Shares of Copper Lake Resources Ltd. (TSX-V:CPL) are on the move Wednesday morning on news that the Toronto-based exploration company has inked an option agreement pertaining to four gold projects in Northwest Ontario. All four projects, dubbed the Queen Alexandria Gold Property, the Mine Lake Gold Property, the Grand Chibougamau Gold Property and the Centrefire-Redhat Gold-Copper Property, are Greenstone hosted gold targets.
So named because of the green hue of the metamorphic minerals within the mafic rocks, Greenstone belts are known for containing gold and silver, as well as base metals.
Recent prospecting in the area of the projects unearthed grab samples with assays of up to 340 grams per tonne gold. These high-value samples were pulled from the waste dump at the Queen Alexandria shaft from the property. The mine was worked over a century ago and has not been explored with any modern techniques.
While certainly not a guarantee of what lies underground, grab samples can speak to the potential of a property. Copper Lake management, which is currently led by interim CEO and director Terrence McDonald, believes there is the potential for several deposits across the seven claims covering the properties.
All the acquired properties have been explored in some fashion to provide evidence of mineralization, some without modern technologies and others as recently as a few years ago. For example, the Mine Lake Property has three prospects outlined by historic exploration, while Abitibi Mining drilled on a new zone at Centrefire-Redhat Gold-Copper Property in 2011.
To earn 25% interest in the properties, Copper Lake must pay $10,000 and 200,000 shares of CPL upon signing the agreement and another $10,000 and 200,000 shares within four months. To raise the stake to 75%, the company needs to spend a minimum of $2.0 million on the properties over three years and pay another $60,000 and 600,000 shares. For a 100% stake, less a 2% net smelter royalty to the seller, Copper Lake needs to complete a 43-101 compliant resource estimate with 500,000 ounces (we’re assuming of gold or gold equivalent – it wasn’t specifically stated in the press release) and pay another 250,000 shares.
The properties will complement the flagship Marshall Lake Copper Zinc project of Copper Lake, an advanced exploration stage property located 120 kilometers north of Gealdton, Ontario.
A relatively illiquid stock, about 160,000 shares of CPL have changed hands through noon Eastern Time, moving the stock ahead a penny to 7 cents from a close of 6 cents on Tuesday. Shares traded as high as 8 cents in morning action.
