Silver Spruce Resources Inc. has signed a binding letter of intent (LOI) with three parties to acquire 100 per cent of the Melchett Lake zinc-gold-silver volcanogenic massive sulphide (VMS) project, an advanced precious and base metal project in the Thunder Bay mining district, Northern Ontario, Canada.
The 1,820-hectare project is located within an active exploration and mining region north of Geraldton, including Copper Lake's Marshall Lake VMS project, Premier Gold's Hardrock-Greenstone gold mine and past-producing Anaconda-Dofasco iron mine and the Skibi Lake and Stewart Lake iron prospects, and along one of the access routes proposed northward from Nakina to the Ring of Fire Ni-Cr-Cu-PGE (nickel-chromium-copper-platinum-group-element) exploration projects. The Ontario Geological Survey exploration highlights in 2016/2017 reported, "The potential of discovery of economic zinc-lead-silver-gold-bearing VMS deposits in the Melchett Lake greenstone belt is high."
Letter of intent
The principal terms to purchase 100-per-cent interest in the property include $150,000 in cash payments and $250,000 in Silver Spruce common shares, payable on signing and annual payments spread over three years. Minimum work expenditures total $1-million, with $100,000 during the first year, $200,000 in the second year and $700,000 prior to the third anniversary. The vendors will retain a 2-per-cent net smelter return royalty, of which 1 per cent can be purchased by the company for $1-million and the remaining 1 per cent at market price. Silver Spruce has a 90-day window after signing the LOI to carry out its due diligence and prepare a definitive agreement (DA) for the property acquisition.
"We are very pleased to acquire the Melchett Lake VMS Au property, and the company is quickly advancing its due diligence to support a decision to earn a 100-per-cent interest in the project," commented Karl Boltz, chief executive officer of Silver Spruce. "The multikilometre strike length of the known areas of mineralization, depth potential indicated by the Maxwell modelling, broad intervals of mineralization, intense alteration profile similar to well-known polymetallic deposits and presence of high-grade values of both precious metals and base metals clearly provide the company with an opportunity to grow with the strong gold, silver and zinc markets. Furthermore, our director, Greg Davison, MSc, PGeo, has first-hand experience on the Melchett Lake area, having worked the area as project manager and VP, exploration, for Kerr Addison Mines (1983 to 1984) and Tribute Minerals (1999 to 2002), respectively."
The Melchett Lake belt contains several occurrences of polymetallic zinc-lead-copper-silver-gold VMS-style mineralization, similar in character to ore deposits exploited at Mattabi, Winston Lake, Geco and Uchi Lake. Base metal mineralization consisting of pyrite, sphalerite, chalcopyrite and galena occurs within the felsic metavolcanic sequences of the property.
There are locally high-grade lenses of zinc and silver, with variable copper, gold and lead, and gold grades to 26.1 grams per tonne gold, silver grades to 560 grams per tonne silver and zinc grades to 19.1 per cent. The mineralization is interpreted to occur as paleo-topographic accumulations related to fumarolic activity, forming polymetallic deposits overprinted by a later-stage gold-rich event.
Greg Davison, MSc, PGeo, Silver Spruce director, is the company's internal qualified person for the Melchett Lake project and is responsible for the technical content of this press release within the meaning of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, under Toronto Stock Exchange guidelines.
About Silver Spruce Resources Inc.
Silver Spruce Resources is a Canadian junior exploration company pursuing development of the Pino De Plata project, located in the prolific Sierra Madre Occidental region of western Chihuahua state, Mexico. The company has signed a binding letter of agreement to acquire 100 per cent of the advanced Cocula gold project in Jalisco state, Mexico, and a letter of intent to acquire 100 per cent of the Melchett Lake Zn-Au-Ag project in Northern Ontario, Canada. Silver Spruce Resources continues to investigate opportunities that management has identified or that have been presented to the company for consideration.
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