Pistol Bay signs LOI to acquire two Aurcrest properties
2016-10-19 10:52 ET - News Release
See News Release (C-PST) Pistol Bay Mining Inc (2)
Mr. Charles Desjardins of Pistol Bay reports
PISTOL BAY AGREES TO ACQUIRE CONFEDERATION LAKE PROPERTY IN RED LAKE, ONTARIO FROM AURCREST GOLD
Pistol Bay Mining Inc. has entered into a letter of intent (LOI) with Aurcrest Gold Inc. to acquire all the mining claims held by Aurcrest in the Confederation Lake greenstone belt southeast of Red Lake, Ont.
The Aurcrest property comprises 108 mining claims with a total of 321 claim units with an area of 5,136 hectares (12,700 acres), being the Confederation Lake property and the Fredart Lake property. It covers a 31-kilometre length of the Confederation Lake greenstone belt. It includes two substantial mineral deposits and a number of mineralized drill intersections that are in need of follow-up drill testing. Mineralization on the property is all of volcanogenic massive sulphide (VMS) type, dominated by zinc, copper and silver, with occasional associated gold values. In combination with the 100-per-cent-optioned Dixie and Dixie 3 properties, the company now controls 7,050 hectares (17,400 acres) containing most of the significant mineral occurrences over 43 kilometres of the total 60-kilometre length of the belt.
Charles Desjardins, president of Pistol Bay, stated: "Together with the Dixie and Dixie 3 properties that Pistol Bay already holds under option, this acquisition positions the company as the dominant landholder in a very prolifically mineralized VMS-rich belt. Our holdings include the largest zinc-copper-silver deposit in the area, the second-largest VMS deposit remaining (Fredart Lake property) and a portfolio of exploration targets ready for follow-up drilling. Pistol Bay proposes an ambitious exploration program that will not only pursue existing targets and known VMS deposits, but will use the latest airborne geophysical survey technologies to explore the whole area to a greater depth than was possible in the past."
The Arrow zone has a National Instrument 43-101-compatible mineral resources as follows:
- 3-per-cent zinc-equivalent cut-off:
- Indicated resource of 2,071,000 tonnes at 5.92 per cent zinc, 0.75 per cent copper, 21.1 grams per tonne silver and 0.58 gram per tonne gold;
- Plus inferred resource of 120,550 tonnes at 2.6 per cent Zn, 0.56 per cent Cu, 18.6 grams per tonne Ag and 0.4 gram per tonne Au;
- 5-per-cent ZnEq cut-off:
- Indicated resource of 1,762,000 tonnes at 6.75 per cent Zn, 0.79 per cent Cu, 22.3 grams per tonne Ag and 0.61 gram per tonne Au;
- Plus inferred resource of 51,630 tonnes at 3.86 per cent Zn, 0.79 per cent Cu, 23.9 grams per tonne Ag and 0.58 gram per tonne Au;
- 10-per-cent ZnEq cut-off:
- Indicated resource of 633,000 tonnes at 14.3 per cent Zn, 1.11 per cent Cu, 31.7 grams per tonne Ag and 0.85 gram per tonne Au.
The other substantial deposit is the Copperlode A, or Fredart zone. It has a historical mineral resource of 425,000 tonnes grading 1.56 per cent copper. This historical resource estimate does not comply with the standards of National Instrument 43-101 and has not been reviewed by a qualified person. The zone was drill tested to a depth of approximately 200 metres over a length of 350 metres and was reported as being open at depth. The area was also explored for molybdenum in the 1970s, and samples containing up to 1.46 per cent molybdenum were reported. A diamond drilling program was carried out by Aurcrest in 2010 in an attempt to expand the resource base by drilling down a possible easterly plunge in the area of an IP (induced polarization) anomaly. A fence of five holes was drilled, without intersecting any significant mineralization. A borehole EM (electromagnetic) survey carried out on those drill holes in 2010 identified a strong off-hole conductor in two adjacent holes, with an interpreted conductive zone lying between the two holes. It is anticipated that this anomaly may represent the down-plunge extension of the Copperlode A zone or possibly a new zone.
The following is a partial list of diamond drill intercepts in the Joy-Caravelle area, which occupies a separate claim group west of the main Aurcrest holdings:
- Joy zone -- diamond drill hole (DDH) 3.35 metres at 0.17 per cent Zn and 4.01 per cent Cu;
- Diamond Willow -- DDH 4.2 metres at 1.8 per cent Zn and 2.3 per cent Cu;
- Caravelle zone -- DDH 1.1 metres at 4.4 per cent Zn and 0.2 per cent Cu;
- Joy South -- DDH 0.6 metre at 17.7 per cent Zn and 0.28 per cent Cu;
- Creek zone -- DDH 0.95 metre at 0.16 per cent Zn and 1.37 per cent Cu.
Pistol Bay is engaged in compiling data and reappraising the Aurcrest property with a view to planning an aggressive exploration program that will generate new drill targets, as well as follow up existing target areas and known deposits.
Under the terms of the LOI, Pistol Bay has the option to acquire a 100-per-cent interest in the Aurcrest properties by paying Aurcrest an aggregate of $250,000 and issuing an aggregate of five million common shares over four years with an initial payment of $25,000 and the issuance of one million common shares on closing, the payment of a further $25,000 within 90 days following closing, and the payment of $50,000 and the issuance of one million common shares on each of the four anniversaries following closing. The transaction is subject to the consent of Glencore PLC and is subject to the rights of Glencore in respect of the Confederation Lake property, including a 2-per-cent net smelter return royalty in favour of Glencore. The transaction is also subject to TSX Venture Exchange approval. The transaction is anticipated to close within the next week.
Technical material in this news release has been prepared and/or reviewed and approved by Dr. Colin Bowdidge, PhD, PGeo, a qualified person as defined in National Instrument 43-101.
About Pistol Bay Mining
Pistol Bay Mining is a diversified junior Canadian mineral exploration company with a focus on precious and base metal properties in North America.
About Aurcrest Gold
Aurcrest is a mineral exploration company focused on the acquisition, exploration and development of gold properties. Aurcrest has a portfolio of properties in Ontario, which include the Richardson Lake and Bridget Lake gold properties.
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