Kootenay Silver Inc. [KTN-TSXV; KOOYF-OTC] has signed an option agreement with a wholly-owned subsidiary of Centerra Gold Inc. [CG-TSX], whereby Centerra is granted an option to earn a 70% interest in the Two Times Fred property located in the Nechako Plateau of central British Columbia.
A total of C$6 million in exploration expenditures and C$500,000 in cash payments must be incurred and made over a four-year period for Centerra to earn a 70% interest. The first year requires a work expenditure of $1 million with a minimum commitment of $650,000. Current plans for this year’s work include up to 1,000 metres of trenching and 20 drill holes. Upon the fulfillment of these conditions, the two companies will enter a standard joint venture agreement with Kootenay retaining a 30% interest, and funding of further work will be done on a pro rata basis amongst the joint venture partners.
James McDonald President and CEO of Kootenay Silver states: “We are very pleased to have signed an agreement with major gold producer Centerra Gold Inc. We look forward to benefiting from Centerra’s expertise and consider their participation via the option agreement a reflection of our belief that Two Times Fred has the potential to host a gold deposit of significant size.”
The Two Times Fred property is host to a large classic low-sulphidation epithermal gold vein system. It is a grass roots discovery made by the Kootenay Silver team. Over the past several years Kootenay has advanced the project with limited drilling, mapping, sampling, and geophysical surveys.
The project comprises numerous northeast trending veins over a 1.5 by 3.0-kilometre trend. Select rock chip sampling at surface has returned assays as high as 12.8 g/t gold and 194 gpt silver. Limited drilling (2,628 metres over 13 drill holes) shows the main identified veins occur as classic vein and vein breccia zones from a few metres to 40 metres wide. Best drill results to date include 7.6 metres of 1.69 g/t gold and 29 g/t silver.