Fathom Nickel (CSE:FNI) Inc revealed that it has strategically acquired the Watts Lake mineral claims in Saskatchewan following an agreement with SKRR Exploration Inc in a cash and share deal.
The Calgary, Alberta-based exploration company, said Watts Lake consists of 24 mineral claims totalling 13,708 hectares that are entirely contiguous with Fathom's Gochager Lake nickel property.
Fathom which targets magmatic nickel sulphide discoveries to support the electric vehicle market, noted that the addition of Watts Lake brings the company’s total land package at the Gochager Lake nickel project to 18,569 hectares.
In a statement, Fathom founder CEO Ian Fraser said: "Fathom is delighted to welcome Watts Lake into the company's exploration portfolio. In doing so we have created a solid, contiguous land package that connects the historic Gochager Lake nickel deposit with the Mal Lake nickel occurrence.”
“Based on the results thus far at Gochager, we feel Mal Lake is an analogous nickel occurrence. The new land package encompasses a much greater area of the 2008 VTEM survey. The company's geophysical consultants have now recognized a "plethora" of Gochager Lake-like geophysical signatures within both the Gochager claim area and the newly acquired Watts Lake claims.”
Fraser noted that while Fathom's focus is nickel, Watts Lake also includes Borys Lake, a VMS-style lead-zinc deposit.
“VMS mineralization within this overall contiguous mineral package speaks to the potential of a significant metal endowment in the land package and the tremendous exploration potential of this combined land package," Fraser added.
The Mal Lake nickel occurrence, which is 10 kilometers southeast of Gochager Lake exhibits many features and similarities comparable to what Fathom is seeing at Gochager Lake. With Watts Lake, Fathom said it now “controls all the ground between these two high priority areas.”
Watts Lake was originally staked by legendary Saskatchewan explorer, Ross McElroy based on the historic Borys Lake zinc deposit and its prospectivity for additional lead-zinc-gold discoveries. McElroy is the chairman of SKRR.
Terms of the acquisition
According to the agreement, Fathom will acquire a 100% interest in Watts Lake by making an initial cash payment of CAD$75,000 and issuing 2,000,000 common shares of Fathom to SKRR upon Canadian Securities Exchange (CSE) approval.
The acquisition agreement provides for a 2% net smelter return (NSR) royalty in favour of Edge Geological Consulting Inc, a company controlled by Ross McElroy. The NSR is subject to a buy down to 1% for C$1 million. Fathom will also make an additional cash payment of $75,000 to SKRR within 60 days of the execution of the acquisition agreement.
Meanwhile, SKRR CEO Sherman Dahl said working with “strong groups like Fathom Nickel (CSE:FNI)” allows SKRR to unlock hidden value within its company.
“Multiple occurrences of near-surface mineralization, including the historic Borys Lake lead-zinc deposit, along an extensive >14km conductive trend, make Watts Lake a very exciting property,” said Dahl. “Located in one of the World's top mining jurisdictions, the shallow depth, favorable geology and proximity to major infrastructure, means there is the potential to fast-track exploration and development activity."
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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