SUMMARY:The Company has received assays from the Phase 1 diamond drilling program targeting a 125-meter length by 75-meter width at the western end of the known 3.0 kilometer gold-mineralized length of the Lone Star Zone along the Bonanza Fault.A total of 13 new holes were drilled at Lone Star on four sections totaling 748.24 meters.The drilling was designed to provide 25 by 25-meter hole spacing within a 125-meter by 75-meter area as shown in Figure 1. The Lone Star Zone is gold mineralized from surface over a 60-meter width across the 125-meter length tested in detail, with lateral and vertical grade continuity.This Phase 1 program extended gold mineralization 25-meters further southward, expanding the Lone Star Zone in this direction and opening a significant area with gold potential to test further to the east along the 3.0 km length.Core logging the Lone Star Zone Phase 1 drill holes documented the Bonanza Fault as a major 60+ meter wide "D3" thrust fault which was re-activated during a 4th deformation event "D4" and was accompanied by gold mineralization. (see NR dated December 10, 2019)Assays from Phase 2 and Phase 3 diamond drill holes targeting respectively the Stander Zone and potential Stander Zone extensions are still pending.

Peter Tallman, President and CEO of Klondike Gold stated "Positive results from the Lone Star Zone continue to solidify the Company's guiding geologic theory of gold mineralization in the Klondike. The grade and consistency of the drill results reported here at Lone Star and other areas allow the Company to move away from exploration and towards resource delineation".

PHASE 1 LONE STAR ZONE DRILLING RESULTS

Thirteen drill holes at the western end of the Lone Star Zone on four drill ‘Sections' tested a sub-area where gold mineralization outcrops over a 125 meter by 75-meter area shown in Figure 1. A total of 748.24 meters of core was drilled. All holes had 200-degree azimuth. The collar dip is -85 or -55 degrees angle from surface as noted in the following Drill Summary Table.

The width of the Lone Star Zone gold mineralization has been extended southward by 25-meters to the south, wider than previously mapped, opening a large area with gold potential to test further to the east along the known 3.0 km mineralized strike length.

Core logging of the Lone Star Zone Phase 1 drill holes documented the Bonanza Fault as a major 60+ meter wide "D3" thrust fault (the "Bonanza Fault") exhibiting significant progressive alteration (silicification, fuchsite alteration, chlorite-magnetite, and epidote) and deformation (laminar D3 shear fabric, and D4 intense z-folds, kink-foliation fabrics, and extensional quartz fracture veins). Gold mineralization within the Lone Star Zone occurs as disseminations within the laminar shear portions hosted along later kink-foliation planes, and as extensional gold-bearing quartz veinlets within more brittle portions of the deformation zone. The Company's mapping supports earlier interpretations that the Bonanza Fault cuts a regional recumbent anticline that folds Klondike district rocks and this is an important potential gold-fluid focus and trap for gold-bearing fluids and a high priority exploration target.Image: https://www.accesswire.com/users/newswire/images/599589/69949f3f-bd54-490b-914f-22db610b40f9.jpegFigure 1: Plan Map of location of Phase 1 Drilling at Lone Star Zone.

Section 1

On Section 1, both LS20-339 and LS20-340 intersected gold mineralization from surface; LS20-339 intersected 0.94 g/t au over 34.0 meters and LS20-340 intersected 5.82 g/t Au over 5.0 meters. Both intersections were unexpected and positive by extending gold mineralization to the south. LS20-337 and LS20-338 intersected typical broad widths of Lone Star Zone with gold mineralization disseminated and as thin sheeted veins which assayed 1.07 g/t Au over 61.1 meters and 0.8 g/t Au over 49.07 meters respectively, starting from surface.

SectionHole ID  DipFrom_mTo_m Au g/tInterval_m
1      LS20-336 -8553.00 58.002.78  5.00      
1      LS20-337 -855.00  66.001.07  61.10     
1      including   15.00 37.002.01  22.00     
1      LS20-338 -552.75  51.820.80  49.07     
1      including   18.00 51.001.00  33.00     
1      LS20-339 -855.00  39.000.94  34.00     
1      LS20-340 -556.00  11.005.82  5.00      
1      including   7.00  8.00 25.92 1.00      
                                              

Section 1.5

On Section 1.5, LS20-341 drilled to confirm the edge of mineralization also unexpectedly intersected gold further southward and assayed 0.53 g/t Au over 14.1 meters typical of Lone Star Zone mineralization. LS17-82 and LS16-58 (reported previously in 2016 and 2017 and included here for reference) each intersected typical Lone Star Zone mineralization north of LS20-341 and assayed 2.41 g/t Au over 41.2 meters and 2.37 g/t Au over 37.0 meters respectively.

