District Copper Corp. [DCOP-TSXV] jumped in active trading Friday morning August 17 , just two days after the company said it has acquired a 13,025-hectare land package known as the Stony Lake East Gold Project in Newfoundland.
The shares were up 57.14% or $0.04 to 11 cents on volume of 3.69 million shares, making District Copper the most actively traded stock on the TSX Venture Exchange on Friday morning. The shares are trading in a 52-week range of $0.05 and 20.5 cents.
In a press release on August 15, 2018, District Copper said the land package was acquired under an agreement with an arm’s length third party, and is contiguous, and on strike with Sokomon Iron Corp.‘s [SIC-TSXV] high-grade, low-sulfidation, epithermal-style Moosehead Gold Project.
Sokoman recentlyÂ said its first drill hole, MH-18-01, at Moosehead returned 11.9 metres of 44.96 g/t gold from 109 to 120.9 metres.
The July 24, 2018 announcement sent Sokoman shares rallying from $0.05 to a high of 50 cents on August 7, 2018. On Friday, Sokoman was trading at 34.5 cents on the heels of news that the company closed a private placement of 20 million units priced at 15 cents per unit, generating $3 million. The company said proceeds of the placement will be used to advance its flagship Moosehead Project where multiple targets remain untested as well as follow up drilling after a successful Phase I program.
District Copper, previously known as Carmax Mining Corp., had been engaged in exploration for porphyry copper-gold-molybdenum deposits in northwestern B.C. prior to the name change. Key assets included a 100% interest in the Eaglehead porphyry project located approximately 40 km east of Dease Lake. First discovered in 1963, the project has since been the focus of several exploration programs completed by various companies.
The Stony Lake East Gold Project is located near Grand Falls-Bishops Falls in central Newfoundland. District Copper said the recent announcement by Sokoman has drawn considerable attention to the gold potential of this area. It is important to note that the area covered by Stony Lake has yet to undergo a thorough geological evaluation as a gold environment despite the numerous gold showings and highly anomalous gold geochemical results within and adjacent to the project area, the company said.
The Stony Lake property is being acquired by District Copper from a B.C. numbered company that will receive 40 million shares of District Copper. These shares will be distributed among the vendor’s six shareholders on a pro-rata basis.
The project is subject to an existing 2% net smelter royalty if the price of gold is US $2,000/oz or less, and 3% if gold trades above that level. As part of the agreement, District Copper has agreed to spend $4 million on exploration at Stony Lake before December 31, 2021. That includes $150,000 in 2018, $1.25 million by the end of next year, and $2.5 million by the end of 2020.