policies of the TSX Venture Exchange, and would bear a restrictive legend under Rule 904 of Regulation S of the U.S. Securities Act of 1933.
The final Agreement is subject to the production of a definitive agreement in a form satisfactory to both parties, approval by the Board of Directors of Nevada Sunrise, and acceptance for filing of the transaction by the TSX Venture Exchange.
 
Nevada Sunrise currently has three lithium exploration projects in the Clayton Valley, which hosts known lithium brine deposits, including the Silver Peak lithium mine. A drilling permit for the Neptune Project was obtained in December 2015 by Nevada Sunrise from the U.S. Bureau of Land Management, and the Company plans exploration drilling for lithium brines in February 2016.
 
For further information on the Company’s lithium properties, see the Nevada Sunrise website under “Projects-Nevada Lithium” at: http://www.nevadasunrise.ca/projects/nevadalithium/
 
About Nevada Sunrise
Nevada Sunrise is a junior mineral exploration company with a strong technical team based in Vancouver, BC, Canada, that holds interests in nine exploration projects in the State of Nevada, USA. Nevada Sunrise began acquisitions of Nevada lithium properties in September 2015, which include options to earn 100% interests in the Neptune and Clayton Northeast projects, and a 100% interest in the Aquarius Project, all located in the Clayton Valley. The Company also holds options to earn 100% interests in the Jackson Wash and Atlantis projects, and has a 50% participating interest in the Gemini Project, each located in playas proximal to the Clayton Valley.
 
Our three key gold assets include a 21% interest in a joint venture with Pilot Gold Inc. (TSX: PLG) at Kinsley Mountain near Wendover, a 100% interest in the Golden Arrow project near Tonopah, and a 100% interest in the Roulette gold property in the southeastern Carlin trend near Ely, with each of the properties subject to certain production royalties.
 
FOR FURTHER INFORMATION CONTACT:
Warren Stanyer, President and Chief Executive Officer
Telephone: (604) 428-8028   
Facsimile:   (604) 484-7143
Email: warrenstanyer@nevadasunrise.ca
 
FORWARD LOOKING STATEMENTS
All statements in this release, other than statements of historical fact, are "forward-looking information" with respect to Nevada Sunrise Gold Corporation ("Nevada Sunrise") within the meaning of applicable Canadian securities laws, including statements that address the potential acquisition of water rights, future mineral production, reserve potential, exploration drilling, the future price of lithium, potential quantity and/or grade of minerals, potential size of a mineralized zone, potential expansion of mineralization, the timing and results of future resource estimates, or other study, proposed exploration and development of our exploration properties and the estimation of mineral resources. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Nevada Sunrise to differ materially from those anticipated in such forward-looking information.
 
Such factors include, among others, risks related to the the potential acquisition of water rights, the interpretation and actual results of historical exploration at Nevada Sunrise’s exploration properties,, reliance on technical information provided by third parties on any of our exploration properties, including access to historical information on exploration properties, current exploration and development activities; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration, as well as those factors discussed in the section entitled "Risk Factors" in the Company's Management Discussion and Analysis for the Year Ended September 30, 2015,  which is available under Company's SEDAR profile at www.sedar.com.
 
Although Nevada Sunrise has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Nevada Sunrise disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information.
 
Forward-looking statements are made as of the date hereof and accordingly are subject to change after such date. Except as otherwise indicated by Nevada Sunrise, these statements do not reflect the potential impact of any non-recurring or other special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our operating environment. Nevada Sunrise does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws.
 
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this release. The Securities of Nevada Sunrise Gold Corporation have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to the account or benefit of any U.S. person.
Copyright © 2016 Nevada Sunrise Gold Corporation, All rights reserved.