Aguila Copper (TSXV: AGL) shares soared on Tuesday after it announced a deal with a private company in British Columbia to secure 90 per cent of 28 mining rights and a mineral lease in the Sherridon mine in west-central Manitoba, covering a total area of 4968 hectares.
Sherridon is one of Canada's famous volcanic hosting large-scale sulphide (VHMS) mining camps, located 65 km northeast of the Flin Flon mining / metallurgical complex, connected by a 78 km all-weather road. The station is served by railways, power lines and Sherridon/Cold Lake small communities, the company said in a press release.
Sherridon's Sherritt Gordon deposit was mined between 1931 and 1951, during which 7.74 million tons were mined, with an average grade of 2.46 per cent copper, 2.84 per cent zinc, 0.6g / tonne gold and 33g / tonne silver. Aguila said that a series of companies subsequently completed exploration in the area and discovered a number of massive sulphide deposits, usually related to main strata similar to Sherritt Gordon.
Exploration activity peaked between November 2006 and July 2010, including drilling 159 holes and estimating near-surface indicative and inferred mineral resources. After the resource calculation, the project completed additional filling and drilling along the strike. No exploration activity has been recorded since November 2012.
The condition is that Aguila pays C $15000 in cash and issues 100000 full shares of the Company to the seller within six months after the closing of the transaction and undertakes C $100000 in exploration expenses before the first anniversary of the closing of the transaction. Aguila will assume an additional C $900000 in exploration expenses before the fourth anniversary, resulting in an 80 per cent interest in the property and an additional C $1 million in exploration expenses by the seventh year, resulting in an additional 10 per cent interest (for a total of 90 per cent).
Aguila and the seller will form a joint venture that can then fund project expenses or convert their interests into a 1.5 per cent net smelter's equity, which Aguila can buy at any time at C $2 million.
"the Sherridon mine is a strategic acquisition of Aguila in conjunction with our US portfolio," CEO Mark Saxon said in a press release.
"our focus in 2021 is to identify copper-rich projects with attractive geological styles in areas that support mining," Saxon said. VHMS-style deposits are one of the largest producers of copper, zinc and gold in the world, including world-class deposits such as Neves Corvo, Kidd Creek and Bathurst camps.
We are pleased to have this opportunity to play a role in the energy transformation with high-quality copper assets close to existing mining and processing infrastructure.
Aguila shares were up 30 per cent as of Tuesday's close on the Toronto stock exchange. The stock is traded more than 30000 times, three times the average daily volume, and the company has a capital of C $6.2 million.
