BTU Metals Corp. [BTU-TSXV] soared in active trading Friday August 24 after the company said it had picked up ground adjacent to Great Bear Resources Corp.’s [GBR-TSXV] Dixie Lake Project in the Red Lake, mining district of northern Ontario.
BTU said it has acquired 10 claims, covering 1,514 hectares adjoining the northern and eastern boundaries of the Dixie Lake Project, where Great Bear recently reported a high-grade gold discovery in drill core assaying 26.91 g/t gold over 16.35 metres and 44.47 g/t gold over 7.0 metres in two holes on the Hinge Zone.
On Friday, Great Bear said Rob McEwen and McEwen Mining Inc. [MUX-TSX, NYSE] will collectively own 18.8% of Great Bear on a partially diluted basis through their joint participation in a private placement financing that is expected to raise $10 million.
BTU leapt on the news, soaring 157.14% or $0.055 to 9 cents on volume of 5.1 million shares. The stock had previously traded in a 52-week range of 3.5 cents and 24 cents. BTU was among the most actively traded stocks on the TSX Venture Exchange early Friday.
“We are pleased to acquire this strategic property around an exciting new gold discovery in an established mining district,” said BTU President Mike England. “The company’s management and consultants have extensive experience in this area of Ontario and this type of gold system. That, along with excellent logistics, will allow the company to fast-track the property to the drill stage,” he said.
BTU is acquiring a 100% interest in the claims comprising the Dixie Lake Halo property from an arms-length party through payments of $85,000 in cash and a share issuance of 750,000 shares over a four-year period. The vendor retains a 1.5% net smelter royalty, half of which can be purchased by BTU for $500,000 at any time.
BTU Metals is a Canadian junior exploration company focused on developing its Galway Gold project in Ireland and the Shakespeare Gold project in Ontario.
The Galway Project, located 45 km northwest of the city of Galway, has been targeted for orogenic and low-sulphidation mineralization. The Shakespeare property is located in the Sudbury Mining Division and hosts the historic Shakespeare Gold Mine, which produced 2,598 ounces of gold between 1905 and 1948.
BTU said the Dixie Halo property wraps around the northeastern and eastern portions of Great Bear’s Dixie Project. The northwestern portion of the Dixie Halo property is approximately 2.3 km northeast of Great Bear’s North West step-out target and approximately 4.5 km northeast of the Hinge Zone.
Portions of the Dixie Lake property were actively explored as recently as 2008 with two drill holes located within 250 metres of the Dixie Halo property boundary. “A complete review of the assessment files will be initiated immediately,” BTU said in a press release.
The company went on to say that the property has excellent logistics and is cut by Ontario provincial highway 105.