Seabridge Gold Jan. 26 reported filing on SEDAR an NI 43-101 technical report for its KSM project in northern British Columbia that sets forth an increase in measured and indicated gold resources of 13 percent to 38.9 million ounces and copper resources of 17 percent to 10.0 billion pounds. The Company also reported that it has filed a preliminary short form base shelf prospectus with the securities commissions in each of the provinces of Ontario, Alberta and British Columbia, and a corresponding registration statement with the United States Securities and Exchange Commission. Seabridge President and CEO Rudi Fronk said the updated KSM resource marks another year of successfully increasing gold ownership per common share at Seabridge, which is the company’s main objective. “Over the past six years, our total measured and indicated gold resources have grown by 431 percent, while shares outstanding have increased by only 36 percent,” Fronk said. “We are now examining additional work programs for our two core assets, KSM and Courageous Lake, which have the potential to increase gold ownership per share in 2010. The shelf prospectus will provide the company with financial flexibility to fund such programs. Our shareholders can take comfort in the fact that any additional equity financing will only be undertaken if we are confident that it is likely to increase gold resources per common share and add shareholder value by moving our core assets towards feasibility.”
COPPER/GOLD – Lions Gate Metals Inc. Jan. 25 said it entered into a binding letter of intent with Firesteel Resources Inc. to acquire a 75 percent interest in the ROK-Coyote mineral property situated in the Stikine Arch region of northwestern B.C. Under the terms of the letter, Lions Gate will be granted an option to acquire a 75 percent interest in the property in consideration of an aggregate of 650,000 of its common shares, a total of C$496,000 in cash, including an initial payment of C$50,000 and a total work commitment of C$2.329 million over a period of four years. During this period, Lions Gate will be the operator on the property. The parties intend to enter a former mineral lease option agreement within 45 days. The deal is also subject to other restrictions and conditions, including Firesteel gaining a 2 percent net smelter royalty on the property, subject to Lions Gate’s right to purchase one-half of the royalty for C$1 million at any time within 240 days of the start of commercial production. The ROK-Coyote Property consists of two blocks earned or under option by Firesteel from previous claim holders, each with 2 percent royalty obligations; one block in an area of common interest with a 0.5 percent royalty obligation; and a fourth block with no previous royalty obligation. Lions Gate also has agreed to pay a break fee of C$10,000 if the LOI is terminated.
The company said the acquisition of the ROK - Coyote Project is an opportunity for Lions Gate to expand its project portfolio in British Columbia. The property is situated about 8 kilometers, or 5 miles, southeast of the Iskut Village on Highway 37 and 12 kilometers, or about 7.5 miles, west of the BC Rail extension road bed. The property comprises 19 contiguous claims covering 6,891 hectares, or 17,028 acres. Lions Gate said it believes the property is highly prospective for copper-gold alkalic porphyry targets and merits a significant exploration program to test its potential.
The property is also adjacent to and immediately northwest of Imperial Metals Corp.’s Red Chris copper–gold deposit, which has measured and indicated resources of 446.1 million tonnes at 0.36 percent copper and 0.29 grams per metric ton gold, at 0.20 percent copper cutoff, according to a March 2009 estimate.
GOLD – Eagle Plains Resources Ltd. and Prize Mining Ltd. Feb. 1 reported completion of an NI 43-101-compliant Technical Report on the Yellowjacket Project located 9 kilometers, or about 6 miles, east of Atlin, B.C. in northwestern British Columbia. The report included an inferred resource estimate of 184,000 metric tons grading 4.4 grams per metric ton gold with 781,167 total grams, or 25,000 ounces, at a cutoff grade of 0.5 grams per metric ton. Independent geological consultant Barry J. Price noted that the current resource is considerably smaller than previous estimates by Homestake and by Canamera Geological. In the former study, drill spacing was much wider, while recent drilling established that the geology is erratic, and it is difficult to trace the mineralization as far as originally thought and, for the latter, the estimate appears to be unreliable. Based on results of the exploration and development conducted to date on the property, the report concluded that the Yellowjacket Gold Zone represents a legitimate development target with the potential to host an economically feasible mineral deposit. The report also said that additional zones on the property are legitimate early-stage exploration targets and recommends a tentative budget of C$520,000 for the next stage of exploration. Currently, the Yellowjacket zone is open along strike in both directions and to depth.
FINANCE – Hawthorne Gold Corp. Feb. 4 said it arranged for a non-brokered private placement with China Mineral Holdings Ltd., a company incorporated in the British Virgin Islands, of up to about 20.25 million special warrants at a price of C29 cents per special warrant, for total gross proceeds of up to C$5.9 million. Pursuant to the terms of the offering, Hawthorne is required to allocate up to C$3.8 million of the subscription proceeds from the special warrants for strategic initiatives approved by its board of directors. Failing to enter into certain approved strategic initiatives will require the junior to issue to the China Holdings, without payment of additional consideration, common shares of the company equal to 10 percent of the number of special warrants held by the subscriber. China Holdings also gains the right to appoint two directors to Hawthorne’s board. The junior also said it expects to form a three-member executive committee immediately after completing the offering to advise Hawthorne’s board of directors with respect to the company’s strategic direction. The offering is expected to result in China Holdings gaining not more than 19.9 percent of Hawthorne’s current issued and outstanding share capital. Net proceeds from the offering will be used to fund strategic corporate initiatives and for general corporate working capital.
INCENTIVES – The Province of British Columbia intends to introduce legislation to provide greater certainty to its mining industry by extending the BC Mining Flow-Through Share Tax Credit for another three years to 2013, Premier Gordon Campbell said Jan. 21 at the Mineral Exploration Roundup in Vancouver.
In 2001, the province introduced the tax credit to provide a 20 percent tax credit for grassroots mineral exploration. Flow-through shares allow exploration companies to pass eligible Canadian exploration expenses to investors. When combined with a similar federal tax credit, the flow-through tax credit helps to reduce the cost of a $1,000 investment to about $380.
British Columbia also provides a refundable tax credit for individuals, companies and active members of partnerships that undertake mineral exploration in the province through the Mining Exploration Tax Credit. This credit is calculated as 20 percent of eligible mineral exploration expenses incurred in British Columbia, 30 percent in mountain pine beetle-affected areas, and provides a benefit to companies and individual prospectors that do not finance their exploration costs with flow-through shares.
The province also has eliminated the capital tax and the proposed introduction of the HST will increase the savings from the current sales tax exemption for mining machinery and equipment by eliminating all sales tax currently paid on mining inputs when fully implemented.
