Press Release: Headwater Gold Announces Acquisition of the Midas North Epithermal Gold-Silver Project, Nevada and Provides Update on Exploration Activities

Headwater Gold Announces Acquisition of the Midas North Epithermal Gold-Silver Project, Nevada and Provides Update on Exploration Activities

VANCOUVER, British Columbia, Oct. 04, 2021 (GLOBE NEWSWIRE) -- Headwater Gold Inc. (CSE: HWG) (OTCQB: HWAUF) (the "Company" or "Headwater") is pleased to announce the Company has acquired the Midas North gold-silver project (the "Project" or "Property") in northern Nevada through claim staking.

Summary Highlights:

-- Company has acquired a 100% interest in a large, undrilled epithermal alteration cell immediately north of and adjoining Hecla Mining Company's ("Hecla") (NYSE: HL) Midas mine; -- Widespread sinter, water table silica, and clay alteration infers a fully preserved epithermal system is present; -- Analogous geologic setting to Hecla's Midas mine and the recent Green Racer Sinter vein discovery, where gold grades of 111.8 grams per tonne ("g/t") and silver grades of 490 g/t Ag were intercepted over a drilled thickness of 1.4 metres (see Hecla news release dated February 18, 2021) (1); -- Widespread areas of highly anomalous mercury geochemistry, which is one of the key pathfinder elements for epithermal vein exploration; and -- The Project was acquired through the staking of 199 unpatented claims on open Bureau of Land Management ("BLM") land and is 100% owned and royalty-free.

Figure 1: Outcrop of opalized sediments and silica sinter at the Big Opal target area, Midas North Project, Nevada.

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Caleb Stroup, Headwater's President and CEO, commented: "It is very rare to have the opportunity to stake such a large, untested epithermal alteration cell in a prolific high-grade Nevada mining district. The Midas mine complex immediately to the south serves as clear geologic analog, with over two million ounces of gold and over 25 million ounces of silver historically produced from high-grade epithermal veins at Midas between 1998 and 2019(1(, 2) () by operators such as Franco-Nevada, Newmont and Hecla. The Midas North project has all the components we look for when targeting large, blind, high-grade epithermal veins. Hecla's impressive Green Racer Sinter discovery announced earlier this year demonstrates that, despite a long history of mining, this district remains highly prospective and under-explored."

Figure 2: Location of Midas North Project and other Headwater Gold Nevada projects.

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About the Midas District:

The Midas North project is located in the Midas District of northern Nevada, approximately 100 kilometres north of the town of Winnemucca and directly adjoins Hecla Mining's Midas mine complex. In 1994 an array of high-grade banded epithermal veins were discovered and historic production from the Midas mine was initiated by Franco-Nevada Corporation in 1998, with historic reserves of 2.46 million tonnes at a grade of 38.2 g/t Au(1),(2) . Mining continued until 2019 when Hecla elected to temporarily halt production as a result of decreasing head grade. Existing infrastructure at the Midas mine includes a 1,200 ton per day mill, several production water wells, high voltage power, and a fleet of underground mining equipment.

Mineralization in the Midas area is related to mid-Miocene bimodal volcanism associated with the Northern Nevada Rift and is analogous to high-grade low-sulfidation epithermal veins in Northern Nevada including Sleeper, Fire Creek, and Hollister. Gold and silver mineralization in the Midas district typically occurs in sub-vertical banded low-sulfidation epithermal vein arrays, the most significant being the Colorado Grande vein in the central Midas mine area.

In February 2021, Hecla announced the discovery of a new high-grade vein system in a previously undrilled area, approximately 3 km southeast of the main mine area. This new discovery is reported to occur beneath a mapped exposure of geyserite sinter which was correctly identified as a surface venting feature of an epithermal vein system. This discovery highlights the potential for future exploration in the greater Midas district, targeting blind veins beneath widespread high-level epithermal alteration.

Figure 3: Midas North land position, showing the principal high-level epithermal target areas in the Midas district. Hecla's recent Green Racer discovery occurs in an analogous structural and stratigraphic setting to Midas North, with similar high-level epithermal alteration features present at surface.

