Canadian junior mining company Slam Exploration has signed an arm’s length option deal to acquire a 100% stake in the Mine Road project in New Brunswick, Canada.
Occupying 7,500ha of land, the Mine Road project is located next to the former Heath Steele mine within the Bathurst Mining Camp (BMC) of northern New Brunswick.
Mine Road includes 347 units in two mineral claims next to the former producing Heath Steele mine property.
Between 1957 and 1996, Health Steele produced 21 million tonnes with an average grade of 4.98% zinc, 0.36% lead, 0.54% copper and 69.66g/t of silver.
A total of 2,330 million pounds (mlb) of zinc, 833mlb of lead, 446mlb of copper and 45 million ounces of silver had been processed at the mine.
At the Mine Road project, Slam Exploration claims to have intersected 14.51% zinc, 5.86% lead, 0.67% copper and 139.9g/t of silver over a 9m interval at one of the diamond drill holes.
The hole also intersected 6.57% zinc, 2.78% lead, 0.46% copper and 68.1g/t of silver over a core interval of 3m.
Another drill hole intersected 0.9% copper at 7m. This is claimed to be the deepest intercept in the project.
The project contains seven volcanogenic massive sulphide occurrences, including the above-mentioned locations. Slam Exploration expects to generate additional targets once the project database is integrated with its own.
Slam Exploration president Mike Taylor said: “This is a drill-ready project with a massive previous work database that is available to design drilling programmes to test for potential extensions and new discoveries. The BMC was a prolific producer of zinc, lead, copper and silver and is long overdue for such a discovery.”
The company can earn a 100% stake in the project by making cash payments and issuing shares.
Within five days of receiving approval from the Toronto Stock Exchange (TSX), it needs to issue 100,000 of its shares. On or before the first anniversary of the agreement, it needs to pay $10,000 and issue 100,000 shares once again.
It will be followed by an additional $10,000 payment and the issuance of another 100,000 shares on the second anniversary of the agreement.
The same process will continue in the third and fourth years, except in the fourth year, the company will have to pay $20,000 in cash and issue 100,000 shares.
Thus, the company would have paid a total of $50,000 in cash and have issued a total of 500,000 of its shares.
This project is also subject to a 2% net smelter royalty (NSR). The company will retain the right to buy back half of the NSR for $1m and further right to buy back the remaining royalty for $1m at any time.