Shareholders OK Gold Summit deal

Shareholders of Gold Summit Mines (GST-V) have approved a reorganization that will see the company take over a large land package in Nevada and California.

The reorganization includes a one-for-five rollback of shares, and a takeover of a Reno-based private company, Millennium Mining, which brings in a portfolio of four properties, all held under option deals.

The shareholders of Millennium will control about 54% of the company, and three Millennium directors will join the board of Gold Summit. Shareholders of Gold Summit also receive one warrant, exercisable at 50 for one year, for each ten old shares of Gold Summit.

Millennium’s property package includes the Tip Top property in the andesite belt of western Nevada. There, a 400-metre-long epithermal vein has been mapped, averaging 3 metres wide.

The vein has seen some limited drilling, with the best core intersection to date grading 11.2 grams gold per tonne over a 4.6-metre core length. In other places near the middle of the vein system, air-moderated reverse-circulation holes encountered gold grades of 16.8 grams per tonne across a 3.5-metre width and 15.8 grams per tonne across a 2.6-metre width.

Petrological examinations of the mineralized material at Tip Top suggests the exposed part of the vein is above the boiling elevation of the hydrothermal fluids that deposited the gold. That in turn means that at boiling depth grades may be higher.

Gold Summit plans further drilling, down dip and along strike from known gold intersections.

Millenium’s Monte Cristo property, in central Nevada, hosts a system of three sub-parallel quartz veins where surface samples returned up to 30 grams gold per tonne. The Gold Springs property in eastern Nevada has surface showings of silver and gold, while the Gold Reef property in the Mojave desert in southern California has a number of old workings where samples grading up to 10 grams gold per tonne are known from earlier work by Franco-Nevada Mining.

Under the arrangement, Gold Summit Mines changes its name to Gold Summit Corporation and retains its listing on the TSX Venture Exchange. The company plans to list the warrants on the exchange as well.

As part of the transaction, Gold Summit spun out existing assets under a new company, Voyager Explorations, whose shares will be distributed out to the shareholders of the old Gold Summit Mines. Those included options on a property in the Slate Falls area of northwestern Ontario, between Red Lake and Pickle Lake, and on the Pic property northeast of Marathon, Ont., covering part of a gabbro intrusion prospective for platinum-group elements.

The company plans to raise $1.5 million in a brokered secondary offering, which is conditional on the closing of the Millennium takeover. The issue consists of 5 million units priced at 30, with each unit consisting of a share plus one warrant exercisable at 45 and expiring in one year.