Kenorland Minerals Ltd (TSX-V:KLD) provided an update on exploration activities at the South Uchi gold project, in the Red Lake district of Ontario, which it holds under an earn-in agreement with a wholly-owned subsidiary of Barrick Gold Corporation.
The Vancouver-based mineral exploration company said that during September and October of 2021, a property-wide glacial till geochemical survey was completed. The exploration team collected 1,874 samples on a 1000 meter (m) by 200m spaced grid covering the entire 76,511-hectare property.
The results of the survey outlined strong arsenic (As) and antimony (Sb) anomalism in glacial till extending over 20 kilometers (km) of strike along a major east-west structure. Within the regional As-Sb anomaly, multiple discrete gold (Au) anomalies were also identified and have been prioritized for follow-up exploration in 2022, according to the update.
READ: Kenorland Minerals grants option agreement for South Uchi project to Barrick Gold
For 2022, Kenorland said Barrick has “approved a C$1.8 million budget to complete infill glacial till geochemical sampling,” within a regional As-Sb+/-Au anomaly, on a 350m by 150m spaced grid. The follow-up survey is planned to be carried out between mid-June and mid-August, it added.
The South Uchi project covers a portion of Confederation Assemblage volcanic rocks, as well as the boundary between the volcanic-dominated Uchi sub-province to the north and the sedimentary-dominated English River sub-province to the south. The firm said deformation associated with the structures has resulted in zones that are favorable settings for orogenic gold mineralisation.
The gold deposits in the Red Lake District are located on the northern margin of the Confederation Assemblage. However, recent discoveries such as the LP Fault Zone on the Dixie Project by Great Bear Resources (TSX-V:GBR) highlight the prospectivity of the entire Confederation Assemblage along the southern margin of the Uchi sub-province.
Option agreement
Kenorland noted that following the option agreement, Barrick can earn an initial 70% interest in the project by incurring $6 million in mineral exploration expenditures on or before the sixth anniversary of the option agreement (of which $3 million are guaranteed expenditures within the first three years). And, deliver a technical report in respect of the project that establishes a mineral resource of at least one million ounces of gold.
As part of its exploration expenditures, Barrick will reimburse the company for its sunk costs and expenses incurred in exercising an underlying option that comprises part of the project.
Following earning a 70% interest, Barrick and Kenorland will form a joint venture (JV) for the project. However, Kenorland will have the option to forego a minority JV interest and immediately vest a net smelter returns royalty interest of 3% on currently unencumbered claims and 2% on claims currently encumbered by an existing royalty.
If a JV is formed, Barrick will have an option to earn an additional 10% interest in the project (for a total of 80%) by solely funding a feasibility study on or before the tenth anniversary of the option agreement.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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