The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Junior assembles top-notch geologists, builds strategic alliances and raises C$5 million to explore claims with many similarities
Since Mantra Mining Inc. emerged in September as the vehicle in which NovaGold Resources Inc. would spinoff its non-core assets, the Vancouver B.C.-based junior has positioned itself to become a major player on the Alaska mining scene.
Over the past eight months, Mantra has acquired whole or part interest in more than 417,000 acres of mining properties in western Alaska, assembled an impressive management team and board of directors (including two Thayer Lindsley award winners) and raised C$5 million to begin investigating its gold and base metal properties.
"The transformation of Mantra into a leading mining and exploration company seems to now have been completed. Mantra today has effective leadership; Rick Van Nieuwenhuyse and other recipients of the Thayer Lindsley award, world-class projects such as Colorado Creek, and the right strategic partners, NovaGold and Electrum Group of Companies," said Mantra Mining President and CEO Raj Chowdhry.
With a little luck, the junior explorer believes it will make another major gold discovery in one of its recently acquired 11 claim blocks scattered along the Kuskokwim Gold Belt, the same north-south-running mineralized trend that hosts the enormous Donlin Creek gold deposit.
"Life is all about 1 percent inspiration, 98 percent perspiration and finally you still need 1 percent luck. We are through the first two phases, so all we need now is the 1 percent luck," Chowdhry told Mining News May 21.
Mantra's president said he anticipates the exploration budget for 2009 will be around C$2 million with a focus on the Colorado Creek property, but a definitive budget and work plan will be worked out after the Mantra CEO meets with the company's geological team.
Strategic alliances
Mantra has raised C$5 million and gained a powerful ally in two deals that closed in May. The money was raised through a private placement that closed May 20.
Electrum Strategic Minerals bought 7.71 million units of the 14.47 million units offered by Mantra. The Mantra units, which sold for C35 cents each, are comprised of one Mantra share and a warrant to buy an additional share for C50 cents per share for a period of three years.
In addition, Cougar Gold, an Electrum affiliate, acquired 4.2 million Mantra shares in exchange for Cougar's interest in the Golden Lynx properties. Combined, Electrum and Cougar Gold own a 17.4 percent stake in Mantra. If Electrum exercises its warrants, the combined stake in Mantra would climb to about 25.7 percent.
"Having Electrum as a strategic partner will assist Mantra to become a serious entrant in the mining sector," Chowdhry said
Electrum also invested heavily in NovaGold Resources Inc. The New York-based private investment firm, poured more than C$60 million into NovaGold, and now owns 51.92 million shares, or nearly 30 percent, of that junior.
Electrum President Larry Buchanan also gained a seat on Mantra's board of directors. Buchanan is the 2006 recipient of the Thayer Lindsley award for the discovery of the San Cristobal Mine located in the Potosi Mining district of Bolivia.
"The company will be very fortunate to have two Thayer Lindsley award winners on the board of the company. Mr. Rick Van Nieuwenhuyse, the Chairman of the Board of Directors of Mantra, won the award in 2009," Chowdhry said.
In addition to tapping NovaGold's president to chair its board of directors, Mantra has recruited former NovaGold geologist Jerry Zieg to become vice president of exploration. Zieg joined NovaGold in 2005 as its senior geologist for the Ambler copper-zinc project in Northwest Alaska. Prior to working for NovaGold, the geologist spent 24 years as a geologist for Cominco American Inc. and later Teck Cominco American Inc.
"Jerry Zieg brings a wealth of experience and knowledge of the precious and base metal projects recently acquired by Mantra from NovaGold," Chowdhry said. "Jerry will enable Mantra to plan and conduct exploration work; especially on the Colorado Creek project a property which has many geologic similarities to the 40 million-ounce Donlin Creek gold deposit located in the upper Kuskokwim region of the Tintina Gold belt of Alaska and the Yukon."
NovaGold early-stage properties
In early March, Mantra closed a deal it has been working on since September to acquire all of NovaGold's interest in 397,680 acres of Alaska State mining claims. The acquisition includes two gold exploration claim groups in the Kuskokwim region (Tintina gold properties and the Colorado Creek gold project) and three western Alaska base metal properties (Kugruk, Baird and Omilak).
In exchange for the properties, Mantra issued NovaGold 3.125 million shares of its common stock, which, at the time, represented about 7 of Mantra's issued and outstanding shares.
Mantra is particularly excited about the 26,880-acre, or 11,154-hectare, Colorado Creek property, which is showing many geological similarities to the Donlin Creek deposit to the south.
"We feel that there is excellent potential to advance the properties and add value for our shareholders," said Mantra's Chowdhry. "We are especially excited about the Tintina properties, in the potential of the Kuskokwim gold belt and the Colorado Creek gold project, in particular - this will no doubt be the focus of our exploration efforts this summer. Meanwhile, we will evaluate strategic alternatives for the base metal assets."
