Sun Metals (TSXV: SUNM; US-OTC: SMTTF) has announced the final results from its 15,000-metre, 2018 drill program at its Stardust polymetallic project in north-central British Columbia.
Notable intercepts from the carbonate-replacement deposit include: 1.72% copper, 0.93 gram gold per tonne and 29.1 grams silver per tonne over 5 metres from 232 metres downhole, 1 metre grading 0.59 gram gold, 382.8 grams silver and 21.22% zinc from 63 metres downhole, and 4.6 metres grading 4.17 grams gold, 34.5 grams silver and 1.6% zinc from 56 metres downhole.
“Our goal was to explore the proximal part of the system and see if we could get into an area where there was a good fluid flow path that could lead to larger bodies of more continuous mineralization to give us more tonnage,” Sun Metals president and CEO Steve Robertson says in an interview with The Northern Miner.
“We hit a home run with our first at-bat. Hole 421 was clearly head and shoulders above any intercept that has ever been seen on the property before, and quite frankly, we’re viewing this as a disruptive discovery.”
The company reported assays for hole 421 in November 2018. The hole cut 100 metres grading 2.51% copper, 3.03 grams gold and 52.5 grams silver from 517 metres downhole. The company says that hole indicates a possible extension of its Canyon Creek Skarn zone.
“I don’t think anyone was expecting to find the highest-grade gold mine in the world at Eskay Creek when they found it in northern British Columbia. Nobody was expecting that Chuck Fipke was going to find a diamond mine when he was scoring for diamonds in the Northwest Territories, and here we are with 100 metres of 5% copper equivalent in a carbonate-replacement system in northern B.C., where nobody would have expected that you’d actually find one,” Robertson says.
“It changes our thoughts about what the potential is. We’re thinking of a much bigger scale system now, and I really believe that this is going to change the way that people think about carbonate-replacement systems in British Columbia, as well.”
The company says the intercept may indicate a “major mineralized pathway” that leads to the heart of a high-grade system. Following up on hole 421, which lies outside the project’s current resource, is one of the company’s top priorities in 2019.
The company tabled an updated resource, limited to the project’s Canyon Creek Skarn zone in January 2018. The project has 985,000 indicated tonnes grading 1.34% copper, 1.59 grams gold and 36.8 grams silver, as well as 1.99 million inferred tonnes at 1.24% copper, 1.72 grams gold and 30.5 grams silver.
Sun Metals based the resource on historic drilling at the project. It expects to table an updated resource estimate after its 2019 drill campaign.
Since the 1940s, various operators have spent $25 million at Stardust, drilling 80,000 metres across 405 holes, collecting 5,800 soil samples and taking 425 line km of magnetic surveys and 390 line km of very low frequency surveys.
The project’s 2.2 km northwestern mineralized corridor includes four mineralization styles, with all its zones open for expansion. The project is next to Serengeti Resources’ (TSXV: SIR; US-OTC: SGRNF) Kwanika Creek copper project on the Pinchi Fault, 250 km northwest of Prince George, British Columbia.
Sun Metals recently closed a $5.2-million private placement. Teck Resources (TSX: TECK.B; NYSE: TECK) received 12.5 million Sun Metals shares after investing $3.5 million, and now owns 13.8% of the company.
“We’re really excited that we’ve been able to get the financing lined up for 2019, but also attract a major, credible player in the industry,” Robertson says.
The property is under option from Lorraine Copper (TSXV: LLC; US-OTC: LRCPF). Sun Metals will spend $6 million on the property by the end of 2021 to earn a 100% interest in the project.
The companies amended the earn-in agreement in late 2018, fixing the number of shares Sun Metals would have to pay Lorraine Copper to 500,000 at the end of 2018, and just over 31.5 million by early April 2019. Under the previous agreement, Lorraine Copper would have owned 30% of Sun Metals after Sun Metals completed its earn-in.
“We’ve fixed the amount of shares that we’ll be issuing on earn-in so that we could go ahead and do that financing without any further dilution down the road,” Robertson says, “but at the same time gave them more confidence that we’re going to complete the earn-in.”
Shares of Sun Metals are trading at 32¢ in a 52-week range of 12¢ to 40¢. The company has a $25-million market capitalization.