Vancouver, British Columbia--(Newsfile Corp. - December 2, 2024) - Auranova Resources Inc. (the "Company") is pleased to announce that it has entered into a definitive agreement (the "Agreement") with Kenorland Minerals Ltd. ("Kenorland"), pursuant to which Kenorland has agreed to grant to the Company the right to acquire up to a 70% interest in the South Uchi Project (the "Project"), located in the Red Lake District of Northwestern Ontario.
Highlights
90 kilometre long (871.37 square kilometre) major claim package covering greenstones of the Uchi subprovince 45 kilometres east of Kinross Gold Corp. ("Kinross")'s Great Bear project.
Barrick Gold Corporation ("Barrick") had the South Uchi Project under option until January 2023 after spending $5.5 million on regional exploration between January 2021 and January 2023.
Kenorland spent a total of $2,776,000 in three programs consisting of regional studies, till sampling, prospecting and mapping during the field seasons of 2020, 2023 and 2024.
Major gold-in-till targets including high gold grain counts and pristine gold grains were identified as a result of Barrick and Kenorland's work.
Bedrock samples from 2024 have returned values up to 13.35 g/t gold in sheared, sulphide rich iron formation proximal to the centre of the Papaonga gold-in-till target. These samples suggest potential for "Musselwhite" style gold mineralization, but additional prospecting and drilling are required to confirm this model.
To date there has been no drilling on any of the targets identified by Barrick or Kenorland.
Auranova is raising $8 million to execute a 15,000 metre drill program, which will earn a 51% interest in the South Uchi Project. This can be increased to a 70% interest through subsequent additional work and consideration as described below.
The area of the gold-in-till and bedrock targets is expected to be connected to a local logging road network for the first time by ongoing forestry activity starting in 2025.
Figure 1: Regional topography with South Uchi Project claims and local gold deposits with resources of over 5 million ounces. infrastructure and communities are also shown.
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1. Kinross reports 2023 fourth-quarter and full-year results: (Date February 14, 2024) - Updated resource to the technical report titled Great Bear Project Ontario, Canada prepared by Nicos Pfeiffer, P.Geo., John Sims, CPG, Yves Breau, P.Eng., Rick Greenwood, P.Geo., Agung Prawasono, P.Eng., issued February 13, 2023
2. Red Lake Historical Au Production https://en.wikipedia.org/wiki/Red_Lake_Mine
3. Red Lake Evolution Mining https://evolutionmining.com.au/red-lake/
4. First Mining Gold - Springpole Au Project https://firstmininggold.com/projects/tier-1/springpole-project/
The Q.P. has not verified these historical and currently reported resource values which are subject to change during the course of exploration, drilling and mining development.
Figure 2: Regional greenstone belts with South Uchi Project claims and local gold deposits with resources of over 5 million ounces. Local infrastructure and communities are also shown.
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Option Agreement
Under the terms of the Agreement, the Company may acquire an initial 51% interest in the Project (the "First Option") by fulfilling the following conditions:
Pay $250,000 within two days of the signing of the Option Agreement
Pay an additional $250,000 upon receiving the Drilling Permit.
Complete at least 15,000 metres of diamond drilling or incur $8,000,000 in Qualifying Expenditures on or before the second anniversary of the Drilling Permit issuance.
Issue to Kenorland common shares of the Company representing a 19.9% equity interest upon receiving the Drilling Permit.
Grant Kenorland the right to receive additional common shares, for no additional consideration, to maintain a 19.9% equity ownership until the Company issues common shares having a minimum value of $10,000,000 through future offerings and other issuances.
Enter into an Investor Rights Agreement granting Kenorland the right, for so long as Kenorland holds a 7.5% interest in the Company, to: (i) participate in equity financings and top up its holdings in relation to dilutive issuances in order to maintain its prorate interest in the time of such financing; and (ii) nominate one person to the board of directors of the company.