SectionHole ID  DipFrom_mTo_m Au g/tInterval_m
1.5    LS17-82  -5010.42 51.632.41  41.20     
1.5    LS16-58  -556.50  43.502.37  37.00     
1.5    LS20-341 -8528.00 42.100.53  14.10     
       including   51.00 52.000.74  1.00      
                                              

Section 2

On Section 2, LS20-348 intersected Lone Star Zone gold mineralization from surface assaying 0.69 g/t Au over 42.2 meters. LS20-342, 25 meters in front of LS20-348, also intersected Lone Star Zone gold mineralization from surface assaying 0.71 g/t Au over 38.0 meters. LS20-343, drilled to test for the southern extent of Lone Star Zone, passed out of the Zone at the start of the hole somewhat as predicted.

SectionHole ID  DipFrom_mTo_m Au g/tInterval_m
2      LS20-348 -852.80  45.000.69  42.20     
2      LS20-342 -854.00  42.000.71  38.00     
2      including   32.00 33.0010.11 1.00      
2      LS20-343 -5521.00 22.003.12  1.00      
2      including   40.00 41.001.58  1.00      
                                              

Section 3

On Section 3, LS20-347 and LS20-340 intersected gold mineralization from surface; LS20-339 intersected 0.94 g/t Au over 34.0 meters and LS20-340 intersected 5.82 g/t Au over 5.0 meters. Both intersections were unexpected and positive by extending gold mineralization to the south. LS20-337 and LS20-338 intersected typical broad widths of Lone Star Zone with gold mineralization which assayed 1.07 g/t Au over 61.1 meters and 0.8 g/t Au over 49.07 meters respectively, starting from surface.

SectionHole ID  DipFrom_mTo_m Au g/tInterval_m
3      LS20-347 -8524.00 56.000.59  32.00     
3      including   37.00 48.001.23  11.00     
3      LS20-344 -853.05  45.000.59  41.95     
3      including   3.05  23.001.07  19.95     
3      LS20-345 -554.50  37.000.33  32.50     
3      including   4.50  8.00 1.61  3.50      
3      LS20-346 -553.05  16.700.50  13.65     
3      including   3.05  8.30 0.81  5.25      
                                              

Results from the Phase 1 program are anticipated to provide data to allow consideration of a resource volume leading to evaluation as a potential ‘starter open pit'.

Results from Phase 2 diamond drilling program targeting Stander Zone and Phase 3 program targeting Stander Zone extensions in conjunction with mapping, prospecting and trenching programs, are pending.Image: https://www.accesswire.com/users/newswire/images/599589/87c19825-17c0-4adc-b750-29a2af5939a1.jpegFigure 6: Location Map of Phase 1 Lone Star Zone 2020 Drilling

COVID-19 UPDATE

Regarding COVID-19, Yukon has remained virus-free since late April and has relaxed civil and travel restrictions, however the Company is continuing protocols and measures that mitigates the risks of COVID-19 infection and transmission to protect our local host community, our contractors and our employees.

ASSAY PROTOCOLS

All 2020 drill holes referenced in this release produced NTW (5.71cm dia.) drill core. Assay samples from drill core are cut using a diamond saw. Half the core sample interval is bagged, tagged, and sealed; the other half is returned to the core box with a corresponding tag and retained for reference. Two gold reference standards, two blank samples (a coarse and a fine), and a coarse sample duplicate per 100 samples, are routinely inserted as part of Klondike Gold's quality assurance / quality control ("QA/QC") program, independent of and additional to the laboratory QA/QC program.

Sample bags are aggregated into rice bags, sealed, and submitted by Klondike Gold personnel to Bureau Veritas Mineral Laboratories ("BV Labs") preparation facility in Whitehorse, YT with chemical analysis of sample pulps completed in Vancouver, British Columbia. Bureau Veritas Labs is an accredited ISO 9001:2008 full-service commercial laboratory.

At BV Labs each drill core sample is crushed to 70% passing 2 mm size. A 400 g subsample is pulverized to 85% passing 75 microns size (200 mesh)(Code PRP70-500). All samples of 400 g were sieved to 106 microns (140 mesh) for "metallic screen" assaying. The +140 mesh fraction is weighed and assayed for gold by fire assay ("FA") fusion with a gravimetric finish (Code FS631). A 30 g subsample of the -140 mesh fraction is assayed for gold by fire assay ("FA") fusion with an atomic absorption ("AA") finish (Code FA430). All over-limit results in excess of 10 ppm (10 g/t) for both silver and gold are re-assayed using a 30 g subsample and assayed by FA with a gravimetric finish (Code FA530-Au/Ag). Total gold grade is then calculated using a weighted average of the plus and minus fraction assay results.

