Enertopia Corporation (CSE:TOP) (OTCMKTS:ENRT) shares jumped higher on Monday following news it has signed a letter of intent with Eagle Plains Resources Ltd (CVE:EPL) (OTCMKTS:EGPLF) to earn up to a 75% interest in the 7,000-hectare Pine Channel high-grade gold project in northern Saskatchewan, Canada.
In morning trading, Enertopia shares in Toronto were 50% higher at C$0.015.
According to a statement, highlights of the Pine Channel project include the following historic and 2019 Eagle Plains results:
- Vein Occurrence No 9 Au showing includes three gold-bearing quartz veins hosted within metamorphosed intrusive rocks. Results from 2019 included grab samples of blue-grey quartz with arsenopyrite collected from the Main vein area which returned 7.1 g/t Au and 6.9 g/t Au.
- The North Norite Bay Au showing is a northwest-striking, steeply northeast-dipping quartz-filled shear zone. Results from 2019 include a 1.84-kilogram composite of trench rubble consisting of white to blue-grey quartz with pyrite and arsenopyrite which returned 77.5 g/t Au.
- The ELA Au showing is a northwest-striking, steeply southwest-dipping to vertical quartz vein mineralized with arsenopyrite, pyrite and minor chalcopyrite disseminations. The vein varies in width from 1.2 meters (m) to 4.0 m, occurs over a strike length of over 200 m and is open along strike. Twelve NQ drill holes were completed in 1987, tracing the mineralized vein to a depth of 38 m with highlights including 24.52 g/t Au from 40.35 m to 40.87 m in hole 87-07 and 5.27 g/t Au from 23.4 m to 25.15 m in hole 87-11.
Meanwhile, Enertopia said Eagle Plains will be the operator of the 7,000-hectare property which is considered to have significant potential to host orogenic gold mineralization.
The company said the objective of the 2019 program was to evaluate and confirm the nature of mineralization previously documented at historical showings. Limited drilling has been completed in and around the property area by past operators, which resulted in the successful delineation of mineralization to shallow depths. Potential to test for further continuity at depth is considered to be excellent.
“We are thrilled to be working with Eagle Plains Resources Ltd as they have shown time and time again over their 25-year history to find forgotten projects with significant merit and take them to the next step in the development process," said Enertopia CEO Robert McAllister.
Terms of LOI:
- To earn a 60% interest in the property, Enertopia will commit to making total exploration expenditures on the property of C$2,000,000 over a 4-year period;
- Enertopia would agree to pay a total cash consideration of C$250,000;
- Enertopia would agree to issue to Eagle Plains 1.6 million voting-class common shares;
- To earn an additional 15% interest in the property (for a total of 75%), Enertopia would agree to complete the following by December 31, 2024: make an additional exploration expenditures of $1 million ($3 million total); make an additional cash payment of $100,000 to Eagle Plains ($250,000 total); and issue to Eagle Plains an additional 400,000 post-consolidation voting class common shares (2 million total);
- During the term of the option, Eagle Plains and Enertopia would agree to include in this agreement any additional claims staked or otherwise acquired within a 3 km area from existing claim boundaries;
- All eligible exploration work carried out on the property will be filed as assessment credits; and
- Eagle Plains will serve as operator under industry-standard terms until Enertopia has completed earn-in requirements to earn 60% as outlined in a formal agreement. As Operator, Eagle Plains may employ the services of TerraLogic Exploration Services, which will agree to charge industry-standard rates for services. Upon execution of a formal agreement, Eagle Plains and Enertopia will form a committee to oversee and direct exploration activity.
Following the exercise of its option to earn 60%, Enertopia and Eagle Plains shall then form a 60/40 joint venture for further exploration and development of the Property. Operatorship shall be transferred to Enertopia at the time of the formation of the JV.
Terms of the JV to be included with the definitive agreement documents including standard dilution clause down to 10%, at which time the party would retain 2% royalty with one-half buy-down for $1 million.
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