Gainey Signs New Community Working Agreement; Accelerates Ore Processing and Exploration Plans

Community partnership increases access to large pool of skilled workers

Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is pleased to announce its 100% owned/controlled Mexican Sub Corp, Minera Buena Fortuna S.A. DE C.V., has signed a new “Working Agreement” with the San Francisco De Lajas Indian Community in the State of Durango, Mexico. Gainey owns and operates mining concessions of approximately 6,000 Hectares in Durango and has recently identified several new mineral targets in these concessions. The agreement includes increased access to a large number of skilled local workers, which will facilitate Gainey’s plans to begin bulk-sampling its own ore from its advanced 300 TPD mill and processing centre in 2015. The agreement will also support the company’s aggressive 2015 exploration plans, details of which Gainey expects to announce by the end of February.

David Coburn, CEO of Gainey Capital, commented, “Our 2015 plans are aggressive, both for ore processing at our mill and also exploration. Durango is a very pro-business and pro-mining State and we’re excited to begin exploration work in our Durango concessions this February, as per the agreement.”

Gainey Signs 10,000 Ton Ore Processing Agreement

Gainey now taking delivery of high-grade ore at its advanced mill and processing centre

Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is pleased to announce that Belmex Resources has engaged Gainey to process a minimum of 10,000 tons of high-grade gold ore at its 300 TPD (tons per day) mill and processing centre in Mexico’s prolific gold and silver region of Sierra Madre. Gainey has begun taking delivery of the ore (assay grades from 5.8 to 12.2 GPT), delivered by truck from Belmex’s facility just 22km from the mill.

Gainey’s facility is the only one in the region that includes a gravimetric/flotation processing center to optimize gold and silver recovery rates. Its operational team is run by Gainey Operations Manager, George Cantua, who previously supervised Barrick Gold’s 24,000-tpd mill in the Dominican Republic.

David Coburn, CEO of Gainey Capital, commented, “We located our facility close to a large number of ore bodies specifically because there was no other mill in the region. We began sampling ore from multiple sources just days after completing our upgrade program and today’s announcement shows we have started the next phase of the toll processing part of our business.”

Gainey Provides Update on Toll Processing Negotiations and Exploration Strategy

Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is pleased to provide an update on ore processing negotiations and exploration plans. In addition, the company has finalized an agreement with the Municipality of Huajicori, which will enable Gainey to use the Municipality’s heavy equipment, such as backhoes and front end loaders, at attractive rates.

Cash Position: As at September 30, 2014, the Company had a total of approximately CDN$2.8 million in cash reserves. This, along with the positive operating margin and cash flow from ore processing, will be used to fund the Company’s exploration strategy.

Ore Processing: Gainey has now completed the ore sampling process with multiple local mining companies and is in negotiations regarding long-term processing contracts. The Company has received cash deposits from processing customers and has ore stockpiled at the mill. The Company’s mill and processing centre, which benefits from competitive operating costs, has consistently delivered recovery rates in excess of 90%. The Company expects to generate a positive operating margin and cash flow from its processing operations, which will be used to further fund exploration initiatives. Gainey plans to begin sampling its own ore in early 2015.

Exploration: Gainey is finalizing its exploration strategy and plans to announce details, in January 2015, of the upcoming program. The Company’s advanced gold/silver project at El Colomo is located in the gold/silver-rich Sierra Madre Occidental Trend in western Mexico. The project has a number of high-priority drill targets already established and exploration will be headed up by renowned geologist, Peter Megaw.

David Coburn, CEO of Gainey, commented, “It has been a busy period for Gainey since the acquisition of our assets in Mexico closed in Oct 2013. Our ore sampling program has enabled us to build relationships with the many independent mining operations in the region and we can now move towards arranging long term tolling contracts. The mill’s high efficiency and low operating costs are a particular advantage for the toll processing part of our business model. We are well-funded and are looking forward to the upcoming exploration and toll processing opportunities as 2015 approaches.”

Gainey Capital Progress Update

The current market conditions are making things tough for a lot of juniors out there. At Gainey, however, we’re in the enviable position of being well-funded and, due to our business model, have attracted best-in-breed shareholders such as Mexican billionaire Ernesto Eschavaria.

So, although the markets are volatile, we are excited at the opportunities in front of us. In particular, there are potential accretive acquisitions, in the form of high-grade ore bodies, lying close to our property. We are in the process of evaluating these possible targets with the aim of making acquisitions and running the ore through our nearby 300 tpd processing mill.

As you know, it’s our intention to use every possible advantage when it comes to growing the company and shareholder value. Here are just a few points I want to draw to your attention:

  • Gainey has over 192 km2 of exploration potential in the prolific gold/silver Sierra Madre region of Mexico and is surrounded by major producers with multimillion Oz deposits.
  • We already have 21 high-grade target zones identified at our El Colomo property.
  • We plan on using cash flow from our 100%-owned, 300tpd mill/processing centre to fund our ongoing exploration programs.
  • We plan to double our mill capacity to 600tpd in the near future at very low capital cost and with no additional permitting required
  • We’ve attracted the top geologists in Mexico, Peter Megaw and Minera Cascabel, who will be leading the work to prove out and host a new resource.

Please, at your leisure, peruse our current presentation and if you have any questions, please don’t hesitate to get in touch. You can also connect with us on Twitter and LinkedIn for timely updates.

