Canada-based precious metals producer Silver Standard Resources has signed an option agreement with Eskay Mining to acquire up to a 60% undivided interest in the SIB project in British Columbia, Canada.
Spread over a land package of 4,400ha, the SIB project contains 30 mining claims.
Silver Standard chief geologist Carl Edmunds said: "The SIB project is a very exciting exploration target in Northern Canada due to it's higher grade drill results, the fact that these types of PME-VMS deposits often occur in clusters, and this property is 4km along strike from the prolific Eskay Creek mine, which produced over three million ounces of gold and nearly 160 million ounces of silver between 1994 and 2008.”
Earlier work from the 1990s discovered PME-VMS at the Lulu zone, on SIB, near-surface, and later attempts for further exploration faced obstacles due to the presence of a fault potentially displacing the extension to mineralisation.
Subsequent work by Eskay Mining indicated the extension of the Lulu and Eskay Creek host felsic volcanic rocks underneath this fault, opening a large area for exploration by drilling.
"This property is 4km along strike from the prolific Eskay Creek mine, which produced over three million ounces of gold and nearly 160 million ounces of silver between 1994 and 2008."
Edmunds added: “At Silver Standard, we remain disciplined with our greenfields exploration activities and this agreement demonstrates we are ready to act when an extraordinary opportunity arises."
Under the agreement, Silver Standard will explore the SIB project during a three-year option period.Silver Standard can earn a 51% undivided interest in the SIB project from Eskay Mining, provided it satisfies certain conditions including completing a $300,000 private placement in Eskay Mining, and incurring a total expenditure of $11.7m on exploration over the three-year period.
SIB property is jointly controlled by Eskay Mining and St Andrew Goldfields, a fully owned subsidiary of Kirkland Lake Gold.
Eskay Mining and St Andrew Goldfields hold an 80% and 20% undivided interest respectively.
Upon earning a 51% undivided interest, Silver Standard can choose to form a joint venture with Eskay Mining and St Andrew Goldfields, otherwise, it can exercise a second option to increase its undivided interest by a further 9% by either undertaking a preliminary economic assessment or carrying out 23,000m of diamond drilling on the SIB project.