North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Aston Bay Holdings Ltd. Dec. 29 said it has raised initial funds for a planned 2018 drill program at its Aston Bay copper and zinc property in Nunavut.

The first tranche of a planned C$4 million, which was closed on Dec. 28 to capture flow-through tax effects for 2017, involved the issuance of 3.975 million flow-through shares at C16 cents per share, for a total of C$636,000.

Under Canada's Income Tax Act, a flow-through financing allows mineral exploration companies to transfer their exploration expenses to individual investors that purchase the shares. Most exploration companies do not generate revenues, so they do not need the tax write off, however, the flow-through investor can apply his portion of the exploration expense to reduce or eliminate his tax liability. The exploration company must spend the flow-through dollars raised on a qualifying mineral project in Canada within two years of closing the financing.

Aston Bay plans to use the proceeds from its flow-through financing on advancing the Storm copper and Seal zinc projects on its Aston Bay property in Nunavut.

In December, the company published an updated resource estimate for Seal based on drilling carried out by Cominco in 1995-96 and Noranda in 2001.

At a 4 percent cutoff grade, Seal hosts 1 million metric tons of inferred resource averaging 10.24 percent (227 million pounds) zinc and 46.5 grams per metric ton (1.5 million ounces) silver.

"This initial mineral resource estimate for the Seal zinc deposit demonstrates the potential for high-grade zinc deposits on our Aston Bay property," said Aston Bay CEO Thomas Ullrich. "The property is already known for its prospectivity for copper mineralization, based on the multiple mineralized zones present at the Storm copper prospect."

Situated about 30 kilometers (19 miles) southeast of Seal, Storm is a strata-bound and structurally-hosted copper zone of mineralization.

Highlights from historical drilling at Storm include: 110 meters of 2.45 percent copper from surface; 56 meters of 3.07 percent copper from a depth of 12.2 meters; and 49 meters of 1.79 percent copper from surface.

Aston Bay believes that the fluids responsible for both Storm copper and Seal zinc may have mineralized other permeable horizons that remain concealed at depth. As such, the known surface expressions of mineralization at Storm and Seal may be indications of other, potentially larger, zones of mineralization concealed within the flat-lying sediments on the Aston Bay Property.

Aston Bay commissioned a Falcon Plus Airborne Gravity Gradiometry survey, a geophysical technique that measures minute differences in the earth's density to yield information on underground geologic structures, to help identify potential areas of concealed mineralization.

All three areas surveyed – Seal, Storm and Typhoon Zinc – returned strong gravity responses that will be evaluated in detail by the company's geological and geophysical team prior to selecting targets for a drill program planned for this summer.

Ullrich said the Aston Bay team "encouraged by the potential for discovery of additional blind mineralization at both Seal zinc and Storm copper, as well as potential blind mineralization elsewhere on the property."

–SHANE LASLEY