Less than two weeks after being appointed executive chairman and CEO of Sandy Lake Gold (TSXV: SLAU), Patrick Sheridan has steered the Red Lake-focused junior towards several acquisitions in Guyana.
Sheridan has been credited with the discovery, financing and development of the Aurora gold mine in a remote part of Guyana’s jungle, 170 km southwest of the capital of Georgetown. Guyana Goldfields (TSX: GUY) put the mine into commercial production in January 2016.
Sandy Lake Gold recently signed a non-binding letter of intent (LOI) to acquire a 100% stake in a suite of gold exploration properties in the far southwest of Guyana’s Cuyuni basin, which hosts the Aurora mine and numerous artisanal mine workings. The properties under the LOI include the historic Aremu mine and the Peters mine concessions — two of Guyana’s four historic gold mines.
Sheridan, who was terminated as Guyana Goldfields’ executive chairman at the end of July and resigned his seat on the board at the end of October, declined to comment on Sandy Lake Gold’s LOI in Guyana until after the company receives permission from the TSX Venture Exchange and shareholders for the Aremu transaction.
In a press release on Nov. 22, Sheridan said the acquisition of “historic and advanced-stage properties immediately launches Sandy Lake Gold into the forefront of mineral exploration in Guyana,” and notes that Aremu and the Peters mine “share similar geological settings and history as the Omai mine (3.7 million oz. produced) and the Aurora gold mine.”
Both properties “offer an outstanding opportunity for the discovery and development of high-grade vein type, as well as open-pittable disseminated gold deposits,” Sheridan continues. “As we advance our district-scale Sandy Lake gold project, located in northwestern Ontario, we will continue to aggressively seek additional properties of merit. We are delighted to have this opportunity to build a highly focused and successful exploration company.”
The company also said that it would continue to assess “other properties of merit in the Cuyuni basin, with the intention of making additional acquisitions.”
The Aremu mine produced 6,500 oz. gold from 14,600 tons of mineralized material at a head grade of 0.44 oz. gold per ton between 1906 and 1911. Previous owners sunk a vertical shaft to 52 metres, and there had been 366 metres of horizontal drifting at the 25-metre and 49-metre levels.
The mine consists of veins and workings, including the Aremu Quartz Reef, Power House, Scotland and Donicker veins — all of which are situated along a 4,900-metre east–west trend.
The Peters mine produced over 40,000 oz. gold between 1905 and 1909, with head grades exceeding 1 oz. per ton.
The mine was developed to 91 metres below surface, with most production above 61 metres, and, according to Sandy Lake Gold, was “the most developed and highest grade deposit in Guyana” before the Omai mine was built in 1993.
The Geological Survey of Guyana completed geological mapping, sampling and diamond drilling at the Peters mine in the mid-1960s. The work was sponsored and funded by the United States Geological Survey and the United Nations.
Guyana Goldfields acquired the project in the late 1990s and did limited drilling as operator, and optioned the property to WSR Gold. The work focused on the area around the main shaft and returned historic (not compliant with National Instrument 43-101) assays, including 6 metres of 32.70 grams gold per tonne from 122 metres downhole in hole 1; 5 metres of 13.87 grams gold from 125 metres in hole 7; 53 metres of 5.70 grams gold from 107 metres in 8; and 7.11 grams gold over 40 metres from 11 metres in 18.
Under the LOI, Sandy Lake would likely buy a 100% interest in the various properties by issuing 100 million shares.
Sheridan has an interest in the vendors of the Guyanese properties, which total 104.8 square kilometres.
The mining executive has worked in Guyana for more than 25 years and raised over $400 million for exploration and development projects in the country, Sandy Lake Gold states.
Sheridan served as Guyana Goldfields’ executive chairman from June 2013 to July 2018. The company eliminated the executive chair position on July 30, when Rene Marion was appointed non-executive chairman.
The company said the change was carried out to “streamline the organizational structure” under the leadership of Scott Caldwell, the company’s president and CEO.
In Canada, Sandy Lake Gold controls 421 sq. km of contiguous mineral claim holdings, 225 km north of Red Lake.
A small drill program there in 2014 returned intercepts of 12.86 grams gold over 7 metres and 12.17 grams gold over 6 metres.
The company has also run airborne and ground geophysical surveys over target areas, and in February 2018, signed a 5,000-metre drill contract and mobilized equipment for the project. Sandy Lake Gold is negotiating an exploration agreement with the local First Nation communities.
Over the last year, Sandy Lake Gold has traded in a 52-week range of 4¢ to 12.5¢. At press time it was trading at 8.5¢ per share.
The junior has104 million shares for an $8.86-million market capitalization.