Metals Creek options Newmont Goldcorp project

Dam C at North End of Tailings Pond

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Metals Creek Resources Corp. [MEK-TSXV] has signed an option deal with Goldcorp Canada Ltd., a Canadian unit of Newmont Goldcorp Corp., [NGT-TSX, NEM-NYSE] which gives Metals Creek the option to earn a 100% interest in Goldcorp Canada’s Dona Lake Mine property.

Metals Creek shares advanced on the news, rising 11.11% or $0.005 to $0.05 on active volume of 1.2 million. The shares trade in a 52-week range of $0.03 and 10.5 cents.

The property consists of 32 patented and leased mining claims, covering 430 hectares, including the past-producing Dona Lake mine. It is located in the Pickle Lake mining district, about nine kilometres southeast of Pickle Lake, northwestern Ontario.

Dona Lake was an underground operation, which produced 246,500 ounces of gold at a grade of 7.44 grams per tonne from 1989 to 1994. When the mine closed in 1994, gold was trading at around US$383.23 an ounce. On Wednesday, gold was trading at US$1,338 an ounce.

Dona Lake is just one of several historic mines which are located on the Pickle Lake Greenstone Belt.

The option agreement announced on Wednesday allows Metals Creek to earn 100% of Goldcorp’s interest in the property by issuing 7.0 million shares to Goldcorp. Metals Creek must also fund $4 million in exploration costs over 36 months.

Metals Creek has agreed to meet that obligation by issuing 500,000 shares within five days of a definitive agreement and TSX approval. It must also spend $500,000 prior to the first anniversary of the start date.

The junior must also issue 1.5 million shares on or before the first anniversary of the start date and spend an additional $1 million prior to the second anniversary of the start date. Metals Creek has committed to complete 2,500 metres of drilling within that time frame.

Prior to the second anniversary, Metals Creek must issue two million shares. It is also required to spend an additional $2.5 million on exploration, including 10,000 metres of drilling prior to the third anniversary.

Metals Creek must issue another 3.0 million shares before the third anniversary of the start date.

After vesting, Newmont Goldcorp will have a one-time option to elect to earn back 51% of the property by spending $4 million on exploration over the following 24 months.

Metals Creek also has a 50/50 joint venture deal with Goldcorp Canada and Newmont Goldcorp on the Ogden Gold Property, near Timmins, Ontario. It covers over eight kilometres of strike length on the fabled Porcupine-Destor Break. Gold production to the east of the Metals Creek property has exceeded 22 million ounces from a number of mines, including Newmont Goldcorp.’s Dome Mine, which has produced in excess of 17 million ounces.


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