Alicanto Minerals Ltd (ASX:AQI) is selling its Arakaka Gold Project in Guyana to private Canadian company Virgin Gold Corp as it looks to expand drilling at its flagship Swedish projects.
Alicanto will receive up to C$4.75 (around A$5.08 million) from the sale, which will be used to focus financial and human resources on the 20,000-metre drilling campaign underway at the Greater Falun copper-gold-silver-zinc-lead and Sala silver-zinc-lead projects in Sweden.
The deal will need to be approved by Alicanto shareholders and is subject to several conditions, mostly relating to Virgin Gold.
Expanding Swedish focus
Managing director Peter George said the Arakaka project would be jettisoned in order to allow Alicanto to double down its focus on its two highly prospective Swedish projects.
“The Arakaka sale will enable us to focus our resources on unlocking the value of what is a potentially company-making opportunity at Greater Falun and Sala,” he said.
Alicanto began drilling at Sala, which has produced more than 200 million ounces of silver at very high grades, at the start of May, while it has been returning consistent results from Greater Falun since commencing drilling in September last year.
Most recently at Greater Falun, the company intersected semi-massive sulphide skarn mineralisation with visual chalcopyrite in the second hole drilled at Stone Lake target.
Assays returned 0.27 metres at 5.92% copper and 4.6 parts per million (ppm) silver from 124.2 metres, as part of an interval grading 1.92% copper and 1.3 ppm silver over 0.92 metres.
“The semi-massive character of the intersected copper-skarn system, some 80 metres beneath historic workings with similar mineralisation, in combination with the most intense, proximal and prograde skarn alteration so far encountered at Greater Falun, highlights the potential for significant mineralisation nearby,” George said.
Sala potential "outstanding"
Meanwhile, the MD said the potential at Sala was “outstanding”.
“It would have been explored many years ago had the geology been better understood and had it not been held in part by companies which were focused on other projects and jurisdictions,” he said.
“The presence of extensive high-grade copper-gold mineralisation with by-products of silver, zinc and lead at Falun has been well-established through both mining and exploration.
“However, the full potential in the Greater Falun area has yet to be unlocked.
“To now have Sala in our suite of projects is a significant addition to our portfolio within the Bergslagen area.”
Arakaka sale
Alicanto declared a maiden resource estimate of 500,000 ounces of gold at Arakaka in Guyana in November last year.
It will pocket C$50,000 in a cash deposit, C$700,000 when the deal has been completed and up to C$4 million in Goldblock Capital Inc (CNSX:GBLK) common shares subject to Virgin Gold achieving a compliant resource estimate on Arakaka within two years.
Virgin Gold is in the process of completing a reverse takeover of Canadian Stock Exchange-listed Goldblock Capital.
Alicanto is preparing a notice of meeting for shareholders to approve the Arakaka sale.
- Daniel Paproth