David Coburn, CEO of Gainey Capital

Cash-Generating Engine – Gainey’s Mill and Processing Demand

It’s hard to describe just how much (unprocessed) high grade ore exists in the gold and silver-rich region of Sierra region in Western Mexico. Prolific is a popular term, so is abundant, plentiful… let’s just agree there’s a lot. Less common in the region are fully optimized, operational mills like ours that have gravimetric/flotation circuits for processing ore at a highly cost-effective and efficient rate.

Like any business, mining is all about economics: how much it costs to make a discovery, how much to get the ore out of the ground, how much to process it and how much to transport it. Just one month after beginning full operations, we have already accepted $240,000 in toll processing deposits and have several months of ore stockpiled and awaiting processing. Such rapid progress for the toll processing part of our business is not a coincidence. We have located the mill close to a number of high-grade ore bodies and, following our engineering upgrade program, we have the capability of delivering very high recovery rates.

We also have our growth plan carefully mapped out. At present, the mill has a 300 tpd (tons per day) capacity. In the event that demand continues to grow, we have the ability to upgrade the mill to 600 tpd with minimal incremental capital and without any need for additional permitting.

An additional distinct advantage for Gainey lies in our operations team. As you probably know, the mill and processing center is being run by Gainey Operations Manager, George Cantua, who previously supervised Barrick Gold’s 24,000-tpd mill in the Dominican Republic. Optimizing the mill, ensuring ongoing cost-efficient running and managing increased capacity at such time as we grow to 600 tpd and beyond is something Mr. Cantua is more than equipped for.

Our business strategy is to simultaneously grow the toll processing part of the company, while exploring our exciting, highly prospective El Colomo property. We expect to use profits from the mill to fund much, if not all, of our exploration costs thus avoiding the need to debt or shareholder dilution by going to the market for additional financing. This business model has been used to great success by Dynacor Gold and with our mill already in good flow, and an industry-leading exploration team on board, our feeling is that Gainey is making excellent progress.

If you have any questions, please don’t hesitate to get in touch. You can also connect with us on Twitter and LinkedIn for timely updates.

David Coburn, CEO of Gainey Capital

Gainey Receives Multiple $USD Cash Deposits for Gold Ore Sampling at 300 TPD Mill

Demand proving strong for Gainey mill’s optimized gold and silver recovery rates

Gainey Capital Corp. (TSXV: GNC) (OTCQX: GNYPF) (“Gainey” or the “Company”) is pleased to announce receipt of $240,000 USD in deposits from independent, private mining companies at its 300-tpd (tons per day) mill in the prolific gold/silver Sierra Madre region of Western Mexico. The Gainey mill is the only one in the region to include a gravimetric/flotation processing center, which optimizes gold and silver recovery rates. The company now has several months of ore from regional mining companies stockpiled at the mill.

The mill’s operational team is run by Gainey Operations Manager, George Cantua, who previously supervised Barrick Gold’s 24,000-tpd mill in the Dominican Republic.

David Coburn, CEO of Gainey Capital, commented, “Demand for our ore processing services is proving to be very strong and negotiations are taking place with a number of additional mining companies. With the only gravimetric/flotation processing center in the area we have a distinct advantage in productivity and costs. In the event that demand continues to grow, we have the ability to upgrade the mill to 600 tpd with minimal incremental capital and without any need for additional permitting.”

“We are also in the process of developing the exploration program for our tremendously prospective 18,766 Hectare, El Colomo gold and silver project, which has a number of high-priority drill targets already established. Exploration will be headed up by renowned geologist, Peter Megaw and his company Minera Cascabel.” Added Coburn.

Gainey completes mill upgrades, begins ore sampling

Mr. David Coburn reports

Gainey Capital Corp. has completed the upgrade program at its 300-tonne-per-day mill, increasing efficiency and substantially reducing operational costs. The work was supervised by Mexico operations manager, George Cantua, who was part of the Barrick Gold management team that constructed and then operated the 20,000-tonne-per-day mill at Barrick Gold's Puebla Viejo mine joint venture in the Dominican Republic.

The company is sampling ore feedstocks from multiple mining companies in the area, and ore-tolling agreements are being negotiated. The mill, located in the prolific gold/silver Sierra Madre Occidental trend in western Mexico, is the only one in the region to include a gravimetric/flotation processing centre, which optimizes gold and silver recovery rates.

A video showing the milling operation at the El Colomo property can be viewed on the company's website.

David Coburn, chief executive officer of Gainey, commented: "The upgrade program was completed on time and under budget. We are very pleased with the technical upgrades and will now pursue our strategy of running a tolling operation until such time as we can put our own ore into production."

Mr. Cantua, Mexico operations manager for Gainey, explained: "The region around our mill has a large number of smaller operating mines unable to support stand-alone processing centres and the potential demand for ore processing is considerable. The milling and gravimetric/flotation processing centre upgrade gives us a distinct advantage in productivity and costs, which ultimately will enable us to maximize any excess capacity and increase our overall return on investment."

The upgrade included maintenance work and focused on the main power system/grid, as well as electrical and mechanical systems and pumps, motors and water systems. The infrastructure is now in place to support a second 300-tonne-per-day ball mill, ramping up throughput capacity to 600 tonnes per day at such point as the company is ready to expand further.

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