Mr. Chris Pennimpede reports
CANTERRA MINERALS COMPLETES ACQUISITION OF THE PAST PRODUCING BUCHANS MINE, AND OTHER CRITICAL AND PRECIOUS METALS PROJECTS IN NEWFOUNDLAND AND COMPLETES $1.5 MILLION FINANCING
Canterra Minerals Corp., further to its news release issued on Nov. 22, 2023, has completed the previously announced acquisition of five critical and precious metals projects in central Newfoundland, adding 316 square kilometres to Canterra's property position. The acquisition was completed with Buchans Resources Ltd. (BRL), an arm's-length non-listed reporting issuer, and its subsidiary Buchans Minerals Corp.
In addition, the company has closed its oversubscribed, previously announced non-brokered private placement financing (see news releases dated Nov. 29, 2023, Dec. 12, 2023, and Dec. 18, 2023) for gross proceeds of $1,538,598.95.
Canterra's total property position in the central Newfoundland critical minerals and gold belts is now approximately 684 square km, allowing for expansion of exploration efforts across these highly prospective districts. The company will begin targeting work on the properties immediately with drilling scheduled on its Lemarchant project anticipated in the first quarter of 2024.
Acquisition highlights:
- Creates a district-scale portfolio consisting of seven resource stage critical minerals projects;
- Consolidated indicated mineral resource of 1.4 billion pounds contained zinc and inferred mineral resource of 317 million pounds contained zinc;
- Consolidated indicated mineral resource includes 251 million pounds of contained copper and significant gold and silver credits;
- Adds a large bulk-tonnage mineral resource at the Buchans mine (Lundberg deposit) with substantial opportunity for new high-grade Zn-Cu volcanogenic massive sulphide discoveries within the brownfields site;
- Synergistic acquisition that consolidates critical and precious metals properties (total size of 684 square km) in the Buchans camp, Victoria Lake camp and Valentine Lake shear zone;
- Canterra emerges with two drill-ready projects both with prospective advanced-stage high-grade Cu-Zn massive sulphide targets;
- Addition of Michael Power, currently a director of BRL, as director of Canterra, an engineer and chartered financial analyst with over 50 years of experience in the mining industry;
- Canterra bolsters its exploration team with the addition of Paul Moore as vice-president, exploration, and David Butler as exploration manager, each currently holding those roles at BRL, who combined have 60 years of experience in Eastern Canada.
Mineral resource estimates at the properties
The properties host significant polymetallic mineral resource estimates completed by previous operators over various effective dates. All mineral resource estimates have considerable opportunity for expansion.
Chris Pennimpede, chief executive officer and president of Canterra, commented: "Canterra aims to uncover mineral deposits in central Newfoundland. These assets strengthen land position within the central Newfoundland mining corridor, opening avenues for substantial discoveries within the belt. Our existing properties near the Teck's past-producing Duck Pond mine already has compelling VMS deposits and exploration prospects, complementing our established orogenic gold deposit opportunities. Echoing the industry adage that the best place to look for a mine is in the shadow of a head frame, Canterra will now be exploring at the brownfields site of the prolific Buchans mine. The Buchans project is ripe for a modern approach with significant exploration potential for high-grade VMS mineralization. With a 684 square km land position encompassing mineral rights across existing deposits, we anticipate being strongly positioned to unveil the next mineral discovery in central Newfoundland."
The principal properties to be acquired are the Buchans mine property (hosting the Lundberg deposit), the Bobby's Pond property (hosting the Bobby's Pond deposit), the Tulks Hill property (hosting the Tulks Hill deposit) and the Daniel's Pond property (hosting the Daniel's Pond deposit).
Buchans mine property
The Buchans mine property encompasses 82.5 square km of mineral claims and mining leases and is located adjacent to the town of Buchans. This property contains the past-producing Buchans mine that was operated by ASARCO between 1928 and 1984 and is underlain by the volcano-sedimentary Buchans group. The property also contains the Lundberg deposit, a VMS stockwork deposit that comprises a large, near-surface resource of stockwork sulphide mineralization. Lundberg's mineralization is located immediately beneath workings of the previously mined, high-grade Lucky Strike massive sulphide orebody from which ASARCO mined 5.6 million tonnes of ore averaging 18.4 per cent zinc, 8.6 per cent lead, 1.6 per cent copper, 112 grams per tonne silver and 1.7 g/t gold, essentially prestripping a large portion of the Lundberg resource.
The total ore mined over the life of the historic Buchans mine is estimated to be 16 million tonnes at an average grade of 14.5 per cent Zn, 7.6 per cent Pb, 1.3 per cent Cu, 1.37 g/t Au and 126 g/t Ag. The current Lundberg deposit resource estimate is shown herein.
The Buchans mine property lies on the north side of Beothuk Lake 35 km from Teck Resources' past-producing Duck Pond mine and Canterra's Lemarchant VMS deposit. This project has benefited from substantial relogging and digitization of over 70 years of paper data and hundreds of thousands of metres of core relogging. In addition, a recent collaboration agreement with Boliden AB, a global mining company, utilized 3-D modelling of these data and reprocessing the vast existing geophysical database. These data identified several drill targets for new high-grade massive sulphide deposits outside of the existing resource base. No drilling has yet been done to test these compelling new targets.
2018 exploration drilling at the underexplored Two-Level target intersected significant results in drill hole H-18-3524:
- 1.8 metres of 5.57 per cent Zn, 0.76 per cent Cu, 3.15 per cent Pb, 90.5 g/t Ag and 0.37 g/t Au;
- Including one m of 8.70 per cent Zn, 1.26 per cent Cu, 4.87 per cent Pb, 133.2 g/t Ag and 0.47 g/t Au.
