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

Dunnedin Ventures Inc. April 18 announced that it has raised C$2.08 million to further exploration of its Kahuna diamond project in Nunavut and has received conditional approval from the TSX Venture Exchange to spin out Solstice Gold Corp., which will be exploring the gold potential that has been identified at Kahuna.

The money raised by Dunnedin included the issuance of 5.34 million non-flow-through units at C30 cents each and 250,000 flow-through units at C40 cents each. All units include one Dunnedin share and half of a purchase warrant, with each whole warrant exercisable for another share – non-flow-through warrants are exercisable at 35 cents per share and flow-through units are exercisable at C47 cents per share.

Flow-through shares are provided under a provision of Canada's Income Tax Act that allows mineral exploration companies to transfer exploration expenses to individual investors that purchase the flow-through 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.

In addition to the money raised through the private placement, Dunnedin received C$378,124 through the exercise of share purchase warrants in recent weeks.

The company said the money raised will be used primarily to extend this year’s diamond exploration at Kahuna.

Two kimberlites on the property – Kahuna and Notch – hosts 4.02 million carats of diamonds in 3.99 million metric tons of inferred resource averaging 1.01 carats per metric tons.

The kimberlites in the resource are exposed at surface and remain open to extension along strike and at depth.

Overall, Dunnedin has defined more than 30 drill targets to test for diamondiferous kimberlite, 17 of which are scheduled to be drilled during the spring exploration program, currently underway.

“We look forward to advancing our exploration program at the Kahuna diamond project and testing a comprehensive suite of priority drill targets,” said Dunnedin CEO Chris Taylor. “The first phase of drilling is currently under way and we expect the diamond recovery results in Q2 and Q3 (second and third quarters). These results will inform the prioritization of further drill targets and we are now funded to add a second phase of drilling in the summer.”

Solstice Gold

Exploration at Kahuna has identified gold potential on this property that is only about seven kilometers (4.4 miles) from Agnico-Eagle Mines’ Meliadine gold deposit.

To explore this gold potential, Dunnedin has spun out Solstice, a gold-focused exploration company with full rights to 66 claims and 50 percent of 12 other claims covering the larger Kahuna project.

In 2016, Dunnedin acquired a proprietary property-wide geophysical and geochemical dataset and, in conjunction with its own data, prepared a property-wide compilation. The company estimates this gold-focused database and landholding would cost more than C$7 million (in 2017 dollars) and several years to replace.

Magnetic geophysical surveys conducted at Kahuna outline numerous extensive regional magnetic trends which indicate the potential for geological and structural hosts similar to those at Meliadine.

Sampling at Kahuna last year returned up to 34.9 grams per metric ton gold in boulders, up to 8.8 g/t gold in bedrock and seven elevated gold in till target areas.

Solstice said seven regional target areas have been identified which will be aggressively followed up in 2018.

One such target area – Far North – has an extensive and locally folded area of quartz veining that is three to five meters thick and extends for more than 3,000 meters. Limited sampling over the Far North target area has identified up to 0.48 g/t gold and associated, and gold grain in till from a local source.

With the TSX Venture exchange listing nearly complete, Solstice is making plans for its upcoming exploration at Kahuna.

“We look forward to building shareholder value as we embark on our 2018 exploration program at our highly prospective Kahuna gold project for which we plan to provide an update on in the short term,” said Solstice Gold Executive Chairman David Adamson.

–SHANE LASLEY