Working on the principle that the best place to find a new mine is near an old one, Buchans River (BUV-A) has added to its already sizable land position in the Buchans base metal mining camp of central Newfoundland.
The St. John’s, Nfld.-based junior recently signed an agreement with a unit of Phelps Dodge (PD-N) to acquire a 37-claim land package that includes the past-producing Oriental and Old Buchans mines, as well as the eastern portion of the past-producing Lucky Strike mine.
In return for these claims, Buchans River has agreed to issue 300,000 shares and 400,000 warrants to Phelps Dodge, subject to regulatory approval. The junior must also issue 400,000 additional shares to the major on completion of a bankable feasibility study. Phelps Dodge will retain a 2% net smelter return royalty, half of which can be purchased by Buchans River on a discounted cash-flow basis.
As a result of this latest transaction, Buchans River says it holds much of the Buchans River Formation, the productive geological horizon hosting the past-producing mines in the camp. In addition to the aforementioned mine properties, the land package includes the Clementine and Middle Branch base metal prospects and various other occurrences.
Between 1928 and 1984, the mines of the Buchans camp produced 16.2 million tonnes grading 14.51% zinc, 7.56% lead, 1.33% copper, 1.37 grams gold and 126 grams silver per tonne.
Buchans River believes additional deposits can be found in the region and, toward that end, has launched a program of geochemical and geophysical surveys to identify drill targets.
The junior is controlled by privately held Newfoundland Mining & Exploration, one of the major players in the staking rush in the Voisey’s Bay region of Labrador.
Buchans River holds several properties in Labrador, including claims in the South Voisey’s Bay area.
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