VANCOUVER, BC, Nov. 26, 2020 /CNW/ - Sun Metals Corp.
(TSXV: SUNM) ("Sun Metals" or "we" or the "Company") is
pleased to announce the closing of the acquisition of Teck
Resources Limited's ("Teck") 51% joint venture interest in the
Lorraine copper-gold project. Sun
Metals now owns 100% of the Lorraine project which is located in
northcentral B.C., just 40 kilometres north of the Company's 100%
owned Stardust project and 270 km northwest of the city of
Prince George, B.C.
The Lorraine project is host to
a precious metal enriched, alkalic porphyry copper system. Examples
of deposits with this style of mineralization in British Columbia include Galore Creek, New
Afton, and Mount Polley.
"Having full ownership of Lorraine is an important step forward as we
build a quality portfolio of high-grade copper-gold exploration
projects at Sun Metals. The Company now controls two high-grade
copper-gold projects in the area, both with excellent exploration
potential," stated Steve Robertson,
Sun Metals' President and CEO.
Pursuant to the terms of the acquisition, Sun Metals has issued
4,633,440 common shares of the Company to Teck with a fair market
value of $500,000 based on the
Company's 20-day VWAP of $0.108 per
share. The common shares are subject to a statutory four
month and one day hold, expiring March
26, 2021.
The common share issuance, together with the 13,039,546 common
shares currently held by Teck, will result in Teck holding
17,672,986 common shares or approximately 10.29% of Sun Metals
outstanding shares on a non-diluted basis. Teck may determine to
increase or decrease its holdings in Sun Metals depending on market
conditions and any other relevant factors. A copy of Teck's early
warning report may be obtained from Chris
Stannell at 604 699 4368.
Pursuant to the terms of the acquisition, Teck has also retained
a 1.0% NSR royalty on all claims that are not already burdened by a
royalty and a 0.25% NSR royalty on all claims that are subject to
existing royalties. In addition, Sun Metals will make the
following future payments to Teck in either cash or common shares
of the Company as follows:
- $500,000 payable on November 25, 2021; and
- $500,000 payable on November 25, 2022.
Sun Metals will also make milestone payments to Teck in either
cash or common shares of the Company as follows:
- $500,000 upon a Preliminary
Economic Assessment;
- $2,000,000 upon a Feasibility
Study; and
- $5,000,000 upon a construction
decision.
If Sun Metals sells or options all or a portion of the property
to a third party at any time during a 60-month period commencing
from the date of the acquisition agreement, Sun Metals will pay to
Teck 20% of the sale proceeds, net of exploration expenses incurred
on the property by Sun Metals following closing.
Lorraine Project Overview
The Upper Main, Lower Main and Bishop zones at Lorraine were the subject of a 2012, National
Instrument 43-101 – Standards of Disclosure for Mineral Projects
("NI 43-101") resource estimate published by Lorraine Copper Corp.
titled "Summary Report on the Lorraine-Jajay Property Omineca
Mining Division, B.C."1 with an effective date of
December 16, 2015. In that report,
Gary Giroux, P.Eng. a qualified
person as defined under NI 43-101 provided the following
estimate:
Resource
Category2
|
Tonnes
|
Copper
(%)
|
Gold
(g/t)
|
Indicated
|
6,419,000
|
0.61
|
0.23
|
Inferred
|
28,823,000
|
0.45
|
0.19
|
A qualified person as defined under NI 43-101 has not completed
sufficient work to classify the above historical estimate as a
current mineral resource. Sun Metals is not treating the
historical estimate as a current mineral resource.
The property is underlain by the Hogem batholith within the
Quesnel Trough. The Duckling Creek syenite occurs in the
Lorraine area as a multiple-stage
dyke swarm emplaced into the older Hogem calc-alkaline intrusive
rocks and Takla volcanic rocks. Copper-gold mineralization at
Lorraine is associated with the
Duckling Creek alkaline magmatism.
