(TheNewswire)
Timmins, Ontario – TheNewswire – July 21, 2022 - Melkior Resources Inc. (“ Melkior ” or the“ Company ”) (TSXV:MKR) (OTC:MKRIF) is pleased to announce that theTSX Venture Exchange (“ TSXV ”) has approved its previously announcedoption agreement (the “ Agreement ”) to acquire 100% of the GenexProject (“ Genex ”) from International Explorers & Prospectors Inc.(“ IEP ”). The Genex Project is located approximately 20kilometres west of Timmins and borders Melkior’s Carscallen Projecton its northeast boundary.
The TSXV approval will allow the Company to make theinitial cash payment and issuance of 500,000 common shares to IEP tobegin the earn-in for Option 1 as described further in this newsrelease.
The Genex Project is an advanced gold-copper VMSexploration target with significant near-term resource potential. Thezones have been historically interpreted over approximately 300 metreswide with a sub-vertical dip. Historical drilling completed alongstrike and across inside 500 metres of a strongly altered volcanicsequence revealed satellite gold-copper mineralization that proves theexpansion potential of the system.
Project Summary:
Location: TheGenex Project is located in the Kamiskotia volcanic belt extendingnorthwest of Timmins. The Project is made of 70 claims, 6 patents and1 partial lease totaling 1,616 hectares with good access. Undergroundworkings including a 84-metre deep shaft and lateral development ontwo levels, were completed between 1964 and 1966.
History: TheKamiskotia area saw significant base metal production during thefifties and sixties, led by the Kam Kotia mine with 6.4 million tonnesof ore produced at a grade of 1.11% Cu and 1.17% Zn 1 . The Genex Projectwas in production between 1966-1967, where it shipped 240 tonnes ofconcentrate at 21.45%-27.25% Cu (No zinc or goldrecovered) 2 . Genex hosts ahistorical resource (non-compliant NI43-101) of 1 Million Tonnes of Copper using a cut-off grade of 1% 2, whichMiddleton calculated in 1975. No gold or zinc values were calculatedin this historical resource. A qualified person for the Companyhas not done sufficient work to classify the historical estimate ascurrent mineral resources or mineral reserves, and the Company is nottreating the historical estimate as current mineral resources ormineral reserves. The Company is disclosing the historical resource asit believes it is relevant. During its due diligence on Genex andprior to entering into the Agreement, the Company also completed theevaluation work described below.
Geology: TheGenex mineralized zones are enclosed in a 500-metre windowcharacterized by a strong hydrothermally altered felsic to maficvolcanic sequence. Known mineralization takes the form of gold –chalcopyrite bearing stringers, impregnated breccia and silica-richstructures. The general trend of the mineralization is nearlynorth-south, possibly controlled by a tight regional folding axis.Recent geochronology data indicate a Blake River ages (2,698 My) forthis portion of the Kamiskotia volcanic sequence, the age, bimodalvolcanism and mineralization styles are similar to those of the HorneMine environment at Noranda 3 .
Evaluation: IEPhas compiled an extensive surface sampling, geophysics and drilldatabase. The Company during due diligence, completed a preliminary 3Dmodel with initial drill targets based on 45,000 metres of historicaldrilling across 112 holes. The drill coverage consists of acombination of clustered short holes concentrated along the 500 metresstrike length. The Genex Project was inproduction between 1966-1967, and was thereaftercovered by 200 metre widely spaced sections drilled down to a maximumdepth of about 700 metres.
A series of three closely related holes drilled by IEPbetween 2017 and 2020 close to Genex historical mineralized zones wereassayed over long sulphide bearing core sections which returnedresults ranging from 1.3 g/t Au Eq to 2.55 g/t Au Eq over a length of26m to 52m starting from surface down vertical depth of 100 metres.This type of metal distribution highlights the near-surface potentialof wide mineralized envelopes. Further modelling should demonstratehow to orient this new mineralization and target extensions throughdrilling.
A summary of selected historical drill results isreported in Table 1:
Drill Hole | From (m) | To (m) | Length (m) 1 | Au Equivalent 2 | Au | Cu | Zn | Ag |
IG-20-21 | 60.65 | 94.5 | 33.85 | 2.26 g/t | 1.14 g/t | 0.45% | 0.58% | |
G17-09 | 40.5 | 79.5 | 39 | 2.15 g/t | 0.20 g/t | 1.17% | 0.14% | |
G17-11 | 42.3 | 94.4 | 52.1 | 1.28 g/t | 0.48 g/t | 0.27% | 0.53% | |
G17-12 | 52.2 | 79.2 | 26.8 | 2.56 g/t | 1.27 g/t | 0.18% | 1.34% | 4.7 g/t |
Incl. | 75.4 | 79.2 | 3.8 | 5.07 g/t | 3.92 g/t | 0.21% | 0.93% | 12.3 g/t |
G17-13 | 14.7 | 20.8 | 6.1 | 4.2 g/t | 0.601 g/t | 2.00% | 0.32% | 16.1 g/t |
Notes:
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True widths of mineralization are not known.
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Gold equivalent grades are based on the following metalprices: gold US$1,950 per oz, zinc US$2.00/lb, copper US$4.50/lb, andsilver US$25.5 per oz. Metal recoveries of 100% are applied in thegold equivalent calculation.
