MINING NEWS: Yukon players pool resources in new entity

Firestone Ventures spins out Canada assets in venture that will benefit from properties, database and alliance with Sherwood Copper

Rose Ragsdale

Mining News

In a move aimed at maximizing the value of its Canadian assets, Firestone Ventures Inc. March 3 said it will spin out the Sonora Gulch gold project in Yukon Territory into a new public company, Northern Tiger Resources Inc.

The aggressive junior also signed a memorandum of understanding with Sherwood Copper Corp. and its wholly owned subsidiary, Minto Explorations Ltd., to help guide the fledgling enterprise in exploring Yukon’s Dawson Range.

The moves will allow Vancouver, B.C.-based Firestone to focus its resources and efforts on advancing the Torlon Hill project and other interests in the emerging Cuchumatanes zinc-lead-silver district in Guatemala, while giving its shareholders an opportunity to realize additional returns from an effort focused primarily on Yukon exploration and other interests in Canada.

“We are confident that Firestone shareholders will benefit from the experience, knowledge and capabilities of the Northern Tiger-Sherwood Copper exploration alliance in advancing the Sonora Gulch project and identifying other quality projects in the Dawson Range mining district,” said Firestone President Lori Walton.

Under terms of the MOU, Sherwood, which has successfully developed copper resources at Minto Mine in central Yukon, will vend to Northern Tiger 100 percent interest in four Dawson Range exploration properties and an extensive historical exploration database for the region.

In addition, Northern Tiger and Sherwood will enter into a regional exploration alliance that will provide for input and cooperation on planning and executing exploration programs and long-term strategies for the area. They also will share proprietary technical expertise to assist in exploration and project advancement, and Northern Tiger will gain access to Sherwood’s infrastructure to facilitate area exploration, the companies said.

 Stephen Quin, president and CEO of Sherwood Copper, said the transaction give the company exposure to exploration targets outside the Minto Mine property, having both (1) a back in right to any deposits discovered close to its existing mine infrastructure that could be processed at the existing infrastructure and (2) equity exposure to any other discoveries made through this alliance.

Sherwood will retain back-in rights to acquire a 65 percent interest in any of Northern Tiger’s projects located within a 50-kilometer, or 31-mile, radius of Sherwood’s existing Minto Mine facilities that are found to have mineralization amenable to processing there.

The Vancouver, B.C.-based miner also will gain 25 percent of Northern Tiger’s common stock immediately prior to a private placement planned to provide operating and exploration funding for the new company.

“I believe this is a win-win transaction for our respective shareholders, (which) accelerates the exploration activity in the area of the Minto Mine and in the Yukon, beyond what Sherwood would do on its own,” Quin added.

The transaction is subject to a formal agreement as well as Northern Tiger completing a successful private placement and obtaining required TSX-V, court, shareholder and regulatory approvals.