WEEKLY ONLINE NEWS STORY
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| February 27, 2014 --- Vol. 08, No. 09 | February 2014
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British Columbia
MERGER/FINANCE – Canarc Resource Corp. Feb. 24 reported that it has signed a letter of intent to acquire all of the outstanding common shares of Pan American Goldfields Ltd., which owns an interest in the La Cieneguita mine properties in Mexico. Pan American, together with its partner operator, Minera Rio Tinto SA de CV is in pilot production at a gold-silver mine at La Cieneguita whereby Pan American receives 35 percent of net cash-flow from production. Subject to due diligence, Canarc and Pan American are of the view that the La Cieneguita mine can potentially be modernized and expanded in phases to become a core asset of the combined company. Pan American CEO Emilio Alvarez said, “After an extensive review of options following the AGM (annual general meeting) last year, Pan American believes that the business combination with Canarc will realize the full potential of the La Cieneguita mine project, particularly given the challenging times almost everyone in the junior resource sector is facing.” Canarc’s primary asset is New Polaris, a 1.1-million-ounce, high-grade gold project in northwestern British Columbia. Bruno Le Barber, director and member of Pan American’s strategy committee said, “We believe that Canarc’s ambitious strategy of acquiring production opportunities together with the development of the New Polaris Project in British Colombia will deliver substantial value to Pan American shareholders.” The structure of the proposed business combination remains subject to review and consultation by the parties; however, the letter of intent anticipates that the shareholders of Pan American would receive 0.82 of a common share of Canarc and 0.25 of a warrant of Canarc for each Pan American share held. Canarc has a 130-day period of exclusivity to complete its due diligence and negotiate a definitive agreement with respect to the transaction. Canarc has agreed to pay US$100,000 to Pan American. Pan American has agreed to repay the funds if either party terminates the transaction. Canarc plans to use commercially reasonable efforts to raise up to US$1.8 million in working capital financing pursuant to a private placement. In the event that the private placement is completed, the parties have agreed to negotiate an interim loan facility in which Canarc would lend Pan American up to US$250,000 prior to closing of the transaction. Following the completion of the transaction, Pan American will have the right to nominate two persons to the board of directors of the combined company. The remainder of the board will be nominees of Canarc. The business combination remains subject to the parties negotiating and entering into a definitive agreement by June 30, 2014. La Cieneguita is a 700-ton-per-day open pit gold-silver mine located roughly 20 kilometers (32 miles) from Goldcorp’s El Sauzal mine in Chihuahua, Mexico. Pan American reports that the mine has measured and indicated mineral resources of 509,800 ounces of gold, 37.6 million ounces of silver, 120.1 million pounds of lead and 191.7 pounds of zinc; and inferred mineral resources of 352,200 ounces of gold, 21 million ounces of silver, 67.2 million pounds of lead and 111.2 pounds of zinc. Canarc said it plans to complete a detailed assessment of the La Cieneguita reserves and resources, mine operations and plan, and economic performance in order to complete its own NI 43-101 reports and develop its own long term growth plan in order to provide future guidance on reserves and resources, gold and silver production, capital and operating costs, and exploration programs and budgets after closing. Canarc founder and Chairman Bradford Cooke said, “Today’s announcement marks an important step forward that will potentially transition Canarc into a growing gold-silver producer in the near term. The proposed transaction represents a great opportunity for both Canarc and Pan American shareholders to benefit from the combination of Pan American’s largely untapped asset at La Cieneguita and Canarc’s seasoned management team of mine finders, builders and operators.”
Additionally, Canarc said it is attempting to arrange a private placement to raise up to C$2.2 million, which would consist of up to 22 million units priced at C10 cents per unit. Each unit will be comprised of one common share and one half of a purchase warrant, each full warrant giving the holder the right to purchase one additional common share at C15 cents for three years.
