TORONTO, April 3, 2018 /CNW/ - Orefinders Resources
Inc. ("Orefinders" or the "Company") (TSX.V: ORX) is pleased to
announce that it has entered into a definitive agreement to acquire
a 100% interest the McGarry Mine and Barber-Larder Properties
(collectively "McGarry") from Kerr Mines Inc. ("Kerr"), formerly
known as Armistice Resources Ltd.
"We are very pleased to announce this acquisition and see this
transaction as excellent value for our shareholders. We were able
to negotiate favourable terms with Kerr as they believe in
Orefinders' vision and strategy to acquire established resources
within the Abitibi while focussing on shareholder value with
minimal dilution. McGarry's combination of its existing resources,
its proximity to major mines (the Kerr-Addison Mine) and orebodies,
its mine infrastructure, ease of access and its significant
exploration upside opportunity make this a highly accretive
transaction for shareholders. McGarry fits right in line with our
Mirado Mine and Knight projects, all of which are in the Abitibi,
have known resources, former production, significant resource
expansion potential and access to infrastructure. We like to
take advantage of work that's been done in the past, then apply our
geologic understanding and approach designed to ultimately define
larger and new orebodies. This model has proven quite effective
with Cote Lake, Canadian Malartic, Detour and Sigma-Lamaque, which
were all former producers in great jurisdictions that had new life
breathed into them by a reinvigorated geological process and
investment. Orefinders now owns three such assets, all within a
tight radius of each other," said Stephen
Stewart, Orefinders CEO.
About McGarry
The McGarry property is in Virginiatown, Ontario within the Abitibi
Greenstone Belt and spans 2.4km on one of the world's most prolific
gold structures, the Cadillac Larder-Lake Break. The property
encompasses 681 hectares and is comprised of 46 Patented Mining
Claims and 5 Mining Licenses.
McGarry hosts a NI43-101 indicated resource of 123,000 oz at an
average grade of 7.7g/t gold (uncut or 112,000 ounces with grades
top-cut to 51.4 gpt), and an additional inferred resource of 30,000
oz. at an average grade of 5.3 g/t (uncut or 29,000 ounces with
grades top-cut to 51.4 gpt) as per McGarry resource estimate from
2009 (see cautionary note at the end). McGarry also has a NI
43-101 Preliminary Economic Assessment, published in 2011, which is
based off McGarry's 2009 resource estimate.
McGarry is located east of and immediately adjacent to the
Kerr-Addison Mine, which was one of Canada largest gold mines producing over
12,000,000 ounces gold over a 58-year period ending in 1996 (Figure
1) (see MNDM OFR5831). Adjacent to the west of McGarry is
Bonterra Resources' Cheminis Mine and Bear Lake deposits which host a historic
estimate* (2011, P+E Mining) of 3,750,000 tonnes at 5.7 g/t
(683,000 oz) (inferred) and the Cheminis Deposit contains a
historic estimate (2011, P+E Mining) of indicated of 335,000 tonnes
at 4.1 g/t (43,800 oz) and inferred of 1,391,000 tonnes at 5.2 g/t
(233,400 oz). Bonterra's Technical Reports are available at
www.sedar.ca.
On site infrastructure includes a head frame, shaft
compartments, hoist, offices, and fully functional core shack all
refurbished over the last ten years. McGarry is easily
accessible with the Trans-Canada Highway running directly through
the property.
McGarry Production and Infrastructure
As recently as 2013 the McGarry Mine was in production from
significant underground workings and was undergoing underground
exploration. Kerr/Armistice spent considerable capital upgrading
the McGarry's infrastructure including the shaft, hoist and onsite
facilities necessary to extract ore from underground. Additionally,
extensive underground exploration yielded outstanding grades over
very long lengths, including:
325 N Zone – 2280 sublevel
- 8.2g/t gold over 98m length and
1.5m width, Stope #1 (E & W)
- 4.6 g/t gold over 26m length and
1.3m width, Stope #1.5 (E &
W)
- 7.6 g/t gold over 79.2m length
and 1.4m width, Stope #2 (E &
W)
325 N Zone – 2330 sublevel
- 11.1 g/t gold over 24m length and
1.7m width, Stope #1 (E)
- 6.1 g/t gold over 7.6m length and
1.2m width, Stope #2 (E)
- 4.3 g/t gold over 7.6m length and
1.8m width, Stope #2 (W)
440 N Zone – 2250 level
- 6.2 g/t gold over 18m length and
1.6m width
The above exploration results and grades include 35% dilution
and are reported from Kerr Mines
news release April 22, 2013 which is
available on Sedar.com.
