Newrange Gold Corp. [NRG-TSXV] has signed an option deal to earn a 100% interest in a gold property in the Red Lake mining district of northwestern Ontario from Aurcrest Gold Inc. [AGO-TSXV].
Aurcrest jumped 33% or $0.01 to $0.04 on volume of 300,000, Tuesday. The shares trade in a 52-week range of $0.01 and $0.045.
The Western Fold property consists of approximately 2,300 hectares in the Birch-Uchi greenstone belt and is located approximately 12 kilometres north west of First Mining Gold Corp.’s [FF-TSX, FFMGF-OTCQX, FMG-Frankfurt] Springpole gold deposit (4.67 million ounces of indicated material).
The Western Fold property contains a magnetic signature that is indicative of a strongly folded iron formation similar to the one that hosts Newmont Goldcorp Corp’s, [NGT-TSX, NEM-NYSE] Musselwhite gold mine in northwestern Ontario. Although the Western Fold iron formation has never been drill-tested, this geological setting is considered to be highly prospective for gold mineralization.
“Iron formation gold deposits are known around the world as a subset of Precambrian gold deposits,” said Newrange CEO Robert Archer. “Having worked at the Musselwhite mine and the Tucano gold mine in Brazil (Great Panther Mining Ltd. [GPR-TSX, GPL-NYSE American]), I am personally familiar with this geological model,” he said.
Archer said Newrange President Robert Carrington is familiar with the Springpole deposit from his tenure as CEO with Gold Canyon before the company was purchased by First Mining.
“As such, we are no strangers to Northwestern Ontario, which is enjoying a resurgence of exploration success,’’ Archer said. “We see the Western Fold property option as a low-cost and potentially high-reward opportunity for the company while we continue to advance our flagship Pamlico project [in Nevada].”
The terms of the agreement allow Newrange to earn a 100% stake in the project in return for cash payments of $200,000 and the issuance of one million shares over two years. The agreement is subject to a 2.0% NSR royalty, half of which can be purchased for $1 million.
On Tuesday, Newrange shares were unchanged at 13 cents and trade in a 52-week range of 10.5 cents
Prior to Tuesday’s Red Lake announcement, Newrange had been focused on its Pamlico gold project, which is located about 20 kilometres southeast of Hawthorne, along U.S. Highway 95. The project covers the historic Pamlico group of mines as well as the nearby Good Hope, Gold Bar and Sunset mines.
Exploration to date has been insufficient to define a mineral resource that would meet National Instrument 43-101 standards of disclosure. However, hopes that this could soon change is based on Pamlico’s location and previous history.
Drilling by previous operators and owners intersected very high-grade mineralization. One drill hole intersected 4.6 metres, grading 239.7 grams per tonne gold, and included 0.8 metres assaying 702.5 grams per tonne in an area called the Merritt Zone.
But due to the fact that the property had previously been in private hands since 1898, it remains underexplored in terms of modern exploration techniques.
In a December 16, 2019 press release, Newrange said it had launched an Induced Polarization (IP) geophysical survey at Pamlico. “We are pleased to have started the IP survey in an attempt to better define the trend of gold mineralization at Pamlico,” Archer said in the release.
He said the IP will hopefully help to detect fluid pathways and buried sulfide concentrations, generating drill targets for subsequent follow up.
Newrange recently raised $1.05 million from a non-brokered private placement of 10.5 million shares priced at 10 cents each. It said proceeds would be used to advance the Pamlico Project. It is expected that a second and final tranche of approximately $450,000 should be completed January, 2020, the company said.