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Gold Equivalent values (AuEq) were calculated using the formula AuEq =(($1950 x Au g/t ÷ 31.104) + ($25.5 x Ag g/t ÷ 31.104) + ($4.5 x %Cu ÷100 x 2204.63) +($2.0 x % Zn ÷100 x 2204.63)) ÷ $1950 x31.104
Terms of the Agreement:
Under the terms of the Agreement, Melkior has a right to earn 100%interest in the Project through two options, subject to a net smelterreturn royalty of up to 2.25% on certain of the claims, by:
Option 1: In order to earn anundivided 50% interest in the Property (the “First Option”),Melkior must make total cash expenditures of $250,000, issue 2,500,000common shares in the capital of Melkior to IEP, incur WorkExpenditures of $2,750,000 and contribute $500,000 in assessmentcredits from Melkior’s Carscallen project, all in accordance withthe anniversary dates in the table below:
Date | Cash | Shares | Work Expenditures | Credits |
20 days from the Effective Date | $50,000 | issuance of 500,000 common shares | NA | $500,000 in assessment credits from Melkior’sCarscallen Project |
On or before the first anniversary of the EffectiveDate* | $50,000 | issuance of 500,000 common shares | $750,000 in aggregate Work Expenditures | NA |
On the second anniversary of the Effective Date* | $50,000 | issuance of 500,000 common shares | $1,750,000 in Cumulative Work Expenditures | IEP is permitted to remove $500,000 in assessmentcredits from the Genex Property during Year 2. |
On the third anniversary of the Effective Date* | $100,000 | issuance of 1,000,000 common shares | $2,750,000 in Cumulative Work Expenditures | IEP is permitted to remove $500,000 in assessmentcredits from the Genex Property during Year 3. |
* The agreement has an Effective Date of May 16,2022 for all anniversary payments.
Option 2: To exercise theOption to acquire an additional 50% interest (the “SecondOption”), for an undivided 100% interest in the Property, Melkiormust within four years after exercising the First Option:
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a) Make a one-time issuance of 2,500,000 incommon shares of Melkior (the “Second Option Payment”) to theOptionor. The Second Option Payment will be paid in common shares ofMelkior.
If the Second Option is not exercised within the applicable four yearperiod to fulfill the Second Option, then a Joint Venture will beformed with 70% interest being held by Melkior and 30% held by IEP. Ifthe Second Option is exercised, then Melkior will own a 100% interestin Genex and IEP will retain a net smelter return royalty of up to 2%calculated as the difference between 2% and any amounts payablepursuant to any existing royalties, of which various portions of theGenex Project have existing royalty interests covering them.
All common shares of Melkior issued under the Agreement will besubject to a hold period of 4 months and one day from the date ofissuance.
Qualified Person
All technical information in this press release has been reviewed andapproved by Peter Caldbick, P.Geo. Mr.Caldbick is a consultant for Melkior and a Qualified Person for thepurposes of National Instrument 43-101.
ON BEHALF OF THE BOARD
Jonathon Deluce, CEO
For more information, pleasecontact:
Melkior Resources Inc.
E-mail: info@melkior.com
Tel: 226-271-5170
The reader is invited to visit Melkior’s web sitewww.melkior.com.
Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the
TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.
Cautionary NoteRegarding Forward-Looking Information
This newsrelease contains statements that constitute “forward-lookinginformation” (collectively, “forward-looking statements”) withinthe meaning of the applicable Canadian securities legislation. Allstatements, other than statements of historical fact, areforward-looking statements and are based on expectations, estimatesand projections as at the date of this news release, and includestatements with respect to the anticipated timing of payments andshare issuances under the Agreement. Any statement that discussespredictions, expectations, beliefs, plans, projections, objectives,assumptions, future events or performance (often but not always usingphrases such as “expects”, or “does not expect”, “isexpected”, “anticipates” or “does not anticipate”,“plans”, “budget”, “scheduled”, “forecasts”,“estimates”, “believes” or “intends” or variations of suchwords and phrases or stating that certain actions, events or results“may” or “could”, “would”, “might” or “will” betaken to occur or be achieved) are not statements of historical factand may be forward-looking statements. Consequently, there can be noassurances that such statements will prove to be accurate and actualresults and future events could differ materially from thoseanticipated in such statements. Except to the extent required byapplicable securities laws and the policies of the TSX VentureExchange, the Company undertakes no obligation to update theseforward-looking statements if management’s beliefs, estimates oropinions, or other factors, should change. Factors that could causefuture results to differ materially from those anticipated in theseforward-looking statements include risks associated with the failureto complete the terms of the Agreement, possible accidents and otherrisks associated with mineral exploration operations, the risk thatthe Company will encounter unanticipated geological factors, thepossibility that the Company may not be able to secure permitting andother governmental clearances necessary to carry out the Company’sexploration plans, the risk that the Company will not be able to raisesufficient funds to carry out its business plans, and the risk ofpolitical uncertainties and regulatory or legal changes that mightinterfere with the Company’s business and prospects.; the businessand operations of the Company; unprecedented market and economic risksassociated with current unprecedented market and economiccircumstances due to the COVID-19 pandemic, as well as those risks anduncertainties identified and reported in the Company's public filingsunder its SEDAR profile at www.sedar.com. Accordingly, readers shouldnot place undue reliance on the forward-looking statements andinformation contained in this news release. Except as required by law,the Company disclaims any intention and assumes no obligation toupdate or revise any forward-looking statements to reflect actualresults, whether as a result of new information, future events,changes in assumptions or changes in factors affecting suchforward-looking statements.
1 Ayerand Hamilton 2019, Report on the 2019 Kamiskotia area Geochronology,Stratigraphy and VMS Potential (Internal Report)
2 Middleton, 1975, Magnetic, Petrochemicaland Geological Survey of Turnbull and Godfrey townships, District ofCochrane; Ontario Division of Mines, Open File Report 5118, 212-221p.
3 Beaudry 2017, JEAP Exploration Report for the Kamiskotia Project(geologyontario.mndm.gov.on.ca)
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