By Peter Kennedy
Glacial retreat in northwestern British Columbia could be an opportunity for Crystal Lake Mining Corp. [CLM-TSXV, SIOCF-OTC, SOF-FF, FSE], which says it has outlined a large copper-gold porphyry target area, with high-grade gold potential on the eastern side of the company’s Newmont Lake Project.
Crystal Lake is exploring in the Chachi Corridor along the McLymont fault system, which is located in the fabled Eskay Mining Camp, not far from the former Eskay Creek and Snip gold mines.
Based on cross referencing old and new satellite imagery and orthographic photos, Crystale Lake said glacial retreat of approximately two to four kilometres has occurred within the Chachi Corridor since parts of it were last explored with “boots on the ground” in 2008.
“Widespread surface alteration, intrusive bodies and other geological features consistent with large-scale porphyry copper-gold and associated shear vein gold and/or carbonate replacement gold systems are apparent in the geochemical data compilation,’’ the company said in a press release, Wednesday.
“This, plus the newly exposed prospective ground makes the entire Chachi Corridor a high priority target,” the company said.
Crystal Lake is a mineral exploration company with projects in British Columbia and Ontario. Wednesday’s announcement sent the shares up 8.96% or $0.03 to 36.5 cents, leaving Crystal Lake with a market cap of $37 million, based on 101 million shares outstanding. The shares are currently trading in a 52-week range of 74 cents and 24 cents.
Crystal Lake has an option to earn a 100% interest in the Newmont Lake Project, which it has described as one of the largest land packages in the broader Eskay region in the heart of northwest B.C.’s Golden Triangle.
Under an agreement with Romios Gold Resource Inc. [RG-TSXV, RMIOF-OTC], the junior can exercise the option by spending $8 million on exploration at Newmont Lake over the next three years. Under the deal, Romios will receive a $2 million cash payment and 12 million common share of Crystal Lake. The shares must be paid out over a three-year period in batches of four million in each year.
Romios will retain a 2.0% net smelter return royalty on the Newmont Lake project, or on any after acquired claims within a 5.0-kilometre radius of the current project boundary. The royalty may be reduced at any time to a 1.0% NSR upon payment of $2 million by Crystal Lake per 0.5% of the NSR.
Under the agreement, Crystal Lake will issue two million shares to Romios in the event that a National Instrument 43-101-compliant technical report on the Newmont Lake project contains a resource estimate with in excess of one million ounces of gold equivalent (being the sum of the indicated and inferred resources).
For every additional one million ounces of gold equivalent resources that are documented in the technical report, Cystral Lake will issue another one million shares to Romios.
Crystal Lake believes it has picked a good time to be exploring in the Eskay area due to the “unprecedented glacial retreat”, the buildup of infrastructure in northwest B.C., and a global trend towards mass electrification, the company has said.
Infrastructure and access to the southern portion of the Newmont Lake Project have recently been upgraded with the completion of power production from AltaGas’ Northwest Hydroelectric facilities, including the 66 megawatt McLymont Creek power plant.
The power plant sits at the southern tip of Crystal Lake’s land package.
Crystal Lake said a team of approximately 20 people at any given time will be exploring and validating the Chachi Corridor. A phase one program consisting of extensive prospecting, lithological and alteration mapping, airborne and ground geophysics , and geochemical and alteration vectoring using the latest in-field mobile hyperspectral and X-ray fluorescence technology should quickly define priority targets for drilling this summer, the company said.
Crystal Lake recently raised $4 million from a private placement financing. That money was raised from the issuance of 15.4 million units priced at 22.5 cents per unit, and a non-brokered flow-through placement of $500,000 at 35 cents per unit.