Q-Gold Resources Ltd. Announces Agreement to Option the Peruvian Surupana Silver Property

TORONTO, July 20, 2020 (GLOBE NEWSWIRE) -- Q-Gold Resources Ltd (TSXV: QGR) (“Q-Gold” or the “Company”) is pleased to announce that it has entered into an acquisition agreement dated July 16, 2020 to indirectly acquire an option agreement to earn a 100% interest (the “Acquisition”) in the Surupana Silver Property (the “Surupana Property”), covering the historical Surupana Silver Mining Camp, located in central Puno province of southern Peru.  The project’s main Surupana Bowl Zone, where sporadic small scale surface pitting & underground mining, carried out during the 1960s to late 1970s focused on high grade silver, copper and lead mineralization.

Surupana Silver Property

• 3,306 hectare property, covering the historic Surupana Silver Mining Camp, with no modern drill testing;
• Proximal to Bear Creek Mining’s Corani bulk tonnage Silver-Lead-Zinc development stage project (90 km northwest) and Minsur’s San Rafael high grade Tin Mine (50 km northwest); and
• Favourable logistics: Paved/dirt road access; National airport 100 km south at Juliaca (population: 270,000); 830 km SE of Lima. Open altiplano pampa grass & locally rugged terrain.

Q-Gold will provide the market with a more comprehensive property overview and proposed workplan in the coming weeks.

Summary of the Acquisition

Over a period of five years, Q-Gold will have the exclusive right to acquire a 100% interest in the Surupana Property for a proposed aggregate purchase price consisting of:

• $175,000 payable by Q-Gold in cash over a period of four years ($25,000 upon closing of the Acquisition (“Closing”); $25,000 on or before 12 months from Closing; $25,000 on or before 24 months from Closing; $25,000 on or before 36 months from Closing; and $75,000 48 months from Closing);
• an aggregate of 14,000,000 common shares of Q-Gold (the “Payment Shares”) (13,000,000 Payment Shares upon Closing; 250,000 Payment Shares on or before 12 months from Closing; 250,000 Payment Shares on or before 24 months from Closing; 250,000 Payment Shares on or before 36 months from Closing; and 250,000 Payment Shares 48 months from Closing);
• Q-Gold will be required to incur aggregate exploration expenditures totalling $1,800,000 over a period of five years on the Surupana Property ($135,000 on or before 12 months from Closing; an additional $165,000 on or before 24 months from Closing; an additional $200,000 on or before 36 months from Closing; $500,000 on or before 48 months from Closing; and an additional $800,000 on or before 60 months from Closing); and
• the optionor has been granted a 2.0% net smelter returns royalty upon commencement of commercial production (of which 1.0% can be purchased by Q-Gold for US$850,000).

In addition, in connection with the Acquisition, the Company will issue 800,000 common shares in the capital of Q-Gold to an arm’s length finder (the “Finders’ Shares”).  11,000,000 of the Payment Shares to be issued upon Closing will not be subject to any hold periods under applicable securities laws. The remainder of the Payment Shares and the Finders’ Shares will be subject to a four month and one day hold period under applicable securities laws. All of the Payment Shares and Finders’ Shares will be issued at a deemed price of $0.22.