Melkior Resources Inc. (TSX-V:MKR) told investors that the TSX Venture Exchange has greenlighted its previously announced option deal to buy all of the Genex project in Ontario - an advanced, formerly producing gold-copper VMS exploration target with significant near-term resource potential.
This allows the explorer to make the initial cash payment of C$50,000 and issue 500,000 shares to optionor International Explorers & Prospectors Inc (IEP) to begin the earn-in for the first option stage.
Under the terms, Melkior has a right to earn 100% interest through two options, subject to a net smelter return royalty (NSR) of up to 2.25% on certain of the claims.
The Genex project sits around 20 kilometres west of Timmins and borders Melkior's Carscallen project on the northeast boundary. It comprises 70 claims, six patents and one partial lease totaling 1,616 hectares (ha) and has good access.
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Underground workings, including a 84 metre (m) deep shaft and lateral development on two levels, were completed between 1964 and 1966.
The asset was in production between 1966 and 1967 and shipped 240 tonnes of concentrate at between 21.45% and 27.25% copper, and no zinc or gold was recovered.
A series of three closely related holes drilled by IEP between 2017 and 2020 close to Genex's historical mineralized zones were assayed over long sulphide bearing core sections, which returned results ranging from 1.3 grams per ton (g/t) gold-equivalent (Au Eq) to 2.55 g/t Au Eq over a length of 26m to 52m starting from surface down vertical depth of 100m.
Under the first option, to earn an undivided 50% interest in the project, Melkior must make total cash payments of C$250,000, issue 2.5 million shares to IEP, incur work expenditures of C$2.75 million and contribute C$500,000 in assessment credits from Melkior's Carscallen project.
To exercise the second option to buy another 50% stake, Melkior must make a one-time issuance of 2.5 million Melkior shares to the optionor within four years of exercising the first.
If the second option is not exercised within the four years, then a joint venture will be formed, with 70% interest held by Melkior and 30% by IEP.
Contact the writer at giles@proactiveinvestors.com