Merc Enters into Binding Option Agreement to Acquire Gold Property in Northwest Territories
January 10, 2011
Merc International Minerals Inc. (“Merc”) (TSXV: MRK) announced today it has entered into a binding option agreement with Ursa Polaris Developments Corporation (“Ursa”) to acquire 15 mining leases and 3 mining claims. The agreement encompasses multiple properties within the Indin Lake Greenstone Belt, directly west and northwest of Merc’s Damoti Lake Gold property.
Merc President & CEO, David Wiley, commented, “We are pleased to announce the first component of Merc’s Northwest Territories gold exploration property expansion program. We believe that this promising area has been under-explored, and the option agreement with Ursa enables us to establish a significant regional presence with multiple exploration properties all located in the heart of a historic gold camp. We intend to continue growing our Northwest Territories exploration property portfolio and rapidly advance existing properties through exploration.”
Option Agreement with Ursa
Under the agreement with Ursa, Merc has optioned 15 contiguous mining leases (the Indin Lake leases) and 3 separate mining claims (Treasure Island, Laurie Lake, and Barker-Vidie.).
Option payments are staged where Merc has the option to make the payments in cash or common shares, subject to receipt of requisite approval including the approval of the TSX Venture Exchange should Merc elect to issue common shares. Upon making the final payment Merc will own 100% of the mining leases and mining claims outright.
On signing the agreement Merc paid $150,000 in cash. The balance of the payments totals $600,000 and is payable over the next three and a half years in cash or common shares at Merc’s option as follows:
|on or before July 31, 2012||$100,000|
|on or before July 31, 2013||$250,000|
|on or before July 31, 2014||$250,000|
The Indin Lake area is one of the few remaining under-explored historic gold camps in Canada. Several gold deposits and showings lie within this belt, the most significant being the formerly producing Colomac open pit mine, located 12 kilometres southeast of Treasure Island.
The 15 Indin Lake mining leases are located 11kilometres northwest of the Damoti Lake Gold property and cover a 6.5 kilometre section of a regional north-northwest mineralized shear zone. Three main gold deposits have been identified in association with this shear zone, the North Inca, Diversified, and Lexindin deposits. Exploration shafts and limited underground development were completed on the North Inca and Diversified deposits in the 1940’s to explore multi-stage quartz veins characterized by high-grade gold mineralization. All deposits under the Indin Lake leases are open latterly and vertically suggesting the possibility that they may converge into a single large system.
Two of the mining claims optioned under the agreement, the Treasure Island gold deposit and the Laurie Lake gold showing, lie along a folded and sheared sedimentary/volcanic rock contact within the same belt of Archean greenstone rocks as the past producing Colomac Gold Mine located 10 kilometres south.
Indin Lake Mining Leases
North Inca Deposit
The North Inca deposit consists of 3 parallel, north striking quartz veins of variable widths. Historical development on the site was limited to vertical depths of less than 100 metres, leaving the deposit open to exploration at depth. Moreover, the en-echelon nature of the vein sets indicates the potential for the deposit to continue along strike as well. Six historic holes were drilled 500 metres north of the North Inca deposit testing quartz veining believed to be the deposit’s northern extension. Assay results returned an average grade of 16.20 g/t gold over an average width of 1.4 metres.
Historical mineralization at North Inca includes a 183 metre section of vein within the shaft area that averaged 15.08 g/t gold over 1.5 metres between depths of 48.7 metres to 91.4 metres. Historical surface trenching also returned high-grade mineralization including 25.7 g/t gold over 4 metres.
The Diversified deposit shares similar characteristics to the North Inca deposit and is located approximately 1.2 kilometres to the north. The deposit’s ”Main Zone” has been traced for 220 metres on both the 54 metre and 145 metres levels, with an average grade of 9.60 g/t gold over 1.67 metres on the 54 metres level, and 17.30 g/t gold over 1.61 metres on the 145 metres level. A historical hole drilled in the vicinity of the shaft area intersected 25.71 g/t gold over 4 metres, attesting to the high-grade nature of the deposit’s mineralization.
The Lexindin Deposit is located approximately 1.3 kilometres north of the Diversified shaft. Tensional, en-echelon, quartz veins lying obliquely to branches of the main shear zone make up the mineralized zones at Lexindin. Veins dip steeply north within the 40 metre to 60 metre wide shear zone and open-up laterally with increased depth. Exploration drilling has been limited to less than 150 metres vertical depth with historical intersections of 113.80 g/t gold over 3.05 metres, 18.85 g/t gold over 1.53 metres, and 22.97 g/t gold over 2.37 metres.
Treasure Island Deposit and the Laurie Lake Showing
Treasure Island Deposit
The Treasure Island gold deposit consists of at least four stacked mineralized zones (North, Central, South and New South) located at the volcanic sedimentary rock contact in association with a felsic dyke; a similar mineralized and geological environment to that of the Colomac Mine located 10 kilometres south. The North Zone is 200 metre long and 2.6 metres wide with a grade of 7.88 g/t gold to a depth of 55 metres. The 130 metre long Central Zone occurs at the northern contact of the felsic dyke, 50 metres south of the North Zone. Historical reports describe the zone as having a minimum depth of at least 100 metres with an average grade of 20.91 g/t gold. The South Zone, which is the principle gold bearing zone, lies about 20 metres south of the felsic dyke. As with the North Zone, the South Zone mineralization is characterized by an increase in the amount of quartz along with minor pyrite, pyrrhotite, chalcopyrite, sphalerite and galena.
Laurie Lake Showing
The Laurie Lake gold showing is located 3 kilometres southwest of the Treasure Island deposit and lies along the same sedimentary/volcanic rock contact. Five diamond drill holes intersected stacked mineralized zones similar to Treasure Island, with high-grade assays ranging from 4.11 g/t to 12.34 g/t gold. Historical trench samples range from trace to 73.15 g/t gold over 1.8 metres. Both Laurie Lake and Treasure Island point to the untested potential of this mineralized contact.
Merc is a Canada-based exploration-stage company focused on acquiring and developing gold mineral properties in the Northwest Territories. The company’s flagship asset is the Damoti Lake Gold property, located 200 kilometres north of Yellowknife, Northwest Territories.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Merc, including, but not limited to, the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of exploration results and estimates, currency fluctuations, dependency upon regulatory approvals, the uncertainty of obtaining additional financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. This press release is not, and is not to be construed in any way as, an offer to buy or sell securities in the United States.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.