Placer options Musselwhite area play

Senior gold miner Placer Dome (TSE) is optioning the Neawagank Lake property from Wiscan Resources (ASE).

The property is 40 km southeast of Placer’s Musselwhite gold project, in the Opapimiskan Lake area of northwestern Ontario, where exploration is well-advanced.

Previous work on Neawagank included geophysical surveys, geological mapping and diamond drilling. Gold mineralization has been found throughout the property in highly folded and altered iron formation and in sheared and altered gabbro.

Some of the better values obtained from drilling include 0.37 oz. gold per ton over 5 ft. associated with iron formation, and 1.44 oz. over 0.7 ft. and 0.38 oz. over 2.9 ft. in sheared gabbro.

Placer can earn a 51% interest by paying $150,000 cash and spending $1 million on exploration over the next four years. It can then increase its stake to 65% by paying Wiscan an additional $60,000 and spending $600,000 over the following year.

Placer and Wiscan will form either a 51-49 or a 65-35 joint venture under which further expenditures will be shared on a pro rata basis. If a partner declines to participate in further expenditures, that partner’s interest could be diluted back to 15%, at which point it would automatically convert to a net smelter royalty (NSR). The NSR would vary from 0.75% with the price of gold at US$300 per oz. to 2% with gold above US$400 per oz. Placer is committed to spend $75,000 in the first year of the agreement.