Melkior Resources Inc told investors it has entered into an option agreement to acquire 100% of the Genex gold-copper project, which borders its Carscallen property near Timmins, Ontario, from International Explorers & Prospectors Inc (IEP).
The company noted that the Genex project is an advanced gold-copper volcanogenic massive sulfide (VMS) exploration target with significant near-term resource potential. The zones have been historically interpreted over approximately 300 metres (m) wide with a sub-vertical dip.
Historical drilling completed along strike and across inside 500m of a strongly altered volcanic sequence revealed satellite gold-copper mineralization that proves the expansion potential of the system, Melkior added.
READ: Melkior Resources lays out plans to follow up on multiple targets in 2022 at Val d'Or property
“This project borders our Carscallen project in the West Timmins Gold Camp and complements our partnership with Agnico at Carscallen very well,” Melkior CEO Jonathan Deluce said in a statement. “We look forward to Genex being our new Melkior-operated flagship project, where we will commence our maiden drill program this summer.”
The Genex project is located in the Kamiskotia volcanic belt extending northwest of Timmins and comprises 70 claims, six patents and one partial lease totaling 1,616 hectares with good access. Underground workings including a 84-metre deep shaft and lateral development on two levels, were completed between 1964 and 1966.
Highlights of the Genex project include:
- IG-20-21 historical hole intercepted 2.26 grams per tonne (g/t) gold equivalent over 33.85m - 1.14 g/t gold, 0.45% copper, 0.58% zinc
- G17-09 historical hole intercepted 2.15 g/t gold equivalent over 39m - 0.20 g/t gold, 1.17% copper, 0.14% zinc
- Historical resource of 1 million tonnes of copper using a cut-off grade of 1%. No gold or zinc values were calculated in this historical resource
- The Genex project was in production between 1966-1967, when it shipped 240 tonnes of concentrate at 21.45%-27.25% copper (no zinc or gold recovered)
- Potential for delineating a polymetallic open-pitable resource while targeting a massive sulphide source and gold enrichment trends
Under the agreement with IEP, Melkior said it has a right to earn 100% interest in the Genex project through two options, subject to a net smelter return royalty of up to 2.25% on certain of the claims.
To earn an undivided 50% interest under the first option, Melkior must make total cash expenditures of $250,000, issue 2.5 million common shares to IEP, incur work expenditures of $2.75 million and contribute $500,000 in assessment credits from its Carscallen project, within three years of the date the agreement takes effect.
To exercise the option to acquire the remaining 50% stake, Melkior said it must make a one-time issuance of 2.5 million shares to IEP within four years of the effective date. IEP will retain a net smelter return royalty of up to 2%. If it doesn’t exercise the second option, a joint venture will be formed with a 70% interest held by Melkior and 30% by IEP, the company added.
“Numerous major producer CEOs have highlighted the demand for gold-copper deposits, and with the excellent infrastructure in the Timmins Camp, it increases the prospects of the project,” Deluce concluded. “The company is well-positioned with just under $3 million in the treasury and only 24 million shares outstanding."
Melkior Resources is an exploration stage resource company with its flagship Carscallen project located 25 kilometres from Timmins, Ontario, being advanced by Kirkland Lake Gold through a $110 million option/joint venture agreement.
The firm is also focused on advancing its Val D’Or, White Lake and Maseres projects.
Contact the author at stephen.gunnion@proactiveinvestors.com