Southern Empire Expands the Oro Cruz Gold Project, California – The American Girl Property

Southern Empire Resources Corp. (Southern Empire; TSX-V: SMP; Frankfurt: 5RE) announces that it has added to its Oro Cruz Gold Project by acquiring 116 hectares (ha; 287acres) of mineral dispositions, including privately-owned patented mining claims covering the former gold producing American Girl Mine. 

Highlights of the American Girl Mine Property Transaction 

The acquired American Girl Mine Property:

  • comprises 100% ownership of 7 privately-owned, patented lode mining claims and 10 BLM administered claims
  • covers 116 ha including the formerly-producing American Girl gold mine operations that produced more than 500,000 oz gold from four underground and four open pit deposits
  • has significant exploration potential for underground high-grade, oxide gold mineralization
  • is subject to no royalty interests
  • covers mine waste dumps which may, at current gold prices, present an opportunity to develop a resource in a manner similar to the conversion of waste dumps to resources by Equinox Gold Corp. at their nearby Mesquite Gold Mine

Dave Tupper, Southern Empire’s VP of Exploration stated: “The acquisition of the historical American Girl mine property not only gives Southern Empire a strategic holding of privately-owned land, but significantly adds to the exploration potential of the Oro Cruz Gold Project. More than 500,000 ounces of gold have been produced from historical American Girl mining operations, with the last production occurring in 1996. We believe that there may be significant gold still along extensions both down dip and along strike from the American Boy, B-Zone and C-Zone underground deposits that were not were mined at historical gold prices.”

A full compilation of the available data is underway, which will lead to the development of the initial work program this fall.

History of the American Girl Mine Property Operations

Placer gold was mined in the vicinity of the American Girl Mine Property, in the Padre y Madre Valley of the Cargo Muchacho Mountains, by Spanish mission colonists as early as the 1780’s.

The American Girl Mine, discovered in 1892, was and mined intermittently until 1939.  During the 1930’s, an estimated 80,000 oz of gold were produced by underground room and pillar mining methods from the from an area that is now encompassed by the exhausted American Girl open pit mine. 

In the early 1980’s, Newmont Exploration Ltd. acquired the rights to claims in the American Girl Canyon area and began an exploration program that discovered multiple gold-enriched zones that were both open pit and underground mining targets. 

Eastmaque Gold Mines, Ltd. formed the American Girl Mining Corporation, purchased the American Girl property from Newmont in 1986 and began mine development. 

Mining activity began with the open pit, oxide heap leach operations of the Padre y Madre west deposit, about 1.7 km from the American Girl deposit. During 1987 and 1988 the first American Girl underground deposit was accessed via a decline with the use of a contractor, Morrison Knudsen Corporation.

In 1989, Eastmaque created a joint venture with Morrison Knudsen who became the operating partner in 1990 when commercial underground mining started. The underground development of the American Girl B-Zone mine began in February of 1990 and reached full production in July of 1991. 

Underground production was ultimately achieved from four distinct mineralized bodies: B-Zone, American Boy, American Girl Southwest Extension and C-Zone. The C-Zone mine was developed from the abandoned C-Zone open pit starting in 1993.

Morrison Knudsen’s gold mining endeavours were vended into a publicly traded company known as MK Gold Company in 1993. The American Boy deposit was exhausted in early 1995 and B-Zone, Southwest Extension and the C-Zone production ended in early 1996.

The development of the Oro Cruz mine began in early 1995 with production commencing during the second half of 1995 and ending in 1996 as gold prices declined. 

Terms of the Transaction 

Pursuant to a Purchase and Sale Agreement and subject to acceptance by the TSX Venture Exchange, Southern Empire will acquire a 100% interest in the American Girl mine property by paying a total of USD $330,000 to Mackenzie Corporation, a Nevada entity controlled by Dale Wallster, the CEO and a director of Southern Empire. As a result, the transaction is subject to Multilateral Instrument 61-101 – Protection of Minority Holders in Special Transactions. The transaction was reviewed and unanimously approved by Southern Empire’s Board of Directors. The acquisition will be exempt from the formal valuation and minority approval requirements of Multilateral Instrument 61-101 – Protection of Minority Holders in Special Transactions as the fair market value of the transaction and the consideration paid will not exceed 25% of Southern Empire’s market capitalization.  The consideration paid to Mackenzie Corporation was equal to its original acquisition costs of the property. 

