Sennen and North Arrow set to partner on Nunavut gold exploration

Sennen Resources (SN-V) is signaling its faith in arctic gold by cutting a deal with North Arrow Minerals (NAR-V) for a stake in its Hope Bay Oro gold project in Nunavut.
In a somewhat convoluted deal, a third junior Chelsea Minerals (CCC.H-V), will buy the right to earn a 60% interest in the project from North Arrow, only to be subsequently acquired by Sennen.
The Oro project covers 40 sq. km adjacent to Newmont Mining’s Hope Bay Gold mine, which is scheduled to go into production sometime this year. Once it does, it will represent the second major gold mine in Nunavut after Agnico-Eagle’s Meadowbank gold mine, which went into commercial production last year.
Sennen will earn its stake in the grassroots exploration play by paying $50,000 in cash to North Arrow and by spending $5 million over a five year period. It must spend at least $500,000 of that in its first year.
The acquisition of Chelsea will come through a share exchange that will see Chelsea shareholders get one share of Sennen for every two and one half common shares of Chelsea.
The deal will give Chelsea shareholders access to Sennen’s treasury which is currently stacked with over $15 million in cash ready to be poured into exploration at Oro.
In Toronto on Feb. 2 Sennen shares were up 19% or 6 cents to 37.5 cents on 124,000 shares traded while North Arrow shares were up 17% or 3 cents to 20 cents on 1.1 million shares traded and Chelsea shares were flat at 18 cents.
Newmont’s Hope Bay project is made up of three main deposits — Doris, Boston and Madrid – which between contain over 9 million oz. of gold.
The leases being acquired by Sennen make up the northern 10 km of the 80 km long Archean greenstone belt which hosts the Newmont deposits.
And while Sennen can take a majority stake, the exploration program will be run by North Arrow. The company says it will start drilling and surface exploration as early as possible but gave no specific dates.
North Arrow says there are a number of gold showings and potentially gold bearing structures on the site but they have only been minimally explored.
When the program does get underway it will focus two mineralized zones: the Ida Point prospect at the northern end of the property and the Wombat zone at the southern end.
Surface trenching at Ida over a 400 metre strike length returned highlight gold values of 11.6 grams per tonne gold over 1.9 metres and 24.7 grams over 5 metres.
A four hole diamond drill program in 1998 returned downhole intersections of 14.3 grams over 2 metres and 5.5 grams gold over 6 metres.
As for Wombat, North Arrow describes it as a gold bearing shear zone which has been traced for more than 1,000 metres near the property’s southern boundary. A number of short holes have been drilled at returning 40.3 grams gold over 2.7 metres.
As for gaining access to the remote project, the benefits of being near Newmont again come into play as Newmont has built a port facility and airstrip just a few kilometers away from the site.