Metals Creek Resources Corp. (TSX VENTURE:MEK) ("Metals Creek") is pleased to announce that the company has entered into an option agreement, (the "Jackson's Arm Agreement") with Anaconda Mining Inc. (TSX VENTURE:ANX) ("Anaconda"), whereas Anaconda has the right to acquire a 100% undivided interest in Metals Creek's "Jackson's Arm Property".
Metals Creek has also entered into a second option agreement, (the "Tilt Cove Agreement") with Anaconda Mining Inc. whereas Anaconda has the right to acquire a 100% undivided interest in Metals Creek's "Tilt Cove Property" located 60 kilometres east of the Company's Point Rousse Project within the BaieVerte Mining District.
Details of both agreements are as follows:
The Jackson's Arm Agreement: To earn a 100% interest in the Jackson's Arm Property, Anaconda is required to make aggregate payments to Metals Creek of $200,000 in cash ($20,000 two (2) days after TSX approval), and 500,000 common shares of Anaconda (50,000 two (2) days after TSX approval) over a three-year period. The Jackson's Arm Agreement provides for a two percent (2%) net smelter returns royalty ("NSR") to MEK on the sale of gold bearing mineral products from the Jackson's Arm Property. The NSR is capped at $1,500,000, after which, the NSR will be reduced to one percent (1%). Anaconda is required to spend a total of $750,000 in qualified exploration expenditures on the Jackson's Arm Property during the option period.
The Tilt Cove Agreement: To earn a 100% interest in the Tilt Cove Property, Anaconda is required to make aggregate payments to Metals Creek of $200,000 in cash ($20,000 two (2) days after TSX approval), and 500,000 common shares of Anaconda (50,000 two (2) days after TSX approval) over a three-year period. The Tilt Cove Agreement provides for a one percent (1%) NSR to MEK on the sale of goldbearing mineral products from the Tilt Cove Property. Anaconda is also assuming an existing two percent (2%) NSR (the "Existing NSR") on one of the two licenses that comprises the Tilt Cove Property. One percent (1%) of the Existing NSR is purchasable for $1,250,000. Anaconda is required to spend a total of $750,000 in qualified exploration expenditures on the Tilt Cove Property during the option period.
Key exploration highlights:
- Both projects are located along regional splays of the Long Range Fault system - a fertile gold bearing structure.
- A similar fault system, the Red Indian Line (and associated structures), was the focus of a recent staking rush for gold and, like the Long Range Fault, it is host to significant gold deposits.
- Both projects are located proximal to Anaconda's existing infrastructure at the Pine Cove Mine, accessible by road and have significant upside for discovery and resource growth.
The Jackson Arm Property is now part of Anaconda's Great Northern Project and boasts several gold prospects and showings including the Stocker, Shrik, Boot N' Hammer, and 954 Prospects. Surface grab samples assaying up to 20.2 g/t gold and 1232.0 g/t silver at the Boot N' Hammer Prospect; up to 56.7 g/t gold and 2.75 oz Silver at the Stocker Prospect; up to 7.2 g/t gold at the Shrik prospect; and 13.6 g/t gold at the 954 Prospect.
Great Northern Project Overview
The Great Northern Project is located near the community of Jackson's Arm, NL and is centered along the Doucer's Valley Fault, a regional splay off the Long Range Fault. The Doucer's Valley Fault is a significant geological control on and host to several gold deposits including Anaconda's Thor deposit (83,000 ounces Indicated and 31,000 Inferred resources)* and the Rattling Brook deposit (435,000 Inferred)**.
Tilt Cove Property Overview
Tilt Cove is located within the Baie Verte Mining District, near the community of La Scie, NL, approximately 60 km by road from the Company's Pine Cove mill. Tilt Cove is characterized by the same geological environment as Point Rousse, specifically the Nugget Pond horizon, an iron formation that hosted the historical high-grade-gold Nugget Pond mine, which produced 166,000 ounces of gold with an average grade of approximately 11 g/t. The Tilt Cove property has several occurrences with high grade gold grab samples from historical and recent prospecting including 69.38 g/t gold from the Scarp zone, 13.47 g/t gold from the Shaft zone and 6.02 g/t gold from the Road showing.
The area is also host to several historical (1864-1967) open pit and underground copper mines. Gold is typically associated with copper mineralization and several of the historic copper deposits require follow-up testing for gold potential. A stockpile of gold bearing ore from historical mining, estimated at 30,000 tonnes is located on the Tilt Cove Property.
Near term exploration plans
Anaconda is planning a field program on the Great Northern Project that will begin this fall and include geological mapping of existing prospects and surrounding areas and the development of drill targets. Immediate work on Tilt Cove will begin with a thorough review and compilation of all historical data and field investigations to determine the highest priority drill targets and metallurgical test work on the stockpile.
*Resource taken from the NI43-101 report for the Viking project entitled "NI 43-101 Technical Report and Mineral Resource Estimate on the Thor Deposit, Viking Project, White Bay Area, Newfoundland and Labrador, Canada" with an effective date of August 29, 2016" and using a cut-off grade of 0.5 g/t.
**Resource taken from the NI43-101 report for the Jackson's Arm Project entitled "TECHNICAL REPORT ON MINERAL RESOURCE ESTIMATE FOR JACKSON'S ARM GOLD PROJECT WHITE BAY AREA NEWFOUNDLAND AND LABRADOR, Latitude 49o 53' 2.65"North, Longitude 56 o 50' 7.09" West", with an effective date of April 20th, 2009. Prepared For: Kermode Resources Ltd. by Mercator Geological Services Limited.
Wayne Reid (PGeo) is a director of the company and is responsible for the preparation of this News Release.