NovaGold Vice President of Strategic Development Greg Johnson told Mining News the intrusive-related mineralization at Colorado Creek has many of the key markers that led to the Donlin Creek discovery. When one looks at mature districts around the globe, these gold deposits are usually found in groups along a certain trend," Johnson said.
"It's the logical next step for explorationists to go out and say, 'We know there are these other placer occurrences.' There has been about 4 million ounces of placer gold produced in the (Kuskokwim) district; from the south end to the north end, all of them have these intrusive (qualities) that are associated with them," Johnson explained. "Colorado Creek is certainly one of the ones that you would look at because of the level of gold that was produced historically, and it has these intrusives that are associated at Donlin."
Mantra said Colorado Creek needs a total rework of the existing data and interpretation in light of NovaGold's advanced understanding of ore controls at Donlin Creek. The work performed by NovaGold in 2008 demonstrates that the mineralization is open beyond its previously known limits. The junior said expansion of the mapping and soil database is needed as well as an additional 2,000 meters or more of exploratory drilling to test the mostly hidden, flat-lying mineralized sills.
More Kuskokwim Gold Belt properties
Chowdhry said the junior is also considering doing some exploration work on the Tintina properties this year. The 93,280 acres of State of Alaska mining claims is divided into 5 claim blocks scattered along about a 100-kilometer, or 60-mile, stretch of the Kuskokwim Gold Belt south-southwest of Donlin Creek. NovaGold has conducted limited reconnaissance mapping and sampling on these early-stage, intrusive-related exploration targets which also show similar general characteristics to Donlin Creek-type mineralization.
Mantra's most recent acquisition is 55 percent interest in the Golden Lynx properties, a group of five properties that lie along the same trend as Colorado Creek, Donlin Creek and the Tintina properties. In early May, the junior agreed to issue 4.2 million Mantra shares to Cougar Gold LLC, a Denver-based subsidiary of privately-held global mining group Electrum Ltd., in exchange for Cougar Gold's 55 percent joint venture interest in the 20,040 acres of gold properties situated about 240 kilometers, or 150 miles south-southwest of Donlin.
Cougar Gold acquired its stake in the Golden Lynx properties - Kisa, Gold Lake, Gossan Valley, Little Swift and Gold Creek claim groups - by entering into a joint venture with the Idaho-based Gold Crest Mines Inc. in April 2008. The Electrum subsidiary also has acquired 5.67 million shares of Gold Crest stock, giving it a 6.68 percent stake in the junior.
Gold Crest, 45 percent partner in Golden Lynx, drilled 945 meters that targeted an outcropping at the 4,250-acre Kisa claims in 2007. All six drill holes are reported to have encountered broad zones of gold mineralization. According to the Idaho-based junior, assay intervals containing up to 8.6 grams of gold per metric ton suggest the possibility of higher-grade zones within the intrusive breccia complex.
The 9,720-acre Gold Lake claim block is located 8 miles, or 13 kilometers, south of Kisa, and covers areas of hydrothermally altered and gold mineralized igneous dikes and sills similar to the Kisa showings. The Little Swift, Gold Creek, and Gossan Valley prospects, lie a short distance southwest of the Gold Lake claims.
Electrum, in 2008, followed up on the junior's discoveries. The privately held company, not obligated to reveal its activities to its shareholders, prefers to maintain a competitive edge by not revealing its exploration plans and discoveries to the competition. Sources tell Mining News that Electrum spent about US$1.5 million in 2008 with a primary focus on the Kisa property.
Chowdhry said Mantra has about a US$220,000 work commitment by April of next year.
In order to maintain its 55 percent interest in Golden Lynx, Mantra must contribute US$321,000 to Golden Lynx by April 18, 2010 and US$1.5 million by April 18, 2013, which will be used to fund exploration on the Golden Lynx properties. Mantra can increase its stake in Golden Lynx to 80 percent by paying another US$2.5 million by April 18, 2015.
Base metal assets in B.C.
In addition to the three Alaska base metal properties, Mantra acquired the 13,081-acre Gnome zinc-lead-silver property in northern British Columbia.
The Gnome claims are located in the Kechika Trough, the same belt where the better-known Cirque and Akie Sedex zinc-lead-silver properties are situated. The project is located immediately adjacent to the south of the Elf mineral claims held by Teck Resources and Korea Zinc.
Van Nieuwenhuyse told Mining News in January that Mantra may spin off the junior's base metal assets from its precious metals assets and fund the two different entities, separately. NovaGold is considering a similar move with its Ambler copper property in Northwest Alaska.
"(The asset split) is still being considered at a very advanced level," Chowdhry told Mining News. "Based on a few other things that are happening I would expect the probability that we will end up in that direction is very high."
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.
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