Page 49 VISIT US AT NORTHERN MINES EXPO - OUTDOOR BOOTH #50 T el 1.800.668.5458 sales@foc omponen ts .c om w w w .foc omponen ts .c om F or T otal L ub e S olutions , GO WITH THE FLO! v A ut og r easers f or Y our M obile E quipmen t v F luid Handling E quipmen t f or Y our G ar age v O ur M obile W orkshops C ome t o Y ou a short gravel road from paved High - way 66. Access to the rest of the project area is via bush roads and trails. Electric power is available on site at the Ar - mistice shaft through a substation in - stalled at this location. The area of fers abundant infrastructure and ancillary services, including an experienced la - bour force and custom millin g facili - ties, suitable to support under ground mining operations. In December 2010, Armistice signed a defnitive fve-year option agree - ment for the purchase of up to 100 per cent of the mineral rights on the Kerr - Addison property , which is adjacent to the McGarry Mine. Kerr -Addison was one of Canada’ s lar gest gold pro- ducers, producing more than 1 1 mil - lion ounces of gold during a 58-year operating life from 1938 to 1996. Armistice agreed to make fve an - nual payments of $500,000 in cash to a group of private investors who controlled ownership of the Kerr -Ad - dison property and to issue 2,000,000 common shares to the Group. Ar - mistice subsequently made the frst two annual cash payments. The third payment of $500,000 was payable in January 2013. Armistice continues to be required to pay a 2% royalty on gold production from the Kerr -Addison, except for an area identifed in an internal report prepared by AJ Perron Gold Corp. dated October 21, 1996 as containing proven and probable reserves which are subject instead to a 3% net smelter royalty . Cont’d from pg. 48 Armistice options Kerr -Addison Pr operty Page 48 Cont’d on pg. 49 By Gregory Reynolds A group of private investors has shown faith in the future of Armi - stice Resources Corp. as the company moves towards declaring commercial production later this year of its Mc - Garry Gold Mine near Kirkland Lake. The group was entitled to two pay - ments of $500,000 but instead ac - cepted 10 mill ion shares of the com - pany . The deal involved the third and fourth paymen ts of fve that will pay the investors for a historic property , the former producing Kerr -Addison Gold Mine. The amendment to the option agree - ment was announced Feb. 27 but the ffth and fnal $500,000 payment due on Jan.1, 2015 calls for cash. “W e are very pleased to have made this amendment that enables us to satisfy the third and fourth purchase payments with common shares,” said T odd J. Mor gan, CEO and president. “This enables Armistice to use our cash to continu e funding the develop - ment and operations of our McGarry Mine.” “As we reported in July 2012, the re - sults of the surface diamond-drilling program carrie d out on the Mill Zone of the Kerr -Addison property were very encouraging. The fndings from the 68 holes drilled confrmed our ex - pectations that there is great potential for mineral resource delineation on Stock rather than cash pr oves faith in new McGarry Mine the property . Our current focus is on bringing the McGarry Mine into com - mercial production in 2013. As we progress with that and start to generate meaningful cash fow , we intend to resume exploration drill - ing on the company’ s extensive land package, including the Kerr -Addison property ,” Mor gan said. On Sept. 4, 2012 Armistice announced that it has begun the shipment and sale of gold concentrate from the Mc - Garry . “The commencement of shipping and selling gold concentrate from our frst operating mine obviously is a signif - cant and exciti ng milestone in the de - velopment and growth of Armistice Resources,” said Mor gan, at the time. “The initial shipment of 35 tons of concentrate from the mill in Cobalt, Ontario to the smelter also marks Ar - mistice’ s frst generation of revenue and operating cash fow . “Following formal acceptance of the initial shipment by the smelter , we will be proceeding with regular ship - ments of concentrate for refning and sale. W e have an additional 135 tons of foatation concentrate and 24 tons of gravity concentrate ready to ship. W e are approaching production of 200 tons per day from the McGarry for shipment to the mill in Cobalt and are working to increase this to an average of 350-to-400 tons per day by 2013. A surface and under ground stockpile of 3,500 tons of broken ore is currently available for shipment to the mill,” Mor gan said in September . Including the McGarry Mine prop - erty , Armistice has established a sizeable footprint of contiguous gold properties in V ir giniatown on the pro - lifc Larder Lake-Cadillac Break that extends 200 km east-west straddling the Ontario and Quebec border and that has produced 95 million ounces of gold. In December 2012, Armistice com - pleted the purchase from Bear Lake Gold Ltd. of the mineral rights on 18 mining claims totaling 627 acres (the Barber -Larder Property) located on the western boundary of the McGarry Mine. The McGarry Mine consists of 33 contiguous patented mining claims, including three licenses of occupa - tion, totaling 484 hectares. The Mc - Garry Mine is fully permitted and all equipment and systems at the site have been brought up to standards. The McGarry Project is loca ted less than a kilome tre west of the com - munity of V ir giniatown and approxi - mately 40 kilom etres east of the T own of Kirkland Lake in Northern Ontario. The Armistice mining plant and shaft, located at the eastern end of Barber Lake is easily accessible by means of