Kerr Mines Inc. [KER-TSX, KERMF-OTC, 7AZ1-FRA] said Monday it has agreed to sell its remaining properties in Northern Ontario to a unit of Orefinders Resources Inc. [ORX-TSXV, OTC-ORFD] in a move that will allow Kerr to focus on its Copperstone Mine in Arizona.
Orefinders shares rallied on the news, rising 7.69% or $0.005 to 7 cents.
Under the agreement, Kerr has divested all of its interest in the McGarry mine, and Barber-Larder properties to McGarry-Larder Mines Inc., a wholly-owned subsidiary of Orefinders. In return Kerr will receive approximately 9% of Orefinders’ outstanding shares. In addition, Kerr will receive 440,248 common shares of Powerore Inc., a battery-metal focused company that was recently set up to acquire Orefinders’ silver-cobalt assets, comprised of the Mann Mines and MacMurchy properties.
The properties are located in the Cobalt-Gowganda District of Ontario, and form part of Orefinders’ plan to create a pure play battery metals company.
“The sale of the McGarry asssets for common shares in Orefinders is an excellent value-creating opportunity for Kerr Mines shareholders,” said Claudio Ciavarella, CEO of Kerr Mines. “The McGarry assets in Northern Ontario fit with Orefinders’ plans of developing assets in the Abitibi and will unlock value for Kerr shareholders,’’ he said.
“The centrepiece of our strategic growth vision is focusing our resources on our core asset, the Copperstone mine in Arizona, and creating shareholder value through the advancement of this project.”
The Copperstone Mine produced nearly 500,000 ounces of gold between 1987 and 1993 from an open pit operation. Significant remaining infrastructure from that period includes offices, maintenance shops laboratory building, permitted tailings facility, processing facility and mill.
The mine is located in La Paz County, Western Arizona, within the Walker Lane mineral belt. The property is accessible from Pheonix on Interstate 10 to Quartzsite and from Quartzsite on Route 95.
Gold in the area is commonly associated with hematite, chlorite, quartz, manganese oxide and copper oxide mineralization. In the case of Copperstone, the gold is not encapsulated in sulphides or silica, and the ores do not contain active carbon. This means the ores at Copperstone are not refractory.
Kerr recently announced the results of an independent pre-feasibility study and resource update for its past-producing Copperstone Mine in Arizona. The resource update is in compliance with National Instrument 43-101 standards of disclosure.
Highlights from the pre-feasibility study, include average annual sales of 38,347 ounces of gold, initial capital of $22.7 million, and all-in sustaining cost of US$875 per gold ounce. The project hosts 175,093 ounces of contained gold in the proven and probable category.
Shares of Kerr Mines eased 5.56% or $0.01 to 17 cents on Monday. The 52-week range is 41 cents and 17 cents.