Wolfden acquires past producer (June 26, 2001)

Wolfden Resources (YWO-V) has signed a letter of intent to purchase the past-producing Argosy gold property in the revived Red Lake mining district of northwestern Ontario.

Wolfden can acquire Argosy by spending $10,000 in cash and issuing 200,000 shares. The property is subject to a 2% net smelter return royalty, of which a 1% can be bought back for $500,000. This deal is subject to regulatory approval.

The mine operated intermittently between 1934 and 1952 and milled a total of 276,573 tons with an average recovery rate of 0.368 oz. gold per ton, to a maximum depth of 900 ft. The three mined zones are open at depth.

A drill hole, 120 ft. below the bottom level of workings on the No.1 vein, cut 3.3 ft. grading 0.68 oz. gold per ton.

Since 1952, the property has seen little exploration. In addition to the three mined zones, it hosts several significant veins, including No.8, where a raise assayed 1.25 oz. gold per ton over 2.2 ft. A surface hole was drilled to intersect the vein updip and returned 8.6 oz. gold over 1 ft. at a depth of 60 metres.

In a separate deal, Wolfden has obtained an option from two private vendors to acquire a 100% interest in three patented mineral claims in the Nickleby Lake area, near Thunder Bay, Ont.

Wolfden can acquire that property by paying $785,000 and issuing 175,000 shares over five years. The claims are subject to a 1.5% net smelter return royalty to the vendors, of which 0.75% can be bought back at any time for $750,000.

Jonpol Explorations (JON-T) has signed a joint-venture deal to acquire a half-interest in the claims by covering half of the payments due to the vendors. Jonpol will pay Wolfden (based on Wolfden’s share price at the time of issuance) to cover the share portion of the payment to the vendors.

The partners have already begun a program of line-cutting, ground magnetics and stripping on the claims.

In another deal, Wolfden has issued, by way of private placement, 375,000 units to Northway Explorations (NOW-T) at 40 apiece. One unit consists of one Wolfden share and half a purchase warrant. Each warrant is exercisable for one share at 65 for two years. A third of the shares will be flow-through shares and all shares are subject to an 18-month hold period.

The proceeds of the private placement will be used for exploration at Wolfden’s High Lake property in Nunavut and for working capital.