Merc Completes Acquisition of Colomac Gold Mine
TORONTO, Jan. 26, 2012 /CNW/ – Further to its press release dated December 15, 2011, Merc International Minerals Inc. (“Merc“) (TSX Venture: MRK) is pleased to announce that it has completed the acquisition of a 100% interest in the mineral claims and leases (the “Colomac Property“), including those of the former producing Colomac Gold Mine in the Northwest Territories (“NWT“) from Aboriginal Affairs and Northern Development Canada (“AANDC“).
- Includes the past producing Colomac Gold Mine, four surrounding gold deposits, and several gold showings;
- Historical, non-NI 43-101 compliant gold resource ranging from approximately 750 thousand to 1.1 million ounces of gold (“oz Au“) (See Table 1 for further details; cut-off grades are unknown);
- A NI 43-101 technical report and mineral resource estimate for the Colomac Property, is currently being completed by ACA Howe International Ltd. and is expected to be finalized in the first quarter of 2012; and
- Historic drilling at the Colomac Gold Mine from 1997 indicates the presence of a high-grade gold shoot to a depth of over 1,000 metres and an extension of mineralization beneath the pit to a vertical depth of 700 metres.
David Wiley, Merc President and CEO, remarked, “We are excited to have completed the Colomac acquisition and that Merc now controls over 90% of the Indin Lake Gold Camp. We are encouraged by the historic resource estimates, which we discovered during the due diligence process for the acquisition, and believe we have made an attractive acquisition. We will be working on a NI 43-101 compliant resource estimate in the near future, and we expect the winter 2012 drill program to commence in March. Now that we have closed the transaction, our objective will be to expand known zones of mineralization to depth and along strike, and begin remediating the historic reclamation sites.”
In consideration for the conveyance of the Colomac Property, Merc will commit to reclaim three disturbed historic exploration sites not associated with the Colomac Property. Reclamation will be carried out on behalf of AANDC to a maximum of $5,000,000. Merc will not be assuming the reclamation liabilities directly. Merc is not responsible for any historical environmental liabilities associated with Colomac.
The Colomac Property represents a rare opportunity as a past producer and under-developed gold deposit with exploration potential. Merc believes there is an opportunity to develop resources at the Colomac Property (as historic open pit mining was limited to less than 200 metre vertical depths and only one of five known deposits was developed). All deposits at Colomac remain open to depth and laterally.
The Main Deposit on the Colomac Property was not mined out when production ceased in 1997. Perennial low gold prices and operational difficulties ultimately lead to the termination of mining at the Colomac Property. Merc believes a resource remains that has the potential to be expanded by drilling known mineralization to depth and along strike, as well as by exploring for high-grade plunging gold shoots that are known to exist, plunging over 1,000 metres to depth.
Table 1 below summarizes historical, non-NI 43-101 compliant resource estimates sourced from public documents and internal company reports; these estimates should not be relied upon. Merc has not independently verified these numbers nor does it propose that they should, in any manner, be viewed as a current mineral resource or mineral reserve. A Qualified Person as defined in NI 43-1010 has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. These historical numbers are presented in support of the position that the deposits were not mined out, and as such, opportunities exist to build upon what may have been left. Merc is not treating the historical estimates as current mineral resources or mineral reserves.
Table 1. Colomac Historic, Non-NI 43-101 Compliant Resource Estimates
|Year||Source||Short Tons or Ore||Grade (oz/ton)||Oz Au Resource Estimate||Subsequent Oz Au Mined||Net Oz Au Resource Estimate2|
|1988||Energy, Mines and Resources Canada, Mineral Bulletin, 223||27,000,000||0.060||1,680,000||527,908||1,152,098|
|1990||The Northern Miner||28,100,000||0.056||1,573,600||527,908||1,045,692|
|1995||1 Royal Oak Mines Inc.||16,692,000||0.052||860,400||108,678||751,722|
1Estimates are based on a Royal Oak Mines Inc. (“Royal Oak“) report written in 1995 that projected the ore reserve as at December 31, 1996. Subsequently, Royal Oak mined 108,678 oz Au in 1997.
2 Merc has not independently verified these numbers nor does it propose that they should, in any manner, be viewed as a current mineral resource or mineral reserve. No information is available for the cut-off grades used to calculate these estimates.