QUALIFIED PERSONS REVIEW

The technical and scientific information contained within this news release has been reviewed and approved by Ian Perry, P.Geo., Vice-President Exploration of Klondike Gold Corp. and Qualified Person as defined by National Instrument 43-101 policy.

In December, 2019, the Ministry of Energy and Natural Resources (MERN) gave approval to extract 5,000 tonnes of mineralized material from the Moroy zone. This week, the MERN authorized an additional 5,000 tonnes, bringing the total to 10,000 tonnes to be extracted in the Moroy zone bulk sample program. Bonterra requested this increase following initial long-hole drilling results indicating the mineralized zone was thicker than initially expected.

The bulk sample program at the Moroy project is being undertaken in order to verify the grade continuity within the mineralized structure and reconcile the resource grade to the recovered ounces following processing.

The bulk sample is focused on the M1 shear zone on level 11 (440 metres below surface). The plan is to mine the zone from an existing exploration drift starting from the Bachelor shaft 900 metres to the north of the Moroy zone. The M1 structure is subvertical and the company plans to extract it through a sublevel long-hole stoping method at 15-metre intervals.

The company began the bulk sample program in January with long-hole drilling. Drilling was under way when Bonterra ceased all activities due to the advent of the COVID-19 global pandemic. Work officially resumed on July 15, 2020, with blasting set to begin in the next few days. The broken material will be transported on level 11 to the Bachelor shaft. Once at surface, the mineralized material will be processed on site at the Bachelor mill under the supervision of a third party engineering firm. The results of the completed bulk sample program are expected to be announced in the fourth quarter of 2020.

As announced on July 23, 2020, the Private Placement will consist of the sale of 33,333,333 subscription receipts (“Subscription Receipts”) at a price of $0.45 per Subscription Receipt, to an entity controlled by Mr. Eric Sprott (“Sprott”) and the concurrent sale of up to 11,111,111 units of the Company (“Units”) at a price of $0.45 per Unit. Each Unit will consist of one common share of the Company (“Common Share”) and one Common Share purchase warrant (“Warrant”), with each Warrant exercisable into one Common Share within two years of the closing date, at a price of $0.60 per Common Share. Each Subscription Receipt will convert into a Unit immediately and for no additional consideration upon certain release conditions being satisfied.

The directors and officers of the Company and its subsidiaries are expected to subscribe for up to 1,111,111 Units in the Private Placement resulting in up to an aggregate of 2,222,222 Common Shares being issued and issuable, representing 1.2% of the issued and outstanding Common Shares as of the date hereof. In addition, up to 555,555 Warrants may be issued to certain finders in connection with the offering of Units (“Finder Warrants”).

The terms of the Private Placement were negotiated at arm’s length and the price of the Units and the Subscription Receipts represents a discount of approximately 12.4% to the volume-weighted average trading price of the Common Shares on the TSX for the five trading days ended July 23, 2020.

As of the date of this press release, there are 192,937,702 Common Shares issued and outstanding on a non-diluted basis. Up to an aggregate of 89,444,443 Common Shares will be issued and issuable pursuant to the Private Placement (including Common Shares issuable upon the exercise of Warrants and Finder Warrants), representing 46.4% of the currently issued and outstanding Common Shares.

Sprott currently holds no Common Shares. After the closing of the Private Placement and the conversion of all Subscription Receipts into Units, Sprott will own 33,333,333 Common Shares, representing 14.0% of 237,382,146 Common Shares issued on a non-diluted basis. If the Warrants issued upon conversion of the Subscription Receipts were exercised in full, Sprott would own 66,666,666 Common Shares, representing 24.6% of 270,715,479 Common Shares issued on a non-diluted basis.

Sections 604(a) and 607(g)(i) of the TSX Company Manual provide that shareholder approval must be obtained for transactions involving the issuance or potential issuance of any securities that will materially affect control of the Company, and for private placements for an aggregate number of Common Shares issuable greater than 25% of the number of Common Shares outstanding, on a non-diluted basis, prior to the date of closing of the transaction if the price per security is less than the market price. Erdene is seeking the required shareholder approval by way of written consent of holders of more than 50% of the Common Shares in reliance on the exemption in Section 604(d) of the TSX Company Manual.

All the nominees listed in the management information circular for the meeting were elected as directors of the company. Detailed results of the vote for the election of directors are set out in the included table.

