TORONTO (miningweekly.com) – TSX-listed Sulliden mining has entered into a two-year option agreement with First Quantum Minerals to earn a 100% interest in the past-producing Troilus mine, located in the Abitibi mining region of Quebec.
Under the agreement, Sulliden would be required to spend a minimum of $1-million on exploration work to evaluate the project’s economic viability.
The company noted that Sulliden had paid an initial C$100 000 to First Quantum upon signing.
To exercise the option and acquire the Troilus mine, Sulliden would need to also pay C$100 000 to First Quantum on the first anniversary of the agreement, as well as a final cash payment of C$100 000 on the date of exercising the option.
The agreement also provided for a variable net smelter royalty (NSR) of 1.5% or 2.5%, depending on the gold price being more or less than $1 250/oz during the option period.
Sulliden advised that it intended to enter into a subsequent option agreement with 251 Ontario, whereby 251 would be able to acquire 40% of the Troilus mine and all associated properties, with Sulliden retaining the remaining 60%.
Inmet Mining had previously operated the Troilus mine, from 1997 to 2010, producing more than two-million ounces of gold and 70 000 t of copper.
The Troilus property was located about 175 km by road from the town of Chibougamau, comprising 81 mineral claims and one surveyed mining lease that collectively covered about 4 700 ha. The acquisition would include all infrastructure such as roads, power lines, camp buildings, a permitted tailings pond, and associated water treatment facilities. The mill was sold and removed during the first phase of reclamation.
According to Sulliden, Inmet had commissioned the Troilus mill in 1996 and achieved commercial production in April 1997 at a rate of 10 000 t/d, with recoveries of 86% gold and 90% copper, as well as a concentrate grade of 18% copper, eventually reaching a production milestone of 18 000 t/d. First Quantum acquired the Troilus property through its acquisition of Inmet in 2013.