Royal Oak 1997 Drilling at Colomac
During its last year of operation at Colomac, 1997, Royal Oak drilled 21 holes following up on a near surface intersection of 1.08 ounces per ton gold over 4 metres in Zone 3.5. Drilling pursued a higher grade mineralized shoot plunging 70 degrees to a depth of 1,000 metres. This represented the first discovery and definition of a high-grade mineralized feature within the host Colomac Dyke. The presence of recently discovered high-grade shoots significantly increases the exploration potential of the dyke. Merc intends to aggressively pursue these plunging shoots in its upcoming drill program.
In 1997 Royal Oak also tested the dyke below Zone 2.0, the zone that accounted for the majority of production at Colomac. A single hole was drilled below the Zone 2.0 pit 2,000 metres north of Zone 3.5, and it intersected the dyke 500 metres below the bottom of the pit (reporting a 120 metres intersection of 1.30 grams per tonne gold). The 1997 deep drilling has confirmed that the Colomac Dyke continues uninterrupted to depth, the dyke maintains significant mineralized widths, the grade of mineralization appears consistent, and a high-grade gold shoot exists within the dyke and represents one of the most exciting target opportunities yet to be explored.
Given its robustly mineralized characteristic, Merc believes that Colomac continues to represent an under-explored opportunity with the potential to develop and expand resources throughout the five known deposits.
About The Colomac Property
The Colomac Property lies within the central portion of Merc’s 94,701 hectare Indin Lake property, 220 kilometres northwest of Yellowknife, NWT. Access is by winter road from Yellowknife or year round by chartered aircraft to a 5,000 foot airstrip at the former Colomac Gold Mine site. With this acquisition Merc has secured a contiguous land position fully surrounding the Colomac Property, and consolidated greater than 90% of the Indin Lake Greenstone Belt including the related Indin Lake Gold camp. The Colomac Property contains at least five separate gold deposits open in all dimensions (Colomac Main, Grizzly Bear, Goldcrest, Dyke Lake, and 24/27), only one of which, the Colomac Main Deposit, was historically mined. Intermittent mining from 1990 to1997 was limited to three shallow open pits developed on a steeply dipping quartz-feldspar porphyry intrusion (Colomac Dyke). Historical production is reported to be 527,908 ounces of gold with an average head grade of 1.66 grams per tonne (see Table 2). Mining activities impacted only a small portion of the dyke’s 7 kilometre mineralized strike length.
Table 2. Colomac Production History
|Year||Ounces Produced||Tonnes Milled||Head Grade (g/tonne)||Recovery||Cash Cost/oz (US$)||Average Gold Price (US$)|
Colomac lies within a north striking, steeply dipping, Archean greenstone belt of deformed sedimentary and intermediate to ultramafic volcanic rocks. Deposits appear in two distinct geological settings with the Colomac Main, Goldcrest, and Dyke Lake deposits hosted within quartz-feldspar porphyry dykes, whereas the Grizzly Bear and 24/27 deposits occur near or within the sedimentary/volcanic rock contact.
Colomac Main Deposit
The Colomac Main Deposit occurs within a north-south striking, quartz-feldspar porphyry dike approximately 7 kilometres long and 50 metres wide bounded by diorite and andesite. Mineralization is predominantly free gold spatially associated with quartz-carbonate veining and minor sulphides. During deformation, the dyke behaved as a competent unit enclosed within more ductile rocks, thus representing the classic competency contrast condition present in many Archean lode gold camps. This has led to the preferential emplacement of gold-bearing veins within the quartz-feldspar dyke.
Grizzly Bear Lake and 24/27 Deposits
These three deposits are typical of many gold deposits within the Indin lake Greenstone Belt. Like the Treasure Island and North Inca-Diversified deposits, the Grizzly Bear Lake and the 24/27 deposits are located at a fault related volcanic rock sedimentary rock contact exhibiting considerable shearing. Gold mineralization is characterized by quartz stringers associated with silicification and carbonatization within volcanic rocks adjacent to the steeply dipping north-south volcanic/sedimentary rock contact.
About Merc International Minerals Inc.
Merc is a Canadian-based exploration company focused on acquiring and developing gold mineral properties in the NWT. Its primary land position covers 234,013 acres or 94,701 hectares in the Indin Lake Gold Camp, located approximately 220 kilometres north of Yellowknife, NWT.
The technical information in this news release was reviewed and approved by Merc Director, Dr. Michael J. Byron, a Qualified Person under NI 43-101. Historical information was obtained from previous Royal Oak Reports, The Northern Miner, and Northwest Territories Geoscience Office.
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.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties, including, but not limited to, the timing of future drilling, the expansion of the mineralization, the remediation of historic reclamation sites, the completion of a NI 43-101 compliant resource. 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.