McGarry Historical Mineral Resources*
The McGarry Property was the subject of a PEA study in 2011 that
outlined a historical mineral resource of 447,000 tonnes grading
7.89 gpt gold for a total of 112,000 gold ounces in the Indicated
Category and an additional 157,000 tonnes grading 5.83 gpt gold for
a total of 29,000 ounces in the Inferred Category (Table 1
below). This estimate was based on a 3.43 gpt Au lower
cut-off with assay grades limited to 51.4 gpt gold. A
specific gravity of 2.79 grams per cubic metres was used along with
a minimum horizontal mining width of 1.5 metres. The report
is available at www.sedar.ca under Kerr Mines Inc. and its amended
version was published on 30 September
2011.
McGarry Historical Mineral Resource Estimate, Armistice
Resources 2011 Technical Report
|
|
Cut to 51.4 gpt
gold
|
Uncut
|
Mineral Resource
Category
|
Tonnes
|
Grade (gpt
gold)
|
Gold
(oz)
|
Grade (gpt
gold)
|
Gold
(oz)
|
Indicated
|
|
|
|
|
|
Total Indicated
(all zones)
|
447,000
|
7.89
|
112,000
|
8.57
|
123,000
|
|
|
|
|
|
|
Inferred
|
|
|
|
|
|
Total Inferred
(all zones)
|
157,000
|
5.83
|
29,000
|
5.83
|
30,000
|
Refer below for the caution on historical mineral resources
and mineral reserves.
Barber-Larder Open Pit
The McGarry Property also hosts the Barber-Larder open pit which
produced 70,000 tonnes of materials, of which approximately 51,000
tonnes were processed at the Kerr Mill which returned a total of
6,700 ounces of gold for an average reconciled grade of 4.1 gpt
gold (see MNDM AFRI file 32D04SE0006). This area of the
property and its historical production are distinct from, although
abutting, the production and resources on the McGarry shaft
zone.
McGarry Exploration Potential
The McGarry Property is host to numerous gold mineralized zones
and many have only been drilled to relatively shallow depth.
The following is a short summary of potential targets on the
Property that merit follow-up (see Figure 2 for locations).
McGarry Mine
Development work by the previous owners has prepared the 325N
Zone for production. This zone is of particular interest
because of its high grades as described above.
Exploration on the McGarry Deposit was quite extensive in and
near the existing mining infrastructure but generally outside the
area of the shaft between the 1,250 and 2,250 ft levels exploration
has been a lot less intensive. Considering the abundant
underground infrastructure, the targets that can be pursued can be
quite small. In particular, between the shaft and the eastern
limit of the Property, there is ample room for discovery and the
proximity of the historic Kerr-Addison mine opens up the
possibility of deep extensions of that deposit on the west side of
the Armistice Fault as suggested by north side down movement along
the Larder Lake Break (see MNDM OFR5831).
Barber-Larder Extensions
The Barber-Larder deposit was mined as a small open-pit by
Golden Shield Resources between November
1987 and July 1988. Production bottomed out at
approximately 46 metres. However, the deposit continues below
at similar grades (see MNDM, AFRI 32D04SE0006). Moreover,
beyond the top 120 metres vertical the deposit has not been much
explored and there are indications of significant gold
mineralization down to at least 600 metres vertical where a hole
intersected a narrow 30 cm core length interval at 11.7 gpt
gold.
To the west of the Barber-Larder deposit, previous exploration
identified a number of targets that merit follow-up.
Approximately 150 metres grid-west of the shaft a hole intersected
1.8 meters grading 3.4 gpt gold. 30 metres grid-east of this,
another hole intersected 3.9 gpt gold over 3.5 metres.
Approximately 25 metres east of the open pit a hole intersected
a 7.9 metre interval grading 7.5 gpt gold and although there is
only 330 metres between the eastern end of the old workings in the
Barber-Larder mine (120 metres) and the western end of the 2,250
foot level in the McGarry Mine the vertical distance is over 550
metres. Within this envelope there is ample room for
exploration.
Peninsula Zone
The Peninsula Zone is located immediately west of the
Barber-Larder Mine along the same package of deformed and altered
rocks. A hole drilled near the peninsular island returned 3.4
gpt gold over a core interval of 6.1 metres at a vertical depth of
85 metres (see MNDM AFRI 32D04SE0006).
Mill Zone and Western Zone
The Mill and Western Zones are located in a northeast striking
ultramafic unit that has been completely altered to
carbonate. The Mill Zone is located at the southern end of
the 750m long ultramafic unit and is
cut off by an east-northeast trending fault. Drilling on this
zone intersected up to 36.7 gpt gold over 2.1 metres.
