Sun Metals Corp. [SUNM-TSXV] shares were active Tuesday August 13 after the company released drill results from its Stardust polymetallic project in north-central British Columbia.
Diamond drilling at Stardust was initiated in May 2019 with two drills. To date, the drills have completed 5,220 metres over 11 drill holes and drill holes 12 and 13 are in progress. The primary aim is to explore around the mineralization identified in drill hole DDH18-SD-421, which last year returned a 100-metre interval of 2.51% copper, 3.03 g/t gold and 52.5 g/t silver. This equates to a 5.05% copper equivalent or an 8.00 g/t gold equivalent.
The company said the latest results are from step-out drilling in the 421 zone. It said the first three holes have all intersected significant copper and gold mineralization. Highlights include drill hole DDH19-SD-428D, which returned 142.35 metres of 1.22% copper, 1.28 g/t gold, 21.8 g/t silver and 0.41% zinc. In metal equivalent terms, this polymetallic interval is 2.39% copper equivalent or 3.83 g/t gold equivalent.
The company said there were several higher-grade intervals within the same zone, including 32.20 metres of 5.06% copper equivalent or 8.09 g/t gold equivalent and another 14.10 metres grading 6.72% copper equivalent or 10.76 g/t gold equivalent.
Sun Metals shares advanced on the news, rising 1.96% or $0.01 to 52 cents on active volume of 1.32 million. The shares are trading in a 52-week range of 12.5 cents and 65 cents.
The Stardust Project is located approximately 150 km north of Fort St James, and ranks as the company’s flagship project.
The property is host to at least one mineralized carbonate replacement system identified as the Canyon Creek copper-gold deposit. Stardust boasts a rich exploration history, dating back to 1941, the company has said.
Carbon Replacement Deposits (CRD) are epigenetic, intrusion-related, high temperature sulfide-dominant lead-zinc-silver-copper-gold rich deposits that typically range from lenticular or podiform bodies referred to as chimneys and/or mantos, depending on their orientation.
Limestone, dolomite and dolomitized limestone are the major host rocks. Ores grade outward from sulfide-rich skarns associated with unmineralized or porphyry-type intrusive bodies to essentially 100% polymetallic massive sulfide bodies.
Under a September 2017 agreement with Lorraine Copper Corp., Sun Metals is currently earning a 100% interest in the project by spending $6 million on the project by December 31, 2021. At that point, Sun Metals must issue sufficient shares (to a maximum of 51.9 million) to Lorraine Copper, such that Lorraine will own a 30% interest in Sun.
Under the deal, Lorraine Copper will also retain a 2% net smelter return royalty (NSR) on precious metals and a 1% NSR on base metals. Sun has the option to reacquire 50% of each royalty via a payment of $1.5 million per royalty.
Sun Metals is backed by Teck Resources Ltd. [TECK.B-TSX; TECK-NYSE], which recently spent $3.5 million to acquire a 13.8% stake in the junior. Teck acquired the interest by picking up 12.5 million common shares of Sun Metals at 28 cents per share. The shares were acquired privately on December 20, 2018, under a donation arrangement. Prior to the completion of the acquisition, Teck did not hold any shares in Sun Metals.
“The initial step-out drilling was very important to establish the continuity of this recently discovered mineralization in the 421 zone,” said Sun Metals President and CEO Steve Robertson in a press release on Tuesday. “It is particularly encouraging to see the continued strong precious metals content within this skarn altered zone,” he said. “The gold content makes this discovery even more captivating.”