After completing more than 10,300 metres of drilling in the past year at its Shining Tree gold project in northeastern Ontario, Montreal-based Creso Exploration (CXT-V) has signed a binding letter agreement for a joint venture with the well-known Hunter Dickinson group. The deal could result in the Vancouver-based minefinders spending up to $41 million on exploration there in stages over five years.
Hunter Dickinson can earn up to a 69.95% interest in the main group of claims comprising Creso’s Shining Tree project, located in Ontario’s Shining Tree district approximately 87 km south of Timmins and 85 km southwest of Kirkland Lake. The agreement is subject to the completion of due diligence, to be carried out within 60 days.
Hunter Dickinson will also subscribe for $2-million worth of Creso shares in private placements over four years. The initial placement will consist of one million units at 50 cents, which includes a full warrant exercisable at 65 cents for two years.
Creso says its 280-sq.-km collection of Shining Tree properties represents a “district-wide exploration play for deep-rooted alkalic gold hydrothermal systems,” centered around the historic Minto deposit.
Minto was first explored by Noranda Mines in 1936, which proceeded to outline a very small, high-grade resource in a more or less circular breccia pipe. The project then lay dormant for close to 50 years before Duncan Gold Resources took another look at it in 1982, delineating a historic, non-National Instrument 43-101-compliant resource of 204,000 tonnes grading 6.8 grams gold per tonne to a vertical depth of 225 metres.
Creso now says Minto consists of a pod of carbonate sulphide breccias associated with quartz veining and disseminated pyrite. Following up on a series of deep-penetrating geophysical surveys, the company’s 2009 and 2010 drilling campaigns found new zones of high-grade mineralization at depth. Assays from the company’s first hole in August 2010 (it listed on the TSX Venture Exchange in June 2010) returned a remarkable 82.5 metres of 13.3 grams gold starting at a depth of 508 metres.
The results shot Creso’s stock up from 30¢ to a high of $1.19 by October, however assays from succeeding holes have returned much lower grades and the stock has gradually slid down to 42.5¢. Subsequent assays have included 8 metres of 8.8 grams gold per tonne within a larger intersection of 280 metres grading 1.15 grams gold starting from a depth of 536 metres.
Creso’s chairman, Pierre Gauthier, a formerly high-flying Montreal promoter with a past, had this to say about the JV agreement in a recent press release: “We are looking forward to working with Hunter Dickinson’s very capable group to establish economic viability on one or more properties on Creso’s holdings. The Creso team is extremely happy to see its work come to fruition with a more assured development plan for the future through this option agreement.”
Hunter Dickinson will now take over as operator of the project, and all exploration and development decisions will be done by a management committee made up of three representatives of Hunter Dickinson and two representatives of Creso.
The JV partners will further explore more than 35 known gold occurrences at Shining Tree, including seven historical mining shafts. Besides the central Minto deposit, other main targets will be the past-producing Tyranite and Matona mines, the Duggan zone, the Porphyry Lake zone and the Indian Lake zone.
Hunter Dickinson is required to spend $16 million on exploration and development over the first three years to earn an initial 50.95% interest, and another $25 million over the next two years (or deliver a feasibility study) for an additional 19% interest.
Other public companies affiliated with the Hunter Dickinson Group include British Colombia copper miner Taseko Resources (TKO-T, TGB-N), Alaska gold-copper explorer Northern Dynasty Minerals (NDM-T, NAK-N) and Arizona copper explorer Curis Resources (CUV-V).
News of the JV agreement on April 29 helped Creso close up 4.5¢ to 42.5¢ on 699,000 shares traded.