Commander Lands AngloGold As Baffin Island Partner

Junior explorer Commander Resources (CMD-V, CMDRF-O) will be able to step up exploration at its flagship Baffin Island gold project in Nunavut next year thanks to a new, well-heeled partner who will pick up the tab — AngloGold Ashanti (AU-N, AGD-L).

The early stage exploration project in central Baffin Island hosts 16 gold prospects and hasn’t seen drilling since 2007. But under a joint-venture agreement with AngloGold Ashanti announced in September, at least 3,000 metres of diamond drilling will be completed at the project, paid for by AngloGold. The deal will see the Johannesburg-based gold major earn up to 51% of the project by funding $20 million in exploration over six years, including $5.5 million in the first two years.

When AngloGold is fully vested, a joint venture will be formed, and the company has 60 days to decide if it wants to increase its stake to 70% by funding all spending to the completion of a feasibility study on at least one target at the project. The feasibility would have to be completed within four years.

As part of the deal, AngloGold will also invest $1.2 million in a private placement, each unit consisting of one Commander share priced at 12¢ and half a warrant. Each whole warrant will be exercisable at 24¢ apiece for two years.

“We believe this to be the right time for a high-quality partnership with one of the top gold companies in the world,” said Commander president and CEO Ken Leigh in a statement. “The agreement enables us to rapidly accelerate exploration and development of our Baffin gold project, which covers a regionally extensive and exciting new gold district in the rapidly developing Nunavut frontier.”

Commander has carried out a limited field program this year in preparation for a full exploration campaign that will include drilling multiple prospects starting in the spring.

The junior will steer the joint venture’s exploration program as project manager for the first two years at Baffin Island.

Between 2003 and 2006, Commander discovered 16 gold prospects at the 780-sq.-km project over a strike length of 140 km. All are hosted in the Bravo Lake Formation, composed mostly of mafic volcanic and intrusive rocks and also clastic metasedimentary rocks and lesser iron formation and sulphidic schist. The rocks at the Baffin project are deformed by thrusting, multiple phases of folding and upper amphibolite grade metamorphism.

The property, 160 km southwest of the Inuit hamlet of Clyde River, covers an entire greenstone belt and high-grade gold has been found in three separate iron formation units and in younger granodiorite, gabbro and sedimentary units in shear zones and quartz veins. Gold occurs as primarily as free gold, disseminated, in quartz veins and associated with arsenopyrite.

Prospecting this fall at the Baffin Island project focused on the 1.5-km-long Hebert target– a 7 by 2-km area discovered in 2007. The four-week program turned up a new gold showing 1.5 km northwest of Hebert and within the same structural and geological setting.

Drilling at Baffin Island during a 2005-06 campaign returned up to 6 metres of 9.5 grams gold per tonne and 3.3 metres of 12.1 grams gold at the Malrok prospect and 8.9 metres of 10.63 grams gold and 4.5 metres of 10.17 grams gold at the Ridge Lake target.

Commander Resources has other gold, base metals and uranium properties across Canada, some of which are joint ventures with Bayswater Uranium (BAY-V, BYSWF-O), BHP Billiton(BHP-N, BLT-L), Donner Metals (DON-V, DONFF-O), and Xstrata (XSRAF-O, XTA-L).

At presstime, Commander shares traded at 23¢ in a 52-week range of 3-24¢. The company has 79.6 million shares outstanding.