Company Details Strategy for Developing High-Grade Gold Property in Alaska -- With Target of 30,000 Ounces per Year
DENVER, CO--(Marketwire - March 1, 2011) - WestMountain Index Advisor, Inc. (OTCBB: WMTN), an emerging gold producer, today announced it has acquired privately held Terra Mining Corporation and its wholly-owned subsidiary Terra Gold Corporation and acquired an agreement with International Tower Hill Mining and Raven Gold Alaska to acquire controlling interest in the Terra Gold Project -- a high-grade gold system in Alaska that has the potential to produce more than 500,000 ounces of gold.
The Terra Gold Project, in which more than $6.0 million has been invested by major mining companies in property acquisition, exploration, drilling and infrastructure, is located in the McGrath Mining District in Western Alaska. The project consists of 240 Alaska state mining claims covering 60 square miles and has a high-grade gold vein system in the resource definition phase with inferred gold resource of 168,000 ounces based on the Company's 43-101 compliant resource report. The gold bearing structure has been mapped for three miles with only a 300-yard zone having been drilled to date, leaving the deposit open along strike and at depth.
The project's primary focus is the Bens Vein, where, to date, 28 drill holes have been completed, returning 111 vein intersections and indicating potential for a significant increase in resources. In addition, initial metallurgical work indicates a high recovery rate via gravity circuit, illustrating strong potential for near-term production. The Company is currently developing its 2011 drilling program to further define the gold vein along the open ends.
"Completion of these transactions is a critical milestone in our strategy of developing a world class gold operation," said Greg Schifrin, founder of Terra Mining Corporation and the new president and CEO of WestMountain. "The Terra Gold Project gives us a high-grade asset base with significant potential for additional exploration and discoveries, and we are optimistic about increasing our gold resource to more than one million ounces over time. Moreover, our status as a publicly held company enhances our ability to raise growth capital, accelerate near-term development plans, and build value for all of our stakeholders."
Under terms of its agreement with International Tower Hill Mining and Raven Gold Alaska, WestMountain becomes the operator of the Terra Gold Project and holds a 51% interest in gold production. Once WestMountain's project investment reaches $6.0 million, it will assume 51% ownership of the property. The Company can increase its ownership to 80% with a $9.5 million capital investment over a four-year period.
Additional highlights:
Near-term production potential with significant long-term upside. High-grade gold veins, coupled with favorable mining configuration and gravity recovery characteristics, position the Company for near-term gold production transitioning to an anticipated 30,000 ounce per year operation.
Participation of major mining firms. Kennecott Exploration initially discovered the outcropping gold veins in the late 1990s with ownership later transferring to AngloGold Ashanti Exploration (U.S.A.) and International Tower Hill, both of which conducted positive drilling activities and infrastructure development aggregating $6.0 million.
Infrastructure. There is a work camp located in close proximity to the project that is equipped with an airstrip, diesel generator, core facility, kitchen and tents to accommodate 20 people, a bulldozer and wireless Internet. The Company plans near-term infrastructure upgrades to support its drilling program.
Balance sheet and capital structure. The Company currently has $1.5 million in cash and cash equivalents and no long-term debt. There are 16,577,313 shares outstanding on a fully diluted basis, inclusive of 4.7 million warrants, with executive management holding approximately 39.5% of outstanding shares on a fully diluted basis.
Strong management team. The Company's three principal executives are significant shareholders with extensive experience in mining, finance and SEC reporting. They include Greg Schifrin, president and CEO, and James Baughman, chief operating officer, both of whom are geologists with more than 25 years of mining and mineral exploration experience; and Mark Scott, chief financial officer and secretary, who is a CPA with extensive experience in finance and capital markets with microcap companies.
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