Canada-based Canterra Minerals has agreed to acquire several critical and precious metals projects in central Newfoundland from Buchans Resources, and its subsidiary Buchans Minerals.
Under the terms of the asset purchase agreement, the Canadian mining company will acquire the past-producing Buchans mine, which hosts the Lundberg deposit.
The four other properties include the Bobby’s Pond property, the Tulks Hill property, the Daniel’s Pond Property, and the Tulks South property, which have been optioned to Quadro Resources.
The five properties represent a consolidated indicated mineral resource of 1.4 billion pounds contained zinc and an inferred mineral resource of 317 million pounds contained zinc.
The acquisition will be executed as a cashless transaction, with the consideration comprising 24,910,000 common shares representing around 19.9% of Canterra, at closing.
It also includes 125,500,000 common share purchase warrants of Canterra, which can be exchanged for common shares of Canterra within two years of closing.
The consideration shares and the consideration warrants combinedly represent a total value of around $7.5m based on Canterra’s closing price of $0.05 per share.
The acquisition is expected to be completed in December this year, subject to customary conditions including third-party consents and waivers, and the acceptance by the TSXV.
Canterra president and CEO Chris Pennimpede said: “The exploration opportunities adjacent to one of the world’s highest-grade past-producing VMS mines are exceptional and there has been limited modern exploration despite the extensive exploration database.
“The addition of four resource stage projects establishes Canterra as a major resource and landholder in prolific critical and precious minerals belts and will allow for streamlined exploration and development.
“This is an exceptional area to explore with excellent infrastructure, road-accessible projects and communities that are supportive of mining and economic development.”
The Buchans Mine property is located adjacent to the town of Buchans and covers 82.5km2 of mineral claims and mining leases, including the past-producing Buchans mine.
Buchans mine is a prolific polymetallic massive sulfide mine that was operated by Asarco for more than 50 years, producing zinc and copper concentrate from high-grade ore.
The property also contains the Lundberg deposit, a VMS stockwork deposit that presents a large, near-surface resource of stockwork sulphide mineralisation.
Through the acquisition of Newfoundland properties, the Canadian mining company will expand its already substantial property position in central Newfoundland with an additional 316km2.
Pennimpede added: “Marathon Gold’s development of its nearby Valentine Lake Project and Teck Resources’ past-producing Duck Pond mine both provide a pathway to development, adjacent infrastructure and a trained workforce. We are excited to begin work on the new properties.
“I am also very excited to welcome Michael Power to Canterra’s Board of Directors, and Paul Moore and David Butler to the exploration team as Vice President Exploration and Exploration Manager, respectively.”
