The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Focused on Brewery Creek, Golden Predator agrees to sell North of 60 Mining News – April 3, 2020
Golden Predator taps high-grade gold during a 4,000-meter winter drill program carried out at 3 Aces in 2018.
Seabridge Gold Inc. March 30 announced an agreement to acquire full ownership of Golden Predator Mining Corp.'s 3 Aces gold project in the Yukon.
Lying alongside the Nahanni Range Road, 3 Aces is an easily accessible project that covers 357 square kilometers (138 square miles) of high-grade gold discoveries and targets in southeastern Yukon.
The target concept for 3 Aces is consistent with some of the largest and richest gold districts in the world, including the California Mother Lode Belt, Juneau Gold Belt in Alaska, Murentau in Uzbekistan and Obuasi in Ghana.
Golden Predator's exploration has identified a broad area of gold-in-soil extending more than 20 kilometers (12.4 miles) along strike and recent drilling in the Central Core Area has progressed to a point where, with additional exploration drilling, the property could potentially advance to an initial resource with exceptional grade.
"We think 3 Aces is a worthy addition to the three outstanding exploration opportunities we already own in British Columbia, Nevada and the Northwest Territories," said Seabridge Gold Chairman and CEO Rudi Fronk. "Golden Predator has done an excellent job of demonstrating the exploration potential at 3 Aces, confirming the project's positive metallurgy and establishing excellent relationships with local First Nations and communities."
To gain full ownership of 3 Aces, Seabridge has agreed to issue Golden Predator 300,000 shares, valued at roughly C$4.25 million at current Seabridge share price on the Toronto Stock exchange; potential future cash payments of C$2.25 million, continuing royalty participation in the project by Golden Predator; and an immediate cash payment of C$263,000 as reimbursement for project-related payments made by the seller. If the deal does not close, C$218,000 of the cash payment to Golden Predator would convert into a loan.
The agreement also grants Golden Predator a 0.5% net smelter royalty on the project.
While Golden Predator considers 3 Aces a high-quality asset, its focus over the past year has been on restarting operations at Brewery Creek, a past producing gold mine about 55 kilometers (35 miles) east of Dawson City, Yukon.
According to a calculation completed in January, Brewery Creek hosts 21.14 million metric tons of indicated oxide resource averaging 1.13 grams per metric ton (765,000 ounces) gold, a 55% increase over the last calculation completed in 2014.
This resource, however, does not include an extensive amount of drilling completed last year.
"In the past year, we have seen an impressive growth in the gold resource at Brewery Creek as recently defined in a 2019 NI 43-101 report, which incorporated drilling data through 2014," said Golden Predator Mining CEO Janet Lee-Sheriff. "A new resource estimate incorporating more than 212 holes not included in the 2019 resource is underway along with a feasibility study for reprocessing the existing heap leach material mined and partially processed by Viceroy, the original operator."
The C$4.25 million of Seabridge shares will provide Golden Predator with an equity ownership in other gold projects, including the world-class KSM porphyry gold-copper project in British Columbia's Golden Triangle.
According to the most recent calculation, KSM hosts 2.98 billion metric tons of measured and indicated resources averaging 0.52 grams per metric ton (49.7 million ounces) gold, 0.21% (13.9 billion pounds) copper, 2.8 g/t (265 million oz) silver and 54 parts per million (312 million lb) molybdenum; plus 4.56 billion metric tons of inferred resource averaging 0.38 g/t (56.3 million oz) gold, 0.32% (32 billion lb) copper, 2.4 g/t (349 million oz) silver and 32 ppm (295 million lb) molybdenum.
A preliminary feasibility study detailed the plans for a mine at KSM that would average 540,000 oz gold, 156 million lb copper, 2.2 million oz silver, and 1.2 million lb molybdenum annually for 53 years.
Seabridge also owns the Courageous Lake gold property in Northwest Territories; Snowstorm gold property in Nevada; and Iskut gold-copper property in B.C.
"In addition to being able to focus entirely on returning our Brewery Creek Mine to an early production decision, we look forward to being a shareholder in Seabridge Gold, whose KSM asset contains NI 43-101 measured and indicated resources of 49.7 million oz of gold plus 13.9 billion lb of copper (at 0.52 grams per tonne gold and 0.21% copper) and an additional 56.3 million oz of gold plus 32 billion lb of copper (at 0.38 grams per tonne gold and 0.32% copper) in the inferred category, making it one of the world's largest undeveloped gold-copper resources," said Lee-Sheriff. "In addition, Seabridge owns the Courageous Lake deposit with measured and indicated resources of 8 million ounces of gold grading over 2 g/t plus an additional 3.9 million oz of gold in the inferred category, also above 2 g/t gold. With this world class gold endowment in a rising gold market, we believe the shares have excellent upside potential. Our involvement with 3 Aces will continue as a royalty holder and we look forward to assisting Seabridge in the transition to their team."
In addition to the shares and royalty, Seabridge has agreed to pay Golden Predator an additional C$1 million upon confirmation of an NI-43-101 compliant mineral resource of 2.5 million oz of gold at 3 Aces and a further $1.25 million when that resource reaches 5 million oz.
Considering the scale of high-grade and bulk tonnage gold potential identified across a wide swath of 3 Aces, there is a good chance Seabridge will hit these gold milestones that trigger additional payments to Golden Predator.
3 Aces lies on the eastern margin of the Selwyn Basin, a thick package of sedimentary rocks that extends across the Yukon and is host to several enormous base metal deposits. Seabridge said the multiple phases of folding and fault systems at 3 Aces provide ideal traps for gold-bearing fluids expressed as quartz veins.
Seabridge said discrete quartz veins containing arsenopyrite-pyrrhotite-pyrite and free gold within a broad zone of gold-bearing iron carbonate-clay alteration will be the target of its exploration.
Of the more than 300 holes drilled at 3 Aces, 37% have cut grades higher than 5 g/t gold and 27% topped 8 g/t gold. Highlights from past drilling include:
• 10.7 meters of 32.86 g/t gold in hole 3A16-032.
• 4.6 meters of 58.75 g/t gold in 3A17-124.
• 16.8 meters of 20.5 g/t gold in 3A17-133.
• 4.6 meters of 81.35 g/t gold in 3A17-208.
• 21.33 meters of 18.33 g/t gold in 3A17-209.
"Our exploration team is keen to get going on 3 Aces, beginning with a review of the extensive data generated by Golden Predator," said Fronk.
Closing of the transaction is subject to the usual terms and conditions, including final due diligence by Seabridge and the approval of the applicable stock exchanges.
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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