-- Published: Thursday, 22 March 2018 | Print | Disqus
By: Nicholas LePan, GoldSeek.com
As Gold prices have stabilised, large operators are looking to grow their resources to support their processing operations and to maximize returns on capital expenditures by extending the life of the mine, this bodes well for junior miners that are well positioned near producing mines.
Eagle Plains Resources Ltd. (TSX-V: EPL) is one junior that holds a significant land package along the same geological trend that a major mining company is looking to expand upon. This has prompted the Eagle Plains to spin-out these projects into new company called Taiga Gold Corp. The spin-out is intended to reward Eagle Plains shareholders with a ½ share of this new company while at the same time making these projects an M&A target.
SSR Mining announced yesterday that it has begun its 2018 drilling program on Eagle Plain’s 100-per-cent owned Fisher property, located in east-central Saskatchewan. SSR Mining (“SSRM”) (formerly known as Silver Standard Resources) is planning approximately 18,000 metres (59,000 feet) of drilling for the property during 2018. SSRM is in the second year of a four-year option agreement whereby SSRM may earn up to an 80-per-cent interest in the 34,000-hectare property by completing $4-million in exploration expenditures and making $3.3-million in cash payments to Eagle Plains. SSRM expenditures to date on the project are approximately $1.5-million. The Fisher project is contiguous to the north, south and east with SSRM's Seabee gold operation.
SSRM made its intentions known to significantly expand the resources at its wholly-owned Seabee Gold Operation in its October 2017 Preliminary Economic Assessment. The PEA outlined Measured and Indicated Mineral Resources of 540,000 ounces of gold at an average grade of 8.02 g/t. The company also outlined an Inferred Mineral Resources of 620,000 ounces of gold at a grade of 7.66 g/t. SSRM is looking for more to provide feed to its mill.
The operation comprises two underground gold mines, the Santoy mine and the Seabee mine. The Santoy mine has been in continuous commercial production since 2014. Commercial production at the Seabee mine commenced in 1991. Ore from both mines is processed at the Seabee mill facility, which has been in operation since 1991 and has current processing capacity of over 900 tonnes per day.
The Seabee mill has the potential to achieve operating throughput of up to 1,200 tonnes per day based on upgraded mill facilities and operating experience at similar mills. This would further increase production from that contemplated under the PEA and potentially improve operating costs due to economies of scale and extend mine life.
One of the main reasons for this option is that the Santoy shear zone extends right towards Eagle Plain’s Fisher property. During 2017, SSRM conducted detailed exploration activity including geologic mapping, 571 grid till/soil samples, 276 till samples, and widespread prospecting and rock sampling activity. Fieldwork was followed up with UAV aeromagnetic survey.
Results were encouraging, with numerous areas of elevated gold in soils documented within Fisher property boundaries. SSRM geologists have traced the extension of the Santoy shear structure southward from the Santoy deposit (currently in production) over seven kilometres within Fisher property boundaries (see trace of Santoy Shear Zone on the attached map), noting visible gold mineralization in two areas. SSR Mining has high hopes for the exploration potential that the Fisher property represents especially considering their $90 million mine upgrade/expansion next door at the Seabee Mine Operation.
Saskatchewan is a proven mining jurisdiction that hosts some of the most robust deposits in the world from uranium to gold and everything in between. In an effort to attract exploration and development, the provincial government reduced royalties on mineral discoveries. In 2002, for example, the government brought in a ten-year royalty tax holiday for new gold and base metal mines. Until 150 per cent of initial exploration and development costs are recovered, there are no royalties payable. This regime has led the province to be considered Canada’s top mining jurisdiction according to the annual global survey of mining executives released by the Fraser Institute.
All this presents a compelling investment case for Eagle Plains Resources with exposure to a major exploration program on its Fisher Property, a proposal to spin-out a new company with properties located near SSRM and plans to drill its 100-per-cent owned Iron Range Property in late Q2 The company has decades of successful track record of returns for its investors being well-managed and financed with no debt. The company is generating revenue from their 100% owned Terralogic Exploration subsidiary along with its Prospector Generator model which includes an exciting joint venture with a billion-dollar mining company (SSR Mining) which is funding a large multimillion-dollar exploration program to earn into a project which is very lucrative to SSRM’s ongoing gold mining operations.
Eagle Plains offers investors a low-risk opportunity to participate in the upside of the Fisher Project along with their portfolio of over 30 projects in Western Canada. The proposed spin-out of its Taiga Gold Corp. will reward Eagle Plains shareholders on record as of the spin-out date, expected to be in mid-April, with ½ a share of the new Taiga Gold Corp. and a stake in a new company.
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-- Published: Thursday, 22 March 2018 | E-Mail | Print | Source: GoldSeek.com