Kenorland shall act as operator pursuant to an Operators Service Agreement during the First Option period in exchange for a management fee equal to 15% of total Qualifying Expenditures. The management fee, signing and drill permit payments will count as Qualifying Expenditures.
Second Option: Acquiring an Additional 19% Interest
If the Company exercises the First Option, it will have the right to acquire an additional 19% interest in the Project (the "Second Option"), for an aggregate 70% interest, by incurring an additional $10,000,000 in Qualifying Expenditures on the Project on or before the third anniversary of the Company's election to proceed with the Second Option. If the Company does not exercise the Second Option, it will transfer a 2% interest back to Kenorland, resulting in Kenorland holding a 51% interest and the Company holding a 49% interest under a joint venture agreement.
Preliminary Economic Assessment and Free-Carried Interest
The Company has agreed to undertake commercially reasonable efforts to complete a Preliminary Economic Assessment ("PEA") on the Project, demonstrating at least 1,000,000 ounces of gold equivalents in any category of mineral resource, in accordance with National Instrument 43-101 - Standards of disclosure for Mineral Projects, during or after the Option period. If the PEA is completed after the Second Option, the Company will hold a 70% interest in the Project, and Kenorland will retain a 30% free-carried interest until the completion of the PEA. Kenorland will also have the right to receive common shares of the Company, exclusive of any shares disposed of by Kenorland, for no additional consideration, to be issued a minimum 10% equity ownership in the Company from the election to exercise the Second Option until the PEA is delivered.
South Uchi Geologic Summary
Multiple major east-west striking shear zones associated with the subprovince boundary between the volcanic-dominated Uchi geological subprovince to the north and the sedimentary-dominated English River geological subprovince to the south transect the Project along its 90 kilometre strike-length. The regional, east-west striking deformation zones have strongly deformed the underlying Confederation Assemblage volcanic rocks, a similar geologic setting to Kinross' Great Bear Project, located 45 kilometers along strike to the west. Deformation associated with these structures has resulted in zones of strong shearing, alteration, and folding of the metavolcanic-clastic metasedimentary-iron formation stratigraphy. Gold mineralisation is hosted within intrusive, sedimentary and volcanic rock types associated with penetrative fabrics, quartz-sulphide veining, disseminated sulphides and variable alteration assemblages. Systematic, regional geochemical sampling surveys completed between 2021 and 2023 defined two large scale, coherent gold-in-till anomalies (see Kenorland press release dated February 28, 2024); the Papaonga target (Au-Ag-Te-W±As-Sb) and Target B (Au-Te-W±Ag) areas.
Figure 3. South Uchi Project regional glacial till sampling gold geochemistry (2021-2023)
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Papaonga Target Area Summary
The Papaonga target is a large gold-in-till and heavy mineral concentrate (HMC) gold grain anomaly, covering approximately 5 kilometres of east-west strike length and 8 kilometres along the interpreted southwest ice flow direction. It is highlighted by newly discovered bedrock gold mineralization during the 2024 summer exploration program (see Kenorland press release dated September 11, 2024). The underlying geology is within the interpreted eastern pressure shadow of an interpreted early (pre to syn-tectonic) diorite pluton bounded by regional first order, major east-west trending deformation zones to the north and south. Northeast-trending, second-order structures have intensely deformed, folded, and offset a geologically complex stratigraphy consisting of clastic sedimentary rocks intercalated with iron formations and polymictic conglomerates, calc-alkaline mafic volcanics, and tholeiitic mafic volcanics. Multi-phase deformation has produced strong penetrative fabrics within all rock types (intrusive, sedimentary and volcanic rocks) associated with sericite, Fe-carbonate, chlorite, and calcite alteration.
