Darnley Bay cuts deal for BC copper project
Last updated 9/11/2016 at Noon
Darnley Bay Resources Ltd. Sept. 1 said it has entered into an agreement to acquire full ownership, subject to a royalty, in the Nak copper-gold project, located 80 kilometers (50 miles) northeast of Smithers, B. C. Located in the Babine Lake area of central British Columbia, the road-accessible Nak project occurs in a copper-gold porphyry belt that includes the former Bell and Granisle mines, the Morrison deposit and numerous other advanced prospects.
Together Bell and Granisle produced 130 million metric tons of ore grading 0.4 percent copper and 0.15 grams per metric ton gold.
The Nak property was originally explored by Noranda in the 1960s and 1970s and more recently by a number of junior exploration companies through the mid-1990s.
Highlights from historical drilling at Nak include 70.7 meters grading 0.25 percent copper and 1.17 g/t gold; 12.5 meters grading 2.61 percent copper and 0.14 g/t gold; and 18 meters grading 1.32 percent copper and 0.2 g/t gold.
A geophysical survey completed by Copper Ridge Exploration Inc. in 2008 identified a low chargeability and high magnetic susceptibility zone interpreted to be associated with the gold-rich mineralization at Nak's Southern zone.
A single hole drilled in the Southern zone during 2008 returned 0.115 percent copper and 0.257 g/t gold across the entire 316.5 meters from the surface to the bottom of the hole.
To acquire Nak, Darnley Bay has agreed to pay prospector Bernie Kreft C$150,000 in cash over five years.
The company has also agreed to pay bonus payments of C$25,000 on 1,500 meters of drilling; another C$25,000 upon 3,000 meters of drilling; and an additional C$125,000 and 250,000 common shares will be payable upon a total of 10,000 meters of drilling.
Darnley Bay may elect to pay C$250,000 in cash, or pay a combination of shares and cash equivalent of C$250,000, in lieu of the obligation to issue the 250,000 shares.
Darnley Bay has a work commitment of C$25,000 to be completed by the end of May 26, 2017, and a total of C$500,000 by the third anniversary of the agreement.
Kreft will retain a 2 percent net smelter royalty, 62.5 percent of which can be purchased for C$1.5 million.
Darnley Bay said this transaction is consistent with its strategy to acquire interests in several base metal deposits at or near the feasibility stage.
In March, the company announced an option to acquire the Davidson molybdenum deposit near Smithers, and in May, the explorer entered an option to acquire the Clear Lake zinc project in Yukon Territory.