Commander Resources Ltd. [CMD-TSXV; CMDRF-OTC] said Friday October 25 that it has granted Imperial Metals Corp. [III-TSX] an option to earn a 100% interest in a group of claims that are adjacent to Imperials’ Mount Polley copper-gold mine in south-central British Columbia.
The Mount Polley mine is an open pit copper with a mill capacity of approximately 20,000 tonnes per day and is currently on care and maintenance. In January, 2019 Imperial announced that it is suspending operations at Mount Polley due to declining copper prices.
At the time, Imperial said the decision would have no impact to the mine’s ongoing environmental monitoring and remediation program stemming from a tailings dam breach in August, 2014, that released over 21 million cubic metres of water and mine tailings in the surrounding environment and water courses.
According to B.C.’s Chief Inspector of Mines, the spill was due to a structural failure of the Mount Polley tailings storage facility perimeter embankment.
The option agreement announced on Friday encompasses 3,331 hectares, all 100%-owned by Commander except for 648 hectares that is held 90% by Commander and 10% by an arms-length company. The claims lie adjacent to the north and east of the Mount Polley mine.
Imperial can exercise the option to acquire a 100% interest in the property by making cash payments of $250,000, including $50,000 on signing, $100,000 on or before December 31, 2021 and another $100,000 on or before December 31, 2022. The proceeds will be split between Commander and the arms-length private company on a 90% and 10% basis respectively.
A production royalty of $1.25 per tonne-milled will be due to the optionors.
Commander Resources is a Canada-focused exploration company that is following the prospector generator business model that has leveraged its success in exploration through partnerships and the sale of properties, while retaining equity and royalty interests.
The company has a portfolio of base and precious metal projects across Canada and significant equity positions in Maritime Resources Corp. [MAE-TSXV] and Aston Bay Holdings Ltd. [BAY-TSXV]. It also has two active partnerships with Fjordland Exploration Inc. [FEX-TSXV], and High Power Exploration (HPX) on its South Voisey’s Bay nickel project in Labrador and with Freeport-McMoran Inc. [FCX-NYSE] on its Burn copper/gold project in British Columbia. HPX is a private company headed by billionaire mine financier Robert Friedland.
“This agreement is a significant milestone for Commander as we continue to execute on the Prospector Generator model,” said Commander President and CEO Robert Cameron. “This highly prospective, near-mine land package has the potential to host satellite deposits which may add an additional royalty to our portfolio which includes an existing and similar royalty that Commander currently has over a portion of the Boundary Zone at the Mount Polley mine,” he said.
As a result, Commander will now have three active earn-in agreements its projects in Labrador and British Columbia.
Commander shares were unchanged Friday at 6.5 cents and traded in a 52-week range of 6.5 cents and 11 cents.