by Greg Klein | October 19, 2016
A new acquisition would make Pistol Bay Mining TSXV:PST the biggest claimholder in Ontario’s Confederation Lake greenstone belt. The 5,136-hectare package comprises all the regional claims held by AurCrest Gold TSXV:AGO and includes a zinc-copper-silver resource as well as an historic, non-43-101 estimate. Along with Pistol Bay’s optioned Dixie and Dixie 3 properties, the letter of intent announced October 19 would increase the company’s holdings to 7,050 hectares on the volcanogenic massive sulphide-rich belt.
With three cutoff grades, the package’s Arrow zone has resources showing:
3% zinc-equivalent cutoff
- indicated: 2.07 million tonnes averaging 5.92% zinc, 0.75% copper, 21.1 g/t silver and 0.58 g/t gold
- inferred: 120,550 tonnes averaging 2.6% zinc, 0.56% copper, 18.6 g/t silver and 0.4 g/t gold
5% zinc-equivalent cutoff
- indicated: 1.76 million tonnes averaging 6.75% zinc, 0.79% copper, 22.3 g/t silver and 0.61 g/t gold
- inferred: 51,630 tonnes averaging 3.86% zinc, 0.79% copper, 23.9 g/t silver and 0.58 g/t gold
10% zinc-equivalent cutoff
- indicated: 633,000 tonnes averaging 14.3% zinc, 1.11% copper, 31.7 g/t silver and 0.85 g/t gold
Additionally, the Copperlode A or Fredart zone has an historic, non-43-101 estimate of 425,000 tonnes averaging 1.56% copper. Exploration in the 1970s produced samples up to 1.46% molybdenum.
The 100% option would cost $25,000 and one million shares on closing and $25,000 90 days later, as well as $50,000 and one million shares on each of the four anniversaries following closing. In addition to regulatory approvals, the transaction needs the consent of Glencore plc, whose rights to the Confederation Lake property include a 2% NSR.
The companies expect to close within a week.
“Pistol Bay proposes an ambitious exploration program that will not only pursue existing targets and known VMS deposits, but will use the latest airborne geophysical survey technologies to explore the whole area to a greater depth than was possible in the past,” said president Charles Desjardins.
Earlier this month the company announced MPH Consulting will review historic geophysical data on Pistol Bay’s Confederation Lake-region Dixie properties, where field work began in September. Historic drilling has found zinc, copper and silver, while the recently optioned Dixie 3 project comes with an historic, non-43-101 estimate of 82,500 tonnes averaging 1% copper and 10% zinc.
The company has a joint venture with a Rio Tinto NYSE:RIO subsidiary on the C-5 uranium property in Saskatchewan’s Athabasca Basin. Having already earned 75% of its option, Rio has stated its intention to acquire the full 100%.
Pistol Bay closed a $563,450 private placement last August.