The Western Zone is located near the northeastern end of the
same altered ultramafic unit. The zone was trenched over 75
metres in length and indicated the presence of a small mineralized
shoot approximately 15 metres long and 1.7 metres wide and assaying
an average of 3.9 gpt gold (see MNDM AFRI 32D04SE0402).
Dyke Zone
The Dyke Zone is located in the southeastern corner of the
McGarry Property and is hosted by an altered diorite or
gabbro. The NE trending dike is fractured in places and
contains quartz and calcite stringers with pyrite. The zone
extends for over 300 metres and was sampled over about 100 m giving an average of 7.25 gpt gold over
about 1.0 metres in width (see MNDM AFRI 32D04SE0402).
Lamprophyre Zone
The Lamprophyre Zone is located on the southeastern corner of
the Property and is hosted by mafic volcanics of the Temiskaming
Assemblage. The mineralized zone consists of a NE trending shear at
the contact of a lamprophyre dike. Values up to 3.9 gpt gold
are reported over 0.9 metres (MNDM, ARV050).
Arjon Zone
The Arjon Shear Zone is located in the northeast corner of the
McGarry Property and extends to the northeast onto the adjacent
Kerr Property. There are a few drill holes marked on a 1941
map (MNDM ARV50, MDC03) and mapping indicates the presence sheared
ultramafics rocks transformed to green carbonate. The map
also shows some NE trending quartz veins several tens of metres
long but no assays. None of these drill holes were compiled
by later explorers and are of uncertain origin. The Arjon
Shear is oriented NE and cuts the Blake River mafic volcanics, some
altered Ultramafic Units, and the syenite porphyry. Only low
grade gold values (up to 2.8 gpt Au) were found on the occurrence
as there was generally no interest in the past for bulk-minable
targets little work was done after the 1930's. On the
adjacent Kerr property there is a description of a "Northern"
crosscut that was driven on the 2,500 foot level across the
Temiskaming sediments into some mafic volcanics which are
presumably the Blake River Assemblage. This reference
describes a 400 foot (122 metres) section of drifting in altered
and sheared volcanics that assayed a minimum of 200 ppb over the
whole interval with some higher grade sections within.
This target needs to be followed-up for its potential for
intrusion-hosted bulk-minable gold mineralization.
Terms of Acquisition
The definitive agreement's effective date is March 29, 2018, and Orefinders, at its option,
has an additional sixty days to complete its due diligence and to
obtain all necessary approvals. In consideration for the McGarry
Property, as described above, Orefinders would issue 8 million of
its common shares ("Shares") to Kerr. The Shares are subject to a
lock up agreement with Kerr and are scheduled to be free trading
over a two-year period. Additionally, should Kerr opt to sell
any of the Shares as they become free trading, Orefinders has the
first right of refusal to reacquire these shares at fair market
value. Closing of the acquisition remains subject final approval of
the TSX Venture Exchange, as well as certain other conditions as
are customary in transactions of this nature.
Important Note Regarding Disclosure of Historical Mineral
Resources and Mineral Reserves
The McGarry Project contains a historic mineral resource
estimate. Python Mining Consultants Inc. was commissioned by
Armistice Resources Corp (now Kerr
Mines) to prepare a mineral resource estimate as reported in
a technical report titled "Technical Report and Mineral Resource
Estimate McGarry Project, McGarry Township (Virginiatown), Ontario". This report was published on
8 April 2009 and was amended on 30
September 2011. Orefinders considers the historical estimate
to be relevant and reliable given that it was prepared under NI
43-101 standards. Orefinders considers this resource estimate to be
historical as it has not independently verified it, and therefore
it cannot be relied upon as a current mineral resource for
Orefinders. A qualified person of Orefinders has not done
sufficient work to classify the historical estimate as current
mineral resources or mineral reserves and as such, Orefinders is
not treating the historical estimate as current mineral
resource.
QP Statement
The technical information contained in
this news release has been reviewed and approved by Charles Beaudry, P.Geo, Director and Vice
President Exploration for Orefinders, who is a Qualified Person as
defined in "National Instrument 43-101, Standards of Disclosure for
Mineral Projects."
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. Certain information in this press release
may contain forward-looking statements. This information is based
on current expectations that are subject to significant risks and
uncertainties that are difficult to predict. Actual results might
differ materially from results suggested in any forward-looking
statements. Orefinders' assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those reflected in the forward
looking-statements unless and until required by securities laws
applicable to Orefinders. Additional information identifying risks
and uncertainties is contained in filings by Orefinders with
Canadian securities regulators, which filings are available under
Orefinders' profile at www.sedar.com.
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SOURCE Orefinders Resources Inc.