The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Niblack, Committee Bay say combination would benefit both companies; union would put Southeast Alaska VMS project on fast-track
Two Vancouver B.C.-based explorers, Committee Bay Resources Ltd. and Niblack Mining Corp., have agreed to join forces. The companies have penned an initial agreement in which Committee Bay would acquire all of Niblack's securities in a one-to-one swap.
Committee Bay is also investigating the possibility of advancing C$10 million to fund exploration and development of Niblack's gold-silver-copper-zinc volcanic massive sulfide property in Southeast Alaska. Though the proposal will need shareholder and regulatory approval, the two companies shared a booth at the World Resource Investment Conference in Vancouver B.C., indicating that both parties are confident that the union will be a success.
Committee Bay Resources
Committee Bay Resources was formed in 2002 and holds about 60 percent of the 300-kilometer-, or 185-mile-long Committee Bay Greenstone Belt in northern Nunavut. Drilling completed by the junior on the more than 640,000 acres along the belt has produced a gold resource estimate of nearly 700,000 ounces, and has encountered more than 40 high-grade gold occurrences on company-held properties.
The company has divided the Nunavut properties into five sections. The current resource estimate is for an area of the property known as Three Bluffs, located about midway down the greenstone belt. At yearend 2007, the junior had spent C$11.67 million on exploration at Three Bluffs. Plans call for drilling 5,000 meters in 2008.
Committee Bay Resources Chairman John Robins told Mining News that Committee Bay has an enormous tract of real estate to explore.
"Three Bluffs is where we have had the best success and where we have made our most significant discovery and where we have an existing gold deposit we are developing. We decided this year to focus within a radius of the Three Bluffs deposit to look for additional satellite deposits and to potentially expand the Three Bluffs deposit itself," said Robins, who is certified as a professional geologist.
The company said on June 20 that the 2008 exploration program was underway. The program will focus on a 10 kilometer, or six mile, radius of the Three Bluffs deposit and will consist of exploration drilling to evaluate high priority targets at the Three Bluffs, Antler, Hayes and Bluff Seven prospects. Additional drilling is planned to evaluate potential parallel gold-bearing structures identified by previous surface sampling, drill intercepts and geophysics in the immediate Three Bluffs area.
Committee Bay has completed another C$21.48 million of exploration activities on four other property subdivisions along the greenstone belt and nearly 30 high-grade gold prospects have been located in these areas. The junior says these properties are potential joint venture opportunities.
In April, Committee Bay sold its 50 percent stake in the Coolgardie Gold Project of Western Australia for AU$30 million. After acquiring a 50 percent interest in the project in 2005, the company advanced the project from the exploration stage to production.
In addition to the Nunavut property, Committee Bay Resources currently owns a drill-ready gold project in Western Australia and an early-phase gold discovery in Argentina.
Niblack Mining
Niblack Mining was created out of Abacus Minerals in 2005 with a mission of advancing the 2,000-acre gold-rich Niblack property on Prince of Wales Island toward delineation of an economic ore deposit.
The junior currently anticipates a resource estimate that combines surface drilling it has completed through the end of 2007 in combination with results from about 160 historic holes drilled at Niblack since 1974.
Crews have tunneled more than 2,500 feet into Lookout Mountain since underground exploration began in September 2007. The junior explorer said that crews are nearing the point where the tunnel will intersect the Lookout zone at the deepest reaches intersected with surface drilling. Tunneling is continuing beyond Lookout and when completed, the main shaft will extend 3,000 feet from the portal and serve as a platform for a 30,000-foot underground drill program, according to Niblack Mining.
The first drill station for testing the Lookout zone has been completed and drilling has started. From this station, crews will drill upward into areas intersected with the surface program, forward into the Lookout stratigraphy, and downward expanding Lookout at depth.
"It is a program that is designed to test all facets of the mineralized zone at Lookout," Niblack President Paddy Nicol told Mining News.
According to Nicol, the underground program will produce drill results much quicker and be less expensive. "One of the nice things about this next round of drilling is it is going to happen fairly quickly. The drill holes are considerably shorter than what we've seen at surface over the past three years," Nicol explained.
Merger a win-win
The two companies believe that the merger will be a win-win situation. Niblack will benefit from Committee's experience in mine development and financial strength, while Niblack will provide Committee an advance exploration project that boasts strong geological potential, good logistics and the ability to be fast-tracked toward development.
Nicol said that Committee Bay has a track record of success in exploring, developing, and financing high-profile mineral projects "and who share our commitment to the Niblack project. With this agreement, we can accelerate the exploration and development of the property."
"Upon completion of this transaction, shareholders of the combined entity will have exposure to an experienced management and technical team, a diversified portfolio of projects, and a company with a strong balance sheet," Robins said.
Robins and Committee Bay President and CEO John Williamson, another certified professional geologist, visited the Niblack project in mid-June.
"We were very impressed with the way the project is coming along, the quality of work that has been done so far and of course the most important thing, the geological potential we see there," said Robins.
Besides the management and geological potential of the project, Robins says the ability to carry on year-round operations and the ability to fast-track a project toward development are two other factors that attract Committee Bay to the Niblack project.
"When you are working a project like Committee Bay North, it is very remote and because of the geographical constraints, you are dealing with short field seasons. As a geologist you are trying to advance a project towards being a mine; if you have to take off six months every year it doubles the amount of time to develop something," Robins explains.
Committee Bay is completing the final stages of due diligence associated with the potential merger and the company technical team has been at the project going through the data and scrutinizing the project in a lot of detail.
If the companies move forward with the merger, it is expected to take several months to receive regulatory and shareholder approval.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
Reader Comments(0)