Barkerville Gold Mines Ltd. [BGM-TSXV] on Thursday September 27 announced drilling results from an ongoing exploration program at the company’s flagship Cariboo gold project in central British Columbia.
The company is currently exploring and delineating high-grade vein corridors with four diamond drills on the Cow Mountain area. It said drilling results demonstrate continuity of high grade gold mineralization within vein corridors.
Highlights include 10.70 g/t gold over 5.85 metres and 26.33 g/t gold over 4 metres.
Barkerville shares were active on the news, rising 5.26% or $0.02 to 40 cents on volume of 7.5 million. The 52-week range is 35 cents and 87 cents.
Barkerville President and Chief Executive Officer Chris Lodder said he envisages initial production of 150,000 ounces of gold annually from an operation that might cost between $300 million and $400 million to develop.
Cariboo currently hosts 1.6 million ounces of gold in measured and indicated resources and a further 2.6 million ounces in the inferred resource category. The property’s mineral tenures cover 1,950 km2 along a strike length of 67 km, which includes several past producing placer and hard rock mines.
Measured, indicated and inferred resources at the site are contained in the Cow and Island Mountain deposits, the company has said. The underground mineral resource estimate incorporates the Cow and Valley Zones on Cow Mountain and Shaft Zone and Mosquito Creek on Island Mountain at cut-off grade of 3.0 g/t gold. A mineral resource on Bonanza Ledge and BC Vein is also included, the company said in a press release on May 2, 2018.
The company has said development timetable includes the launching of a feasibility study this year, followed by the launch of a permitting process and possible mine commissioning in 2021.
The ongoing drill program at Cow Mountain is designed to infill and expand high-grade gold mineralized vein corridors modelled in the May 2018 Cow Mountain resource estimate. Vein corridors are defined as a high-density network of mineralized quartz veins within sandstones.
These corridors have been defined from surface to a vertical depth of up to 300 metres and remain open for expansion at depth and down plunge.
Osisko Gold Royalties Ltd. [OR-TSX, NYSE] recently entered into a second restated agreement with Barkerville to acquire another 1.75% net smelter return royalty on top of the 2.25% existing NSR on the Cariboo Project for a total of $20 million. Osisko has a further option to purchase another 1% NSR for $10 million, bringing the total NSR to 5%.
As part of the transaction, Barkerville will grant to Osisko 10 million common share purchase warrants at an exercise price of around $0.75. Following the transaction, Osisko ownership would represent 34.7% of Barkerville common shares.