Canstar's new neighbours ... consolidation ?Looks like Canstar is getting some new interest in their central Newfoundland claims near
past-producing Buchans mine. CANTERRA MINERALS ACQUIRES THE PAST PRODUCING BUCHANS MINE, LUNDBERG DEPOSIT AND OTHER CRITICAL AND PRECIOUS METALS PROJECTS IN NEWFOUNDLAND
Canterra Minerals Corp. has entered into an asset purchase agreement with Buchans Resources Ltd. (BRL), an arm's-length non-listed reporting issuer, and its subsidiary Buchans Minerals Corp., to acquire the mineral rights to several critical and precious metals projects in central Newfoundland. The properties will add 316 square kilometres to Canterra's already substantial property position in central Newfoundland. BRL's central Newfoundland property portfolio includes the past-producing Buchans mine, a prolific polymetallic massive sulphide mine that was operated by Asarco (and others) for over 50 years, producing zinc (Zn) and copper (Cu) concentrate from high-grade ore. The project contains a mineral resource estimate, which contemplates a potential open pit development, while also hosting significant exploration potential for new high-grade discoveries.
Key points:
- Creates a district-scale portfolio consisting of seven resource-stage critical minerals projects;
- Consolidated indicated mineral resource of 1.4 billion pounds contained zinc and inferred mineral resource of 317 million pounds contained zinc;
- Consolidated indicated mineral resource includes 251 million pounds of contained copper and significant gold and silver credits;
- Adds a large bulk-tonnage mineral resource at the Buchans mine (Lundberg deposit) with substantial opportunity for new high-grade Zn-Cu VMS (volcanogenic massive sulphide) discoveries within the brownfield site;
- Demonstrated economic potential through the Stantec internal scoping study (2019) at the Lundberg deposit, and the historical scoping study and metallurgical test program evaluating a centralized milling of the deposits consolidated in this acquisition (2015 to 2017);
- Synergistic acquisition that consolidates critical and precious metals properties (total size of 684 square km) in the Buchans camp, Victoria Lake camp and Valentine Lake shear zone;
- Canterra emerges with two drill-ready projects, both with prospective advanced-stage high-grade Cu-Zn massive sulphide targets;
- Addition of Michael Power, currently a director of BRL, as director of Canterra, an engineer and chartered financial analyst with over 50 years of experience in the mining industry;
- Addition of Paul Moore as vice-president of exploration and David Butler as exploration manager, each currently holding those roles at BRL, who, combined, have 60 years of experience in Eastern Canada.
Chris Pennimpede, president and chief executive officer of Canterra, commented: "The acquisition of the past-producing Buchans mine represents a transformational and complementary opportunity for Canterra. The exploration opportunities adjacent to one of the world's highest-grade past-producing VMS mines are exceptional and there has been limited modern exploration despite the extensive exploration database. The addition of four resource-stage projects establishes Canterra as a major resource and landholder in prolific critical and precious minerals belts, and will allow for streamlined exploration and development. This is an exceptional area to explore with excellent infrastructure, road-accessible projects, and communities that are supportive of mining and economic development. Marathon Gold's development of its nearby Valentine Lake project and Teck Resources' past-producing Duck Pond mine both provide a pathway to development, adjacent infrastructure and a trained work force. We are excited to begin work on the new properties. I am also very excited to welcome Michael Power to Canterra's board of directors, and Paul Moore and David Butler to the exploration team as vice-president, exploration, and exploration manager, respectively."
Terms of the asset purchase agreement
The acquisition of the properties will be a cashless transaction, with the consideration comprising: (a) 24.91 million common shares of Canterra, representing an approximate 19.9-per-cent ownership interest at closing; and (b) 125.5 million common share purchase warrants (subject to certain adjustments on closing) of Canterra exchangeable for common shares of Canterra within two years of closing (subject to extension in certain circumstances), for no additional consideration, upon the fulfillment of certain conditions set out in the definition of buyer warrants in Section 1.1 of the agreement, and particularly that the exchange of the consideration warrants will not result in a change of control of Canterra or the creation of a new control person of Canterra, as defined by the TSX Venture Exchange. Together, the consideration shares and the consideration warrants represent a total consideration value of approximately $7.5-million based on Canterra's closing price of five cents per share.
The consideration shares and the consideration warrants (and underlying common shares of Canterra) will be subject to a statutory hold period, expiring four months and one day from the closing. Additionally, they will be subject to transfer restrictions for a period of 24 months postclosing. The common shares of Canterra issuable upon exchange of the consideration warrants will be subject to contractual holds with one-third being freely tradable on distribution (assuming expiry of statutory hold), one-third being freely tradable on the date which is three months from distribution and one-third being freely tradable on the date which is six months from distribution.
The acquisition is expected to be completed in December, 2023, and remains subject to customary conditions for transactions of this nature, including third party consents and waivers, and the acceptance of the acquisition by the TSX-V. No finder's fees or commissions are payable in connection with the acquisition.
Synergistic land position
The five principal properties to be acquired pursuant to the agreement are the Buchans mine property (hosting the Lundberg deposit), the Bobby's Pond property (hosting the Bobby's Pond deposit), the Tulks Hill property (hosting the Tulks Hill deposit), the Daniel's Pond property (hosting the Daniel's Pond deposit) and the Tulks South property, optioned to Quadro Resources.
GLTA Longs !!