TORONTO (miningweekly.com) – Junior gold producer Anaconda Mining has struck two option accords with explorer Spruce Ridge Resources to acquire a 100% interest in the Viking property and the next-door Kramer property, in the company’s first step out from its Point Rousse stronghold, located on the nearby Ming's Bight Peninsula.
Anaconda noted on Wednesday that the Viking project contained the Thor-Trend gold deposit, which held a historic indicated resource of 63 000 oz of gold at a grade of 2.09 g/t and an inferred resource of 20 000 oz grading 1.79 g/t gold.
The intention is to process any ore mined from this property at the operating Pine Cove mill to leverage the company’s existing infrastructure, said president and CEO Dustin Angelo.
"Beyond the historical indicated and inferred mineral resources at Viking, we are encouraged by the overall gold bearing potential of the entire land package, including Kramer and the property staked by Anaconda. Ultimately, we foresee simultaneously operating two large gold mining projects at Point Rousse and Viking while processing their ore at the Pine Cove mill," stated Angelo.
Viking and Kramer were located near the communities of Pollards Point and Sop's Arm in White Bay, located in Newfoundland and Labrador, about 180 km by road (100 km by barge) from the company's Pine Cove mill.
After verifying and compiling all available historic information on the properties, Anaconda planned to undertake an early summer field programme to advance the project. The company would also undertake metallurgical testing on mineralised intervals from the Thor deposit drill core to further assess compatibility with the Pine Cove mill flow sheet.
Under terms of the Viking option agreement, Anaconda would have to make total payments of C$300 000 over five years, including a final payment of C$175 000 when production had started. Anaconda had also granted Spruce Ridge 350 000 common share warrants at a strike price of $0.10 a share, expiring three years from the date of closing. Spruce Ridge also got a 0.5% net smelter returns (NSR) royalty on the sale of gold from Viking.
To earn a 100% interest in Kramer, the company would make total payments to Spruce Ridge of C$132 500 over the five-year period, beginning with an initial payment of C$12 500 on closing, with increasing payments on the anniversary of the effective date of the agreement. The company also issued 250 000 common shares of Anaconda and Spruce Ridge, with 2% on the sale of gold from Kramer. The NSR royalty is capped at C$2.5-million, after which the NSR royalty would be reduced to 1%. Anaconda would need to spend a total of C$750 000 in qualified exploration expenditure on Kramer during the option period.
Two previous NSR royalty agreements held by Altius Resources and a prospector, Paul Crocker, in relation to Viking would be terminated upon Anaconda earning its 100% interest in Viking and/or Kramer. These agreements would be replaced by new NSR royalty agreements which stipulate that the company would pay Altius a 2.5% NSR royalty granted on Viking, a 1% NSR royalty granted on Kramer and a 1.5% NSR royalty granted on an area of interest within 3 km of the combined Viking and Kramer properties.
The combined Viking and Kramer properties comprised 4 025 ha of prospective mineral lands. On January 29, Anaconda also staked a further 2 200 ha of prospective mineral lands next to Viking and Kramer. In total, Anaconda now controlled about 6 225 ha of property in White Bay, Newfoundland, similar in size to the Point Rousse project, on the Ming's Bight Peninsula.