Provenance Gold Corp. [PAU-CSE] executed a definitive share purchase agreement to acquire all of the outstanding share capital of Cariboo Gold Producers Inc.
Cariboo Gold controls the rights to the Mineral Hill silver property, located in Lander County, Nevada, south of the town of Carlin. The property consists of nine patented claims, 160 acres of private homestead lands and 20 unpatented claims for a total of 540 acres.
According to a historic county geological report silver ore was first mined in 1868 at an initial reported grade of 140 oz/ton silver (4,350 g/t). Mining continued until 1939, with reported grades of 25 oz/ton (780 g/t). Limited exploration was conducted by Union Carbide in the mid-1960s and Santa Fe Minerals in 1980 to 1982. That exploration was largely on the unmineralized Vinini formation footwall of the mineral system. The property has laid idle since then because Nevada exploration companies focused on gold instead of bulk minable silver.
Mineralization occurs adjacent to the thrust and as karst replacement bodies in the limestone. Surface samples from bedrock exposures have returned values of silver ranging from 50 to 1,215 g/t and gold values ranging from 0.1 to 5.2 g/t.
The property has strong potential to host significant new ore bodies along the thrust fault zone, and potentially may host shallow bulk-tonnage resources amenable to modern open-pit mining. Upcoming initial exploration work will focus on sampling and mapping the old workings and the extensions of the mineral system beyond the historic production areas.
The terms of the acquisition consist of issuing 3 million shares of Provenance for all the shares of Cariboo Gold and a one-time cash payment of $20,000. The company is at arm’s-length from Cariboo Gold and each of its shareholders.
The underlying property agreement has progressive payments over six years, totalling a cumulative $195,000, plus escalating work commitments over eight years.
“We now have three excellent Nevada properties, and believe each has the potential to become a very significant new discovery. We are working swiftly to advance our properties, with Silver Bow having been initially drilled and awaiting assays, and initial drilling at White Rock planned to begin in May,” stated Rauno Perttu, Provenance’s CEO.