The acquisition of the Toughnut Project in British Columbia would provide strategic access to the Silver King Shear Zone adjacent to the explorer’s existing properties.
Prize Mining Corp. (PRZ:TSX.V), a junior miner that holds the Kena-Daylight project in southeastern British Columbia, just announced that it has signed an option agreement to acquire a 100% interest in the Toughnut property, which is contiguous to the west side of Daylight. The company is taking a district-wide approach to the area.
According to Prize Mining Corp., “the 1,010 hectare Toughnut claims strategically cover over 3.5km strike length of the Silver King shear including most of the mineralized land between Prize’s main Starlight-Daylight block and Prize’s Sand block to the northwest.”
Feisal Somji, president and CEO of Prize Mining stated, “This is a strategic acquisition for Prize Mining as we now control what we believe to be the most significant part of the mineralized Silver King shear zone. This parcel of land will play an important role in this summer’s exploration program as we prepare to drill this fall.”
Under the terms of the agreement, Prize will pay CA$150,000, issue 250,000 common shares and spend CA$750,000 on exploration over the next five years. There is a 2% net smelter royalty (NSR), of which Prize has the right to purchase one half for CA$2 million up to the date of commencement of commercial production.
Prize Mining reported that the Toughnut Showing, “which includes old pits, shafts and trenches, had grab samples from Pacific Sentinel in 1989 that returned 6.64 g/t, 8.65 g/t, and 32.8 g/t Au with associated silver ranging between 33 and 175 g/t Ag. Follow up diamond drilling by Valeterra Resource in 2010 returned a best intercept of 6.9 g/t Au and 143 g/t Ag over 2.0m, and 4.05 g/t Au over 8.0m in hole VTN10-005.”
The company also stated that the Gold Eagle Showing, which is located 500m north of the Toughnut Showing, “was drilled by US Borax in 1988 who reportedly returned a strongly anomalous intercept of 90 g/t Au over 1.53m (RC hole S88-43) (AR 19503). In 2010 Valterra Resources also drilled the property with its best results being 4.02 g/t Au and 9.52 g/t Ag over 24.33m (including 4.0m of 14.47 g/t Au and 3.46 g/t Ag). The zone has been tested to 73m and remains open and along strike and down dip.”
Prize Mining earlier reported that it had engaged TerraLogic Exploration to manage the 2017 Daylight exploration program. The company noted that the Daylight Property is a “contiguous land package located in the northwest corner of Prize’s approximately 8,000 hectare Kena Project. The Daylight Property hosts four historical producing gold mines: Starlight, Victoria, Great Eastern and Daylight. A detailed desktop compilation carried out by TerraLogic has identified and prioritized four highly prospective gold bearing zones based on previous field work including geochemistry, geophysics, prospecting, surface sampling, and limited diamond drilling.”
Veteran investor Chen Lin discussed Prize Mining in an article in The Gold Report on May 25, prior to the announcement of the option agreement: “I had a discussion with Prize Mining CEO Feisal Somji yesterday. If you recall, Mr. Somji built and sold Rio Alto during the recent downturn of the market. PRZ is his new baby, and it is a new kid in town for junior investors. PRZ has consolidated the district of Daylight in British Columbia for the first time. The company is going to drill the high-grade targets this summer. According to the historical mining results, the chance of high-grade discoveries (30-100 grams/ton gold over multiple meters) is high. Going forward, Mr. Somji plans to do ‘bulk sampling’ of the high-grade material starting in 2018, and send the samples to the Kinross mill nearby, which is running out of ore. This way he will be able to generate good cash flow to support building a mine there.”
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Source: Mining Silver