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About the Midas North Project:

Headwater's Midas North project area covers a large hydrothermal alteration cell, extending at least 4 kilometres in strike and 1 kilometre in width, which is interpreted by Headwater geologists as representing the high-level manifestations of an epithermal precious metal system. This system occurs approximately 10 kilometres along strike north of the Midas mine. The Headwater Project consists of 199 unpatented mining claims on BLM land and covers approximately 1,530 hectares.

Figure 4: Headwater's Midas North property map, showing the location of the principal target areas with rock and stream sediment sample mercury geochemistry.

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Two priority target areas have been identified by Headwater geologists in the field: the Nevada Grande target and Big Opal target areas (Figure 4), both of which exhibit widespread high-level chalcedonic to opaline silica flooding, clay alteration, and local sinter formation. The Nevada Grande target area consists of a ridge forming, linear zone of chalcedonic and opaline silicification over an approximately 1 km strike extent, interpreted to be the high-level manifestations of a potential epithermal feeder structure. The Big Opal target area consists of a widespread zone of sub-horizontal opaline and chalcedonic silica flooding, with localized occurrences of interpreted near-vent sinter facies, such as fossilized geyser vents (Figure 5). To date, 90 rock chip samples and 54 stream sediment samples have been collected by the Company from the Project area. This limited initial sampling as already highlighted several priority areas of anomalous precious metal values, with highly anomalous values of important epithermal pathfinder elements, such as mercury.

The Project area has seen very limited historic exploration. Although the Project was reportedly staked by Newmont Corporation in the past, Headwater is not aware of any historic exploration drilling on the property. Headwater geologists are currently planning an expanded multi-disciplinary surface exploration program which will be carried out in late 2021 and into 2022 with a goal of identifying additional high-priority drill targets. This program is expected to include detailed geologic mapping, rock chip sampling, systematic soil sampling, airborne magnetics, airborne radiometrics, and ground based resistivity profiles.

Figure 5: Interpreted fossilized geyser vent within the Big Opal sinter zone. Note the silica mound surrounding the vent throat as well as the desiccation cracks on the vent walls.

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Update on Other Exploration Activities:

Spring Peak Project

Assays from five holes are pending from the Spring Peak drill program, which was completed earlier this month (see news release dated September 15, 2021). The Company expects assay results some time during the second half of October.

Highland Project

The Company has received assay results from the Highland drill program which was completed in early August (see news release dated August 10, 2021). No significant high-grade vein intercepts were encountered in the initial seven-hole program. The Company believes the high-priority targets in the district have been adequately tested and the underlying property owner has been notified of Headwater's intention to terminate its option agreement. The decision to terminate the option is in-line with the Company's disciplined exploration strategy of pursuing high-impact discoveries by testing high-quality targets as quickly and cost-effectively as possible.

Mahogany and Katey Projects

Federal and state drill permits have been received for the Company's 100% owned Katey and Mahogany Projects in eastern Oregon. A Boart Longyear diamond drill rig is scheduled to mobilize to the Mahogany Project in mid-October, where the focus will be testing multiple vein targets along the Main Ridge Fault zone, which locally contains high-grade gold values in surface sampling, up to 170 g/t Au. Following the conclusion of drilling at Mahogany, the rig is scheduled to move to the Katey Project.

Sample Quality Control:

Drilling at Highland was conducted by Boart Longyear using a wheel-mounted reverse circulation drill rig. The drill chips were logged on site and at Company offices in Reno, Nevada. Drilling totalled 2,097 metres, and 1,376 original samples were collected. Samples were transported from site to American Assay Laboratories ("AAL"), located in Sparks, Nevada by American Assay personnel. Prior to dispatch, samples were placed in numbered bags with regular insertion of blind internationally certified reference materials, blanks, or a sample duplicate. American Assay Laboratories are an accredited analytical laboratory meeting ISO/IEC 17025:2017 and AC89 IAS requirements. Samples were prepared by standard AAL crushing and grinding methods. The pulps were then assayed for 21 elements via AAL method ICP-2AM21 using a 0.5 g sample after a two acid near total digest with an ICP-OES/MS finish. Gold was assayed by fire assay using AAL method FA-Pb30 using a 30g sample charge and ICP-OES finish. Laboratory standards and QA-QC are monitored by the Company.

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October 04, 2021 06:30 ET (10:30 GMT)