POLYMETALLIC – Brixton Metals Corp. Feb. 24 has filed its technical assessment report titled, “2013 Geological, Geochemical and Diamond Drilling Report on the Thorn Property,” with the British Columbia Ministry of Energy and Mines. The report includes highlights from 2013, including acquisition of 100 percent of the Thorn project from Kiska Metals. Among key recommendations in the report for 2014 are: additional drilling at the Oban zone for possible mineralization expansion towards building a maiden NI 43-101 resource estimate; additional drilling on strike and at depth of the high-grade silver-copper-gold veins at the Glenfiddich and Talisker zones; drilling the multi-kilometer gold geochemical and magnetic anomalies at the Outlaw zone; drilling for Oban-like diatreme-breccia at the Macallan zone; a broadly spaced soil sampling program at Outlaw gold, Cirque copper-molybdenum, West La Jaune gold-copper-silver, and Amarillo gold-silver; deep-penetrating geophysical surveys over Glenfiddich-Talisker-Oban zones and Outlaw-Cirque zones; and additional compilation, inversion and 3D model integration of previous geophysical survey data. The 2014 exploration program is expected to begin in June, and subject to budget may include select portions of the above recommendations. For the full report click: http://brixtonmetals.com/cn/wp content/uploads/2013/08/Thorn2013_Assessment-final.pdf
COPPER/GOLD – Teuton Resources Corp. Feb. 24 said it commissioned a geological assessment of the Treaty Creek property by E. Kruchkowski, P. Geo. This report is now complete and will be presented to the British Columbia government as part of the company’s submission in regard to Seabridge Gold’s proposed construction of twin tunnels through the Treaty Creek property. The tunnels are estimated to be 22.8 kilometers (14 miles) long connecting Seabridge’s KSM property to its proposed mill site. Of this length, about 12.2 kilometers (7.6 miles) will pass through the Treaty Creek property. Kruchkowski’s report details historical work on the Treaty Creek property and also incorporates recent geoscientific investigations on the property and areas to the south by the BC Geological Survey. Kruchkowski has worked extensively in the Sulphurets-Mitchell valleys as well as Treaty Creek valley. He was involved in the geochemical program that identified the Sulphurets, Snowfield and Iron Cap zones during surveys in the early 1970s (on ground now owned by Seabridge Gold and Pretium Resources). He also located the first gold showings at Brucejack Lake and staked the claims that now host numerous gold deposits. He worked on the Iron Cap Gold zone in 1980 and supervised drilling on the Snowfield zone in 2007. Kruchkowski was responsible for the discovery of the Mitchell East zone (copper-gold) which appears to be the northern extension of the Snowfield zone. He also supervised several work programs on the Treaty Creek property itself, including two drill programs. Kruchkowski recommends that the magnetotelluric survey be completed along the entire MTT route on the Treaty Creek tenures. He also recommends that drill holes 250 metres apart along the 6.1 kilometres of volcanic rocks on the MTT trend be completed, with holes at least 750 - 1000 metres in depth. All drill core recovered should be assayed. The Treaty Creek property is currently the object of litigation between Teuton and its former optionee, American Creek Resources. American Creek is seeking among other things a declaration from the court that it has earned a 51 percent interest in the property; Teuton is seeking a declaration that American Creek has forfeited all right and interest in and to the Treaty Creek property. Should Teuton be successful in its arguments it will have a 100 percent interest in Treaty Creek; if unsuccessful, a 49 percent interest.
COPPER/GOLD – Alix Resources Corp. Feb. 21 reported the acquisition 1,889 hectares of claims (4,668 acres) adjacent to the northern border of Prosper Gold Corp.’s Sheslay copper-gold project in northwestern British Columbia. Alix now holds 6,785 hectares (16,766 acres) of claims in the Sheslay Valley region. “Alix is extremely pleased to have acquired these very strategic claims in the most exciting new exploration area of British Columbia where drilling discoveries have recently been announced on two separate properties,” said Alix Resources President Mike England. “We continue to compile historical data for the region and anticipate an active exploration program in the coming field season.” Terms of this acquisition include the issuance of 1 million Alix Resources shares, cash payments totaling C$40,000 and C$134,000 in exploration expenditures, over three years. A 2 percent net smelter royalty will also be granted with an option to purchase 1 percent back for C$1 million.
COPPER/GOLD – Prosper Gold Corp. Feb. 20 reported the receipt of a multi-year, area-based notice of work permit from the British Columbia government authorizing exploration at its Sheslay porphyry copper-gold project in northwestern British Columbia. This permit allows Prosper Gold to conduct surface drilling from 200 ground and helicopter supported locations over a five-year period. Prosper now has permission to expand the camp at the Star target to 35 people (12 structures) and establish a temporary fly camp at Pyrrhotite Creek for up to 8 people (6 structures). Also, the permit allows Prosper to conduct mechanical trenching at 50 sites, complete a 50 line-kilometer induced polarization survey, and construct five kilometers (3.1 miles) of new exploration trails.
Prosper also posted the appointment of Ted Muraro and K. Brock Riedell as senior advisors. Muraro is a geologist with more than 40 years of experience in the mineral exploration industry, including over 30 years at Cominco Ltd. leading to chief geologist, exploration. Riedell is a geologist with over 35 years of exploration experience with an emphasis on porphyry copper-gold deposits. He has worked with Newmont, Exxon Minerals and BHP Billiton where he served as chief geologist. Since 2009 he has served as a consultant on advanced copper-gold-molybdenum exploration and development projects.
FINANCE – Pretium Resources Inc. Feb. 20 reported its intention to complete a C$20 million private placement consisting of 568,182 ITC flow-through common shares at C$8.80 per share and 1.86 million CEE flow-through common shares at C$8.05 per share. BMO Capital Markets has been appointed as the lead agent and sole book-runner for the offering which includes a syndicate of agents. The offering is scheduled to close on or about March 6 and is conditional upon receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange. The agents have been granted an option to purchase up to 745,342 additional CEE flow-through shares of Pretium at any point up to 14 days following the closing of the offering for additional gross proceeds to Pretivm of up to about C$6 million. The proceeds will be used to advance exploration activities in the Brucejack Project’s Valley of the Kings project in northern British Columbia. The CEE flow-through shares and ITC flow-through shares will be offered to accredited investors in all Provinces of Canada pursuant to applicable securities laws. The flow-through shares offered will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such act.
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