Work Programs During the COVID-19 Pandemic

Although many BLM, state and county offices are currently closed, their staff have established measures to provide services remotely. Timing of Southern Empire’s exploration programs will be contingent on governmental regulations regarding the COVID-19 pandemic and also the availability of exploration-related personnel, drill contractors, equipment, lodging, et cetera. Southern Empire will adhere to COVID-19 directives regarding safe working practices putting worker, community and national safety first and will proceed with exploration and development work programs only if potential COVID-19 risks can be effectively managed.

About Southern Empire Resources Corp.

Southern Empire is focused on the acquisition, exploration and development of gold deposits in North America.

In the Cargo Muchacho mountains of Imperial County, southeast California, Southern Empire owns the American Girl Mine Property and holds options to acquire a 100% interest in the 2,160 hectares (5,338 acre) Oro Cruz Property located approximately 22.5 kilometres (km; 14 miles) southeast of the operating Mesquite gold mine of Equinox Gold Corp.

With a history that includes extensive drilling and large-scale open pit and underground mining by the American Girl Mining Joint Venture (53 per cent owned by MK Gold Co., a subsidiary of Morrison Knudsen Corporation, and 47 per cent owned by Hecla Mining Company), which was suspended during the gold market downturn in 1996, the Oro Cruz Gold Project hosts many exploration targets in addition to a high-grade oxide gold zone that, based on the historical mine operation records, is amenable to conventional heap leach extractive methods. 

Southern Empire is in the process of acquiring MAS Gold Corp. (TSX-V: MAS), a Canadian mineral exploration company having road-accessible projects located in the La Ronge Gold Belt of Saskatchewan approximately 60 km west of the SSR Mining Inc.’s producing Seabee and Santoy gold mines. Please refer to Southern Empire’s news releases dated July 13 and August 19, 2020 available on SEDAR. Southern Empire expects this acquisition to close in the fall of 2020.

MAS Gold’s Greywacke North gold deposit, one of several known stratabound, high-grade gold-bearing zones on the Greywacke Lake Property, has an estimated Indicated Mineral Resource of 255,500 tonnes (t) at a grade of 9.92 grams gold per tonne (g Au/t), plus an Inferred Mineral Resource of 59,130 t at 7.42 g Au/t, at a cut-off grade of 5 g Au/t (see MAS Gold’s NI 43-101 Technical Report of June 1, 2016 available on SEDAR). 

The North Lake gold deposit, located on the Preview-North property, 33 kilometres southwest of Greywacke North, has an Inferred Mineral Resource estimated at 417,000 ounces of gold contained in 14,110,000 t grading 0.92 g Au/t (see MAS Gold’s News Release dated March 25, 2020 and their NI 43-101 Technical Report dated April 10, 2020 available on SEDAR). 

Qualified Person (QP)

The scientific and technical information contained in this news release has been prepared, reviewed, verified and approved by David Tupper, P.Geo. (British Columbia), Southern Empire’s VP Exploration and a Qualified Person within the context of Canadian Securities Administrators’ National Instrument 43-101; Standards of Disclosure for Mineral Projects.

On behalf of the Board of Directors of Southern Empire,

Dale Wallster, CEO and Director

For further information on Southern Empire please visit both and SEDAR or contact: Lubica Keighery, (778) 889-5476, .

Cautionary Notice on Forward-Looking Information  

Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Each of Southern Empire and MAS Gold cautions that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond their respective control. Such factors include, among other things: risks and uncertainties relating to each of Southern Empire and MAS Gold’s limited operating history, ability to complete the proposed Transaction (including obtaining all necessary shareholder and regulatory approvals), the need to comply with environmental and governmental regulations, results of exploration programs on their projects and those risks and uncertainties identified in each of their annual and interim financial statements and management discussion and analysis.  Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, neither Southern Empire nor MAS Gold undertakes no obligation to publicly update or revise forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.


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