Junior exploration company Silver Spruce Resources on Wednesday announced that it was interested in acquiring an advanced precious and base metal project in the Thunder Bay mining district of northern Ontario.

The 1 820 ha Melchett Lake zinc/gold/silver volcanogenic massive sulphide (VMS) project is located in a region where ther are other active exploration and mining project, including Copper Lake's Marshall Lake VMS project, Premier Gold's Hardrock-Greenstone gold mine and past-producing Anaconda-Dofasco iron-ore mine and the Skibi Lake and Stewart Lake iron prospects.

Silver Spruce noted that the Ontario Geological Survey reported in 2017 that there was a “high”  potential of discovery of economic zinc/lead/silver/gold-bearing VMS deposits in the Melchett Lake greenstone belt.

Silver Spruce has signed a letter of intent to acquire the property for C$150 000 in cash and C$250 000 in shares. It also committed to minimum work expenditures of C$1-million. The vendors will retain a 2% net smelter return royalty, of which 1% can be bought back by the company.

“The company is quickly advancing its due diligence to support a decision to earn a 100% interest in the project," stated CEO Karl Boltz.

"The multi-kilometre strike length of the known areas of mineralization, depth potential indicated by the Maxwell modelling, broad intervals of mineralization, intense alteration profile similar to well-known polymetallic deposits, and presence of high grade values of both precious metals and base metals clearly provide the Company with an opportunity to grow with the strong gold, silver and zinc markets.”

Silver Spruce director Greg Davison has first-hand experience on the Melchett Lake area, having worked the area as project manager and VP exploration for Kerr Addison Mines (1983-1984) and Tribute Minerals (1999-2002), respectively.

The junior traded 5% higher at C$0.05 a share on the TSX-V on Wednesday, giving it a market capitalisation of C$4.40-million.