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

Lundin Mining Corp. has agreed to invest AU$4.3 million (US$3 million) to acquire 14.3 percent of PolarX Ltd. shares, a deal that gives the Canada-based miner an option to earn a 51 percent interest in the Australia-based junior's Stellar copper-gold project in Alaska.

Lundin Mining is a global base metals miner with copper, nickel and zinc operations in Chile, United States, Portugal and Sweden. The Toronto, Ontario-based miner also holds a 24 percent stake in the Freeport Cobalt Oy business, which includes a cobalt refinery in Finland.

"We are delighted to have attracted an investor and potential project partner with the demonstrated financial, technical, commercial and operational capability that Lundin Mining provides," said PolarX Managing Director Frazer Tabeart.

As part of the deal, PolarX has subdivided its Alaska Range property into three projects – Stellar, Zackly Skarn and Caribou Dome.

Stellar encompasses the porphyry copper-gold targets that have been identified on the Stellar project PolarX acquired from Millrock Resources Inc., excluding a block of claims covering the Zackly skarn deposit.

Zackly hosts 3.4 million metric tons of inferred resource averaging 1.2 percent (90.4 million pounds) copper, 2 grams per metric ton (213,000 oz) gold and 14 g/t (1.5 million oz) silver, according to an Australian Joint Ore Reserves Committee- (JORC) resource calculated in 2017.

Caribou Dome, a roughly 14-mile-long property immediately southwest of Stellar, hosts 1.6 million metric tons of near-surface JORC-compliant resource (measured, indicated and inferred) averaging 3 percent (107.8 million lb) copper; and 1.2 million metric tons of underground mineable resource averaging 3.2 percent (82.3 million lb) copper.

Lundin eyes porphyries

The money Lundin invested to acquire 53.44 million PolarX shares is to be used on evaluating porphyry copper-gold targets at Stellar.

Porphyry deposits are very large mineralized systems that currently account for more than half of global copper production and are an increasingly important source of this useful metal. In addition to copper, porphyries tend to carry gold, molybdenum, rhenium and other metals.

There are indications that Stellar could host multiple porphyry deposits, the two most compelling are Saturn and Mars.

"Our porphyry copper-gold targets at Saturn and Mars are compelling opportunities of significant scale and we look forward to a major exploration campaign in 2019 with Lundin Mining's input," said Tabeart.

These porphyry targets bookend a 7.5-mile (12 kilometers) structural corridor that runs through the Zackly skarn deposit.

While testing southeast extensions of Zackly, the 2018 drill program encountered signs that PolarX was closing in on porphyry mineralization as it stepped out in the direction of Saturn.

ZX‐18020, drilled about 850 meters east of the resource boundary, cut 54.6 meters averaging 2.8 g/t gold, 9.4 g/t silver and 0.6 percent copper, including a 0.3-meter (one foot) section from 56.7 meters averaging 27.3 percent copper, 2.5 g/t gold and 82.5 g/t silver.

This evidence was bolstered by the initial data from a high‐resolution aeromagnetic geophysical survey flown last fall, which showed that Saturn has the donut-shaped magnetic pattern typical of a porphyry deposit.

A 2,000- by 1,500-meter copper-gold-molybdenum soil anomaly at Mars, coupled with an induced polarization (IP) geophysical anomaly identified 100 to 150 meters below the surface, provides intriguing evidence of another potential porphyry gold-copper system to the northwest of Zackly.

This year's investigation of these porphyry targets will be decided by a joint exploration committee that will include three Lundin Mining members and two PolarX members.

After taking a look at what the 2019 exploration turns up, Lundin will have the option to earn a 51 percent interest in Stellar by investing US$24 million in the project and making US$20 million in payments to PolarX over the following three years.

On completion of the earn‐in, Lundin can elect to form a 51-49 joint venture with PolarX.

"Our goal is to provide enough information by the end of this field season to enable Lundin Mining to exercise its option to enter the JV earn‐in phase on the Stellar property," said Tabeart.

Lundin Mining will be the manager of the JV.

Expanding Zackly

In addition to its deal with Lundin, PolarX intends to raise up to an additional AU$4.25 million (roughly US$3 million) to explore Zackly and Caribou Dome, as well as general working capital.

Zackly is expected to be the primary target of the exploration carried out with the money raised through the entitlement offer, which involves the issuance of securities that can't be transferred.

PolarX would like to build enough metals inventory to support a feasibility study for an economically viable mining operation at Zackly.

While the main skarn body that hosts the currently calculated resource was expanded last year and shows potential for further expansion, especially at depth, the most exciting expansion area is to the east.

ZX‐18020, the hole that provided evidence of a porphyry at Saturn, tapped a thick layer of shallow, sub‐horizontal and high-grade gold mineralization that shows the potential for low cost open‐pit mining

Kyle Negri, Millrock Resources Inc.

Core from ZX‐18020, a hole that tapped a thick zone of high-grade copper-gold-silver mineralization about 850 meters east of the Zackly Skarn resource, an area not part of the option agreement with Lundin Mining.

ZX‐18024, drilled about 40 meters north of hole 20, cut 46.7 meters of 3.1 g/t gold, 0.6 percent copper and 3.3 g/t silver from a depth of 37 meters. This thick intercept included a 21.7-meter higher grade zone that averaged 5.2 g/t gold, 0.8 percent copper and 4.1 g/t silver from 59 meters.

The 2018 program also hit the skarn between the eastern boundary of the resource and hole 20, indicating that continued drilling could trace a connection.

Hole ZX-18023, drilled 350 meters east of the currently defined Zackly deposit and 500 meters west of ZX-18020, cut 9.3 meters of magnetite skarn containing 3.3 percent copper, 2.3 g/t gold and 19.7 g/t silver.

ZX‐18025 cut 11.4 meters of skarn mineralization with visible copper sulfides about 40 meters below ZX-18023.

Drilling east of the resource boundary could also continue to trace Zackly closer to Saturn, where Lundin-funded exploration will be looking for a large porphyry body that is likely related to the skarn.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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