First Class Metals plc (FCM) plans to acquire the three claims covering 48km2 of developed gold mines in the Sunbeam project in northwest Ontario, Canada.
SUNBEAM
The potential purchase from Canadian vendor Nuinsco Resources Ltd lies in Ramsay-Wright township in the Superior Province of the Canadian Shield.
The property comprises the Sunbeam mine, which operated from 1898 to 1905, and the Pettigrew and Roy mines.
Covering 21km2 Sunbeam contains 104 single cell claims and the contiguous English Option holds nine multi-cell claims over 27km2.
FCM said that other multiple gold occurrences were also known including the Road Zone, AL198 Zone, WN2 occurrence and the Rubble occurrence.
The structure hosting the Sunbeam mine is open in all directions with previous diamond drilling reporting 93.3g/t Au over 0.44m (from 99.5m), with no drilling below this level.
Nuinsco has memoranda of understanding to renew the exploration permit over the entire 48km2, and which can be transferred to a new owner.
FINANCING
FCM will finance the acquisition with a 12-month unsecured convertible loan note from existing, long-term shareholders Sanderson Capital Partners Ltd and Afzal Valli for £1 million.
Additionally, two ultra high net worth investors subscribed for 666,667 shares at 12p raising £80,000.
Under the option agreement, FCM will pay C$700,000 in three tranches over a period of eight months from the date of signing the agreement.
The company will spend C$750,000 in exploration on the property over a period of three years.
On a NI43-101 indicated resource of 250,000 oz, FCM will pay Nuinsco C$250,000 and a further C$250,000 on an additional indicated resource of 250,000 oz.
Nuinsco retains a net smelter return royalty of 1%, with FCM having the option to buy the remaining 50%, if marketed, for C$500,000 on a right of first refusal basis.
POTENTIAL
Chief executive Marc Sale said that the old mine workings and the wider area had limited modern exploration, but previous drilling and limited production uncovered “very high-grade material”.
“We believe with a structured well-planned period of exploration once all historic data has been assimilated this project could identify the untapped potential that exists across the entire claim area.”