Nominee               Votes for   % for  Votes withheld  % withheld 

Kevin Bullock        28,934,879  85.66%       4,844,583      14.34%
Michael Byron        28,859,758  85.44%       4,919,704      14.56%
Jonathan Fitzgerald  28,859,183  85.43%       4,920,279      14.57%
Lewis Lawrick        28,860,179  85.44%       4,919,283      14.56%
Mary-Lynn Oke        33,742,932  99.89%          36,530       0.11%

In addition: (i) PricewaterhouseCoopers LLP was reappointed as the company’s auditor for the ensuing year and the directors were authorized to fix its remuneration; and (ii) the unallocated stock options under the stock option plan and share units under the share unit plan were approved by a majority of shareholders.

For detailed voting results on each resolution, please refer to the company’s report of voting results filed on SEDAR.

The Warrants were issued in connection with a private placement of units, with each share purchase warrant being exercisable into one additional common share of the Company at a price of $0.09 per share until March 29, 2022 and April 5, 2022, as applicable.

The Warrants are subject to the right of the Company to accelerate the expiry date of the Warrants if the Company’s common shares close at or above $0.15 per share for more than 10 consecutive trading days on the Toronto Stock Exchange (the “Acceleration Event”). The Company is entitled to accelerate the expiry of the Warrants to that date that is 30 business days from the date of issuance of a news release announcing the exercise of the acceleration right.

This press release constitutes notice to the holders of Warrants that the Acceleration Event has occurred and the Company has elected to accelerate the expiry date of the Warrants in accordance with the terms of the certificates representing the Warrants to the date that is thirty (30) days after the date hereof, being August 31, 2020. This notice only affects the Warrants dated March 29, 2019 and April 5, 2019 and not any other warrants the Company has issued.

In order to exercise your Warrants, you are required to complete and submit the Notice of Exercise attached to your respective Warrant certificate on or before 5:00 pm on August 31, 2020. For detailed exercise requirements, please refer to your Warrant Certificate.

Corporate Update

Black Iron’s management have recently initiated discussions with institutional investors on a royalty that could contribute materially to the funding required for project construction and are receiving strong interest. Negotiation of a Heads of Agreement on the commercial terms to be included in a binding contract for a high potential ~US$60 million investment in exchange for being awarded the construction contract for the Shymanivske project have concluded positively with one company and are well advanced with a second. Further details on this will be disclosed in due course noting that a binding contract would only be entered into with only one of these two companies, should the parties reach an agreement, who will then lead the future planned construction of the project.

Black Iron’s management congratulates Ukraine’s government and the Organisation for Economic Co-operation and Development (OECD) in reaching a ceasefire agreement between government forces and pro-Russian separatists in Eastern Ukraine that came into effect this past Monday, July 23. This is positive for Black Iron shareholders as it further broadens the base of investors who will be interested to invest in project construction and in the market. Although management of Black Iron felt the political risk to the Company due to the conflict between Russia and Ukraine was very low as the front line hadn’t moved in over 6 years, this ceasefire agreement should help alleviate any concern investors may have had.

The company welcomes Ignacio Melero, who will be joining Los Andes as director of corporate affairs and sustainability. He has vast experience in corporate and community affairs, having held several responsibilities at CMPC, one of Chile’s largest industrial and forestry corporations. During his tenure at CMPC, he was responsible for community affairs for the group, after having managed community and stakeholder matters for a number of its pulp and forestry divisions throughout the country. Prior to CMPC, Mr. Melero worked in the government of Chile, in the Ministry General Secretariat of the Presidency. In the ministry, he was responsible for the interministerial co-ordination of the ChileAtiende project, a multiservice network linking communities, regional governments and public services. This project was part of the state modernization program and was inspired by the Service Canada model.

The company would like to thank Mr. Letelier for his considerable contribution and years of hard work to position Vizcachitas for the next phases of its development.

Fernando Porcile, executive chairman, commented: “I am delighted to welcome Ignacio to the Los Andes team. Ignacio’s wealth of experience in managing the social and environmental practices of large corporations, as well as successfully co-ordinating relationships with local stakeholders, will be instrumental to the progress of the Vizachitas project.

“On behalf of the team, I would like to express my gratitude to Jose Tomas for his contributions to the company, and we look forward to continuing to receive his valuable advice. We all wish him well for the future.”

Any securities to be issued under the Offering will be subject to a hold period of four months and a day from the closing date of the Offering in accordance with the rules and policies of the Toronto Stock Exchange ("TSX"), and applicable Canadian securities laws and such other further restrictions as may apply under foreign securities laws. The Offering remains subject to the approval of the TSX.