During the 2024 summer field season, Kenorland conducted a HMC till sampling survey, mapping, and prospecting program at the Papaonga target area. The program focused on identifying bedrock sources of gold-in-till dispersal plumes outlined in the 2023 exploration campaign. The HMC till sampling returned strong gold grain counts, including a peak of 951 total gold grains, 91% of which were pristine, coinciding with the previously identified fine fraction gold-in-till anomaly. Prospecting efforts identified widespread gold and silver mineralization in outcrop, with rock sampling assay results of up to 13.35 g/t Au and 60.4 g/t Ag. The prospecting campaign identified widespread gold mineralisation across the Papaonga target area, associated with northeast-trending shear zones and multiple lithologies. These include diorite plutons, clastic sedimentary rocks, and mafic volcanic rocks, each showing evidence of long-lived, overprinting hydrothermal alteration systems. The results further confirm the potential of the Papaonga target as a significant, previously unrecognized gold system.
Figure 4. Papaonga target and Target B geology, till geochemistry, gold grain counts and rock geochemistry. For more information see Kenorland news release of September 11, 2024.
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About the South Uchi Project
The South Uchi Project was first identified and staked by Kenorland based on the region's prospectivity to host significant gold mineralised systems. The South Uchi Project is located 45 to the east of the Great Bear property which was sold to Kinross in February 2022 for $1.8 billion. Kenorland staked the project in April 2021 and spent $500,000 before optioning it to Barrick Gold in September 2021. Barrick subsequently spent an additional $6 million on the property before dropping the option in January 2023. Kenorland spent a further $500,000 for a total Property expenditure of $7 million. The South Uchi property has never been drilled and Auronova can earn 51% for $8 million in Qualified Expenditures. The Project covers a portion of Confederation Assemblage volcanic rocks, as well as the boundary between the Uchi geological subprovince to the north and the English River geological subprovince to the south.
Kenorland holds a 2% net smelter return royalty on the Project (see press release dated September 16, 2024).
Qualified Person
William Yeomans, P.Geo., a "Qualified Person" under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release. Mr. Yeomans is a gold exploration professional with over 40 years of experience in all stages of gold exploration throughout the Americas, including the Superior Province throughout Quebec and Ontario. He gained extensive exploration management experience across the entire Guiana Shield with BHP and has generated projects which resulted with significant NI-43-101 gold resources. He has worked as a consultant to IAMGOLD and Dundee Precious Metals Inc., identifying acquisition opportunities across Canada, the USA and South America. He is currently the President of Yeomans Geological Inc. as well as 1127637 B.C. Ltd. and has many years of experience as a board member for several junior mining companies.
About Auranova Resources Inc.
The Company is an unlisted reporting issuer in the Provinces of British Columbia, Alberta, Saskatchewan and Manitoba. Its directors and major shareholders are Thomas Obradovich, Chris Taylor and Timothy Young. Auranova is in the process of completing a financing consisting of hard dollars and flow through shares for phase one exploration and general working capital on the Papaonga Target.
About Kenorland Minerals Ltd.
Kenorland Minerals Ltd. (TSXV: KLD) is a well-financed mineral exploration company focused on project generation and early-stage exploration in North America. Kenorland's exploration strategy is to advance greenfields projects through systematic, property-wide, phased exploration surveys financed primarily through exploration partnerships including option to joint venture agreements. Kenorland holds a 4% net smelter return royalty on the Frotet Project in Quebec which is owned by Sumitomo Metal Mining Canada Ltd. The Frotet Project hosts the Regnault gold system, a greenfields discovery made by Kenorland and Sumitomo Metal Mining Canada Ltd. in 2020. Kenorland is based in Vancouver, British Columbia, Canada.
For further information, please contact:
Thomas Obradovich
Chief Executive Officer
Tel: (416) 985-7140
Caution Regarding Forward-Looking Information
This news release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects', "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved". Forward looking statements involve risks, uncertainties and other factors disclosed under the heading "Risk Factors" and elsewhere in the Company's filings with Canadian securities regulators, that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Although the Company believes that the assumptions and factors used in preparing these forward-looking statements are reasonable based upon the information currently available to management as of the date hereof, actual results and developments may differ materially from those contemplated by these statements. Readers are therefore cautioned not to place undue reliance on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
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