St. Eugene Mining Targets Gold Production with Tartan Lake Mine Acquisitionadmin
St. Eugene Mining President Rolly Trenaman today announced that the company has entered into an agreement to acquire the assets of the Tartan Lake Gold Mining Property from Claude Resources Inc.
The Tartan Lake Property, located forty kilometres from Flin Flon, Manitoba, was previously in operation between 1987 and 1989. Developed by ramp access to the 1,000-foot level and with mineralization developed on five levels, the property contains a 400-tonne-per-day concentrator and related facilities. The Tartan Lake Property acquisition offers St. Eugene an extensive land package within a proven mineral belt. The property hosts a historic mineral resource along with several known exploration targets. The project is close to a smelter and existing infrastructure on the property reduces exposure to escalating capital costs.
“After a thorough technical review, our mining team concluded that by improving mining and milling practices, the Tartan Lake Property can be a successful gold mining venture,” said St. Eugene President Rolly Trenaman. “The existing infrastructure, underground mine development, and knowledge base acquired through the previous operation period, and extensive exploration targets, combine to provide an opportunity for St. Eugene to put the property into production at relatively low capital costs and enable our Company to quickly capitalize on improved gold prices.”
The technical review undertaken by St. Eugene identified a number of attributes of the property that prompted the Company to proceed with its acquisition. These include:
– Drilling to the 1,800-foot level has confirmed the continuity of the main gold-bearing zone to that level. – The property covers a further five kilometres of strike length to the east, the shear zone which hosts the Main and other gold-bearing zones that have hosted mine production to date. – Close proximity to mining services in Flin Flon and access to Manitoba Hydro electrical service creates operating efficiencies. – Exploration in the area near the mine has defined a number of gold zones which could provide additional resources.
– The arrangement with Claude includes a 35% interest in the Amisk Lake gold property, which has reported non 43-101 compliant historic resource of approximately 200,000 tonnes with a grade of 12 grams/tonne (0.35oz./tonne) gold. Until drilling and other detailed exploration is conducted over the prospect, the above mentioned “resource” estimate is highly speculative and should only be considered as indicative of mineralization potential.
“St. Eugene Mining intends to build a gold mining entity based in the mining friendly jurisdiction of Manitoba starting with the Tartan Lake property. Flin Flon would act as a hub for the development of a number of promising properties and prospects within reasonable administrative distance,” said St. Eugene Mining president Rolly Trenaman. “St. Eugene is extremely pleased to be associated with Claude in this transaction.”
St. Eugene will pay a fee of $100,000 to Claude (the “Fee”), payable in cash or by the issuance of 700,000 common shares of St. Eugene in consideration for a 60-day exclusive due diligence period.
The purchase price for the Tartan Lake Property is $3,000,000 payable over two years, plus a sliding-scale royalty on minerals recovered from the Tartan Lake Property based on the price of gold, ranging from 0% if the price of gold is below US$600/oz, to 6% if the price of gold is greater that US$1,100/oz. St. Eugene has the option to buy down the royalty to 1% at any time. The purchase price may be paid in cash or shares at the election of St. Eugene. Up to 11,666,000 shares of St. Eugene, at deemed prices ranging from $0.143 to $0.50, may be issued if St. Eugene elects to pay the Fee and the purchase price entirely by the issuance of shares. In the event that any issuance of shares to Claude would result in Claude becoming a control person of St. Eugene such issuance will be subject to shareholder approval.
The purchase price for the Amisk Lake Property is a 1% net smelter return royalty.
Closing of the acquisition of the Tartan Lake and Amisk Lake Properties is subject to a satisfactory due diligence review by St. Eugene, and acceptance for filing by the TSX Venture Exchange.
The Tartan Lake and Amisk Lake Properties would be promising additions to the Company’s Moyie Lake silver/lead/zinc project in southeastern British Columbia, where positive results have been achieved in recent exploration work.