The success of drilling at Two-Level target confirms recent modelling and demonstrates the potential to discover both new high-grade in situ VMS mineralization and transported VMS mineralization that comprised 52 per cent of the previous mining. The Two-Level mineralization also represents an opportunity to add higher-grade resources to expand the adjacent Lundberg deposit.
Terms of the asset purchase agreement
The acquisition of the properties was a cashless transaction, with the consideration comprising (a) 24.91 million common shares of Canterra, representing an approximate 19.9-per-cent ownership interest at closing, and (b) 128,554,216 common share purchase warrants of Canterra exchangeable for common shares of Canterra within two years of closing (subject to extension in certain circumstances), for no additional consideration, upon (a) the transfer of the properties that are considered material to the company; (b) the approval by the TSX Venture Exchange and filing by the company of an independent technical report on the historical Buchans mine and Lundberg deposit; and (c) following subsequent actions of Buchans Minerals, the holder of the consideration warrants, and BRL, the distribution of up to all of the common shares to be received on exchange of the consideration warrants to the shareholders of BRL, provided that: (i) such exchange and distribution will not result in a change of control of the company or the creation of a new control person of the company; (ii) in respect of the distributed shares, BRL directs the company to issue such distributed shares directly to BRL shareholders and shall not be a holder of such distributed shares at any time; and (iii) in the event that such exchange and distribution results in the creation of a new insider, the BRL shareholder shall have filed and obtained clearance of a personal information form or declaration, as applicable, with the TSX-V. For greater certainty, a BRL shareholder (i) individually; (ii) in conjunction with any of its affiliates or associates; or (iii) acting jointly or in concert with any other shareholder of the company will not result in a change of control of the company, the creation of a new control person of the company or the creation of a new insider (without filing and clearing a personal information or declaration, as applicable). BRL may exchange some of the consideration warrants for common shares of Canterra that it would hold, provided that BRL will not thereby become a control person of the company or effect a change of control of the company. For these purposes, affiliate, associate, change of control, control person and insider are as defined by the policies of the TSX-V.
The consideration shares and the consideration warrants (and underlying common shares of Canterra) will be subject to a statutory hold period, expiring four months and one day from the closing, being April 20, 2024. Additionally, they will be subject to transfer restrictions for a period of 24 months postclosing. The common shares of Canterra issuable upon exchange of the consideration warrants will be subject to contractual holds with one-third being freely tradable on distribution (assuming expiry of statutory hold), one-third being freely tradable on the date which is three months from distribution and one-third being freely tradable on the date which is six months from distribution.
Planned technical work on the properties
The company has provided an undertaking to the TSX-V to file the technical report within 90 days of closing the acquisition.
The company anticipates expenditures on the properties in 2024 will consist of holding costs (estimated to be $230,100), work requirements ($51,000) and phase 1 exploration expenditures on the Buchans mine property. The phase 1 exploration expenditures on the Buchans mine property are expected to be primarily desktop in nature. Fieldwork will be limited to survey work (geophysical) or rock sampling (geochemical). The phase 1 exploration expenditures are estimated to be $100,000 and will focus on 3-D modelling and drill targeting of all historical data at the Buchans mine property.
Financing details
Pursuant to the offering, Canterra issued 23,670,753 shares comprising critical mineral exploration tax credit (CMETC) flow-through (FT) common shares at a price of 6.5 cents per FT share for aggregate proceeds of $1,538,598.95.
The gross proceeds of the offering will be used to finance further exploration programs, including but not limited to drilling at the Boomerang and Lemarchant projects and expenditures on the properties, which will qualify as Canadian exploration expenses and flow-through critical mineral mining expenditures as those terms are defined in the Income Tax Act (Canada), which will be renounced to the purchasers of the FT shares with an effective date no later than Dec. 31, 2023.
The securities issued pursuant to the offering are subject to a four-month-and-one-day statutory hold period in Canada, expiring on April 21, 2024.
In connection with the offering, the company paid finder's fees of $80,459.94 in cash and 1,260,945 warrants to arm's-length persons. Each finder's warrant is exercisable at 6.5 cents until Dec. 20, 2025.
About Canterra Minerals Corp.
Canterra Minerals is a diversified minerals exploration company with a focus on critical minerals (zinc and copper) in central Newfoundland. Canterra's critical metals projects include four deposits which host compliant resources with considerable exploration potential. The deposits are located in close proximity to Teck Resources' past-producing Duck Pond mine and the past-producing Buchans mine. The deposits host a combined complaint resource of 4.1 million tonnes of indicated resources and 1.2 million tonnes of inferred resources. See the NI 43-101 Technical Report "Lemarchant and South Tally Project, Technical Report and Updated Mineral Resource Estimate" effective Sept. 20, 2018. In addition, Canterra holds exploration-stage gold properties that cover 80 km of strike length of the regional gold-bearing Rogerson Lake structural corridor which hosts Marathon Gold Corp.'s feasibility-stage Valentine Lake gold project. The gold projects have been subject to four drilling campaigns, demonstrating many gold occurrences and warranting further exploration. In Alberta, Canada, Canterra also holds a 50-per-cent interest and is operator of the Buffalo Hills diamond project, with Star Diamond Corp. holding the remaining interest. The Buffalo Hills diamond project has been subject to considerable exploration expenditures, including a bulk sample, which has identified 38 kimberlites.
The scientific and technical information contained in this news release was reviewed and approved by Mr. Pennimpede, PGeo, president and CEO of Canterra. Mr. Pennimpede is a qualified person as defined by National Instrument 43-101.
We seek Safe Harbor.
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