District Metals Corp is to acquire the advanced exploration stage Gruvberget property from Explora Mineral AB in the prolific Bergslagen district of Sweden.
Gruvberget spans 5,286 hectares (Ha), has a north and south zone, and lies 35 kilometres to the northwest of the company's Tomtebo property.
It contains similar host rocks and mineralization styles as Boliden's Garpenberg mine (60km southeast), the historic Falun mine, and the firm's Tomtebo property.
READ: District Metals continues to intersect significant polymetallic mineralization at Tomtebo
"We now have four mineral licenses situated in proximity to the historic Falun Mine and Boliden's producing Garpenberg Mine with our flagship Tomtebo Property continuing to be the priority," said Garrett Ainsworth, CEO of District Metals.
"A core portion of the Gruvberget property has seen significant polymetallic mineralization drilled along a strike length of 1 km that is open in most directions, while the remaining 14 km strike length within the property is strewn with historic polymetallic mines and mineral occurrences that have not seen modern systematic exploration."
Significant high-grade polymetallic mineralization was uncovered at Gruvberget around 1900.
Mining at the South zone did not occur until 1987 where 40,000 tonnes at 90 grams per ton (g/t) silver, 5.1% zinc, 1.9% lead, and 0.3% copper was extracted via open pit mining, and transported to the Falun mine facility for processing.
The Gruvberget North zone has a strike length of 550m and vertical extent of 160m, which remains open.
On closing the proposed acquisition, District will make a cash payment of C$20,000 to Explora and issue it with 1 million shares.
To retain the project, District must incur C$500,000 of eligible expenditures on the Gruvberget property within two years of closing.
District will grant Explora a 2.5% net smelter return (NSR) royalty on the Gruvberget property, subject to an option to repurchase the entire 2.5% NSR royalty for C$8 million at any time.
Tomtebo, which is the main focus, sits in the Bergslagen Mining District of south-central Sweden and comprises 5,144 Ha situated 25km between the historic Falun mine and Boliden's Garpenberg mine.
Contact the author at giles@proactiveinvestors.com