Huntington Exploration Inc. [HEI-TSXV] has signed a letter of intent to acquire a 100% interest in Lago De Oro SA de CV, a wholly-owned Mexican subsidiary of the Delaware-based Lago de Oro LLP.
Lago De Oro holds title to the 537-square kilometre El Grande exploration property, which is located near the town of Acaponeta in the state of Nayarit, Mexico, approximately 150 kilometres southwest of the resort city of Mazatlan.
The El Grande property is located in the southern portion of the 700-kilometre Sierra Madre metallogenic province that hosts significant gold, silver, and base-metal deposits and producing mines.
The project covers large areas of altered volcanic rocks, and is being targeted for its copper, gold, and silver potential. Huntington said it will initiate a regional exploration program once the transaction closes, likely at the end of November, 2021.
Subject to TSX Venture Exchange approval and the completion of due diligence, Huntington has agreed to make the following payments to Lago de Oro. They include US$500,000 cash, 4.0 million shares, and a net smelter return capped at 2.0%.
Huntington will also deliver milestone payments of two shares per ounce of gold equivalent precious metal that is added to a geologically modelled resource from one or more deposits within El Grande, which are, in turn, contained within a pit or stope constrained mine model.
The first issuance will be made after an initial threshold of 500,000 gold equivalent ounces is modelled in an independent resource estimate.
Huntington is a Calgary-based mineral exploration company with a focus on the Red Lake geological district in northwestern Ontario.
Huntington’s project portfolio includes the Quartz Lake property, which Huntington acquired in several strategic acquisitions in early 2021. The project covers and strategically located near evolving discoveries.
Quartz Lake is contiguous, for example, with Great Bear Resources Ltd.’s [GBR-TSXV] Red Lake North project, Prosper Gold Corp.’s [PGX-TSXV], Golden Sidewalk project and Cross River Ventures Corp.’s [CRVC-CSE, C6R-FWB] Dent-Jackson project.
The Quartz Lake property contains 29 mineral showings with notable results including a drill intercept of 63.5 g/t over 0.7 metres at Surprise Lake northwest. Other highlights include 30.6 g/t gold over 1.3 metres from a channel sample at the Heine showing.
Huntington’s other key asset is the Winora Project, which is located 325 kilometres north of Red Lake. In May, 2021, the junior said it had signed a letter of intent to acquire a 100% interest in the project for 4.0 million shares and a 2% net smelter royalty.
Winora is located approximately 500 metres from the eastern edge of defined gold mineralization at Signature Resources Ltd.’s [SGU-TSXV, SGGTF-OTCQB, 3S3-FSE] Lingman Lake gold project, which hosts a gold mine that never reached commercial production and a historical resource of 234,000 ounces. Signature has said it hopes to announce a maiden NI 43-101-compliant resource next year.
On October 5, 2021, Huntington shares closed at 20 cents and trade in a 52-week range of 36 cents and $0.06.