Callaghan takes 25% stake in proposed Blind Creek spin-out

Frank Callaghan, founder and former chairman of Barkerville Gold Mines Ltd. [BGM-TSXV; BGMZF; IWUB-FSE], has acquired a 25% stake in Engineer Gold Mines Ltd., a unit of Blind Creek Resources Ltd. [BCK-TSXV] that is being spun out as a separate company to hold contain certain assets in British Columbia, including the Engineer Gold Mine property near Atlin in the far north of BC.

On January 19, 2018, Blind Creek announced its intention to transfer the Engineer Mine property and the adjoining Gold Hill property, which it acquired from BC Gold Corp. (now Pan Andean Minerals Ltd. [PAD-TSXV]) in early 2017 to Engineer Gold Mines in exchange for common shares of Engineer.

It said the shares would then be distributed to shareholders of Blind Creek.

Blind Creek said the transaction is intended to unlock the potential of the Engineer Gold Mines project, leaving Blind Creek to position itself as a base metals company focused on the advancement of its key Blende mineral property in the Yukon’s Mayo Mining District as well as a zinc/lead exploration property, known as the AB property in the Northwest Territories.

On June 16, 2018, Callaghan announced that he had acquired 5,118,121 shares of Engineer Gold Mines pursuant to a plan of arrangement dated January 19, 2018 between Engineer and Blind Creek. Under the plan of arrangement, Blind Creek transferred the Engineer Mines mineral property to Engineer Gold mines in exchange for 12.8 million shares of Engineer Gold.

These shares were issued to the holders of Blind Creek shares on the basis of one Engineer Gold share for every two Blind Creek shares held on the effective date of the arrangement.

The Engineer Gold Mines Project is a gold/silver project situated 32 km southwest of Atlin, BC and covers 12,032 hectares. Engineer is a former high-grade gold-silver producer. It is estimated that 14,263 tonnes was mined from the site between 1910 and 1952. The majority of production occurred between 1912 and 1927 from eight mine levels.

It is now considered to be an advanced exploration project that hosts a small, but high-grade, inferred mineral resource. Blind Creek commissioned a technical report in compliance with NI 43-101 standards of disclosure dated January 18, 2018.

The technical report includes an inferred resource estimate for the remnant portions of the Engineer and Double Decker veins. At a 5 g/t gold cut-off, the inferred resource estimate is 41,000 tonnes of 19 g/t gold, or 25,000 ounces gold.

At a 25 g/t gold cut-off, the inferred resource is estimated to be 14,000 tonnes of grade 52.5 g/t gold or 23,600 ounces gold.

The technical resort proposes a $6.2 million exploration and development program designed to continue the advancement of the Engineer Gold Mine project. It should be conducted in two phases and focus on mineral resource expansion, metallurgical test-work, and bulk sampling, the report said.

Blind Creek said intends to apply for a listing of the Engineer common shares on the TSX Venture Exchange.