The mineralization at Lorraine
is typical of alkalic porphyry copper systems characterized by:
- High grades
- Strong gold +/- silver enrichment
- Multiple zones
Some of the highlight results from past drilling at the
Lorraine property include:
Table 1: Significant Historic Drill Results¹
Zone
|
Drill Hole
|
From
(m)
|
To
(m)
|
Length
(m)
|
Copper
(%)
|
Gold
(g/t)
|
Silver
(g/t)
|
Bishop
|
L96-43
|
69.2
|
203.9
|
134.7
|
0.59
|
0.11
|
-
|
Upper Main
|
L94-8
|
1.5
|
103.0
|
101.5
|
1.42
|
0.62
|
-
|
Lower Main
|
2001-60
|
32.8
|
146.0
|
113.2
|
0.76
|
0.49
|
-
|
Weber
|
04-82
|
3.1
|
112.0
|
108.9
|
0.69
|
0.07
|
-
|
Slide
|
JTM06-07
|
261.5
|
317.0
|
55.5
|
0.72
|
-
|
5.5
|
_____________________________
|
1 See
updated and amended NI 43-101 Technical Report entitled "Summary
Report on the Lorraine-Jajay Property Omineca Mining Division,
B.C." with an effective date of December 16, 2015, as amended July
22, 2016, which can be found on Lorraine Copper Corp.'s profile on
SEDAR at www.sedar.com.
|
2 The
cut-off grade used in the resource estimate was 0.2% copper
(Cu).
|
Technical aspects of this news release have been reviewed,
verified and approved by Ian Neill
P.Geo., Vice President Exploration of Sun Metals, who is a
qualified person as defined by NI 43-101.
An updated interactive corporate presentation is available on
Sun Metals' website
at https://www.sunmetals.ca/investors/presentation/.
On Behalf of the Board of Directors of
SUN METALS CORP.
Steve Robertson
Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
About Sun Metals
Sun Metals is advancing its 100%
owned flagship, high-grade Stardust Project located in northcentral
British Columbia, Canada. Stardust
is a high-grade polymetallic Carbonate Replacement Deposit with a
rich history. Sun Metals also now owns the Lorraine copper-gold project, and the OK
copper-molybdenum project.
The Canyon Creek copper-gold skarn zone at Stardust was the
subject of a 2018, NI 43-101 resource estimate published by the
Company titled "Stardust Project NI 43-101 Technical Report Omineca
Mining Division, British Columbia"
with an effective date of January 8,
2018. In that report, GeoSim Services Inc. provided the
following estimate. Stardust Project - Canyon Creek zone Mineral
Resource Estimate3:
RESOURCE
CATEGORY
|
TONNES
|
COPPER %
|
ZINC %
|
GOLD G/T
|
SILVER G/T
|
% CU
EQ3
|
Indicated
|
985,000
|
1.34
|
0.62
|
1.59
|
36.8
|
2.92
|
Inferred
|
1,985,000
|
1.24
|
0.14
|
1.72
|
30.5
|
2.65
|
Cautionary Note Regarding Forward-Looking Statements
All statements in this news release, other than statements of
historical fact, are "forward-looking information" with respect to
Sun Metals within the meaning of applicable securities laws,
including, but not limited to statements with respect to
mineralization at the Lorraine
project; mineralization at the Stardust project; relative size of
mineralization at the 421 zone, geophysical surveys, use of
instrumentation data, and goals and expectations pertaining to
metallurgical results; the 2020 program and the use of flow-through
dollars; the potential quantity and/or grade of minerals; the
growth potential of the Stardust project; planned mining methods
and mineral processing; break-even cost for the Stardust project;
British Columbia as a reliable
jurisdiction for mining; proposed timing of exploration and
development plans; potential conversion of inferred resources to
measured and indicated resources; potential extension and expansion
of mineral resources; the potential impact of the COVID-19
pandemic; and the focus of the Company in the coming months.
Forward-looking information is often, but not always, identified by
the use of words such as "seeks", "anticipates", "plans",
"continues", "expects", "projects", "predicts", "potential",
"targets", "intends", "believes", "potential", "budgets",
"schedules", "estimates", "forecasts" and similar expressions
(including the negative of such expressions), or describes a
"goal", or variation of such words and phrases or state that
certain actions, events or results "may", "should", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made including, among
others, assumptions about future prices of gold and other metal
process; currency exchange rates and interest rates; favourable
operating conditions; political stability; obtaining governmental
approvals and financing on time; obtaining renewals of existing
licences and permits and obtaining required licences and permits;
labour stability; stability in market conditions; availability of
equipment; accuracy of mineral resources; successful resolution of
disputes and anticipated costs and expenditures. Management
believes these estimates and assumptions are reasonable. In
addition, many assumptions are based on factors and events that are
not within the control of Sun Metals and there is no assurance they
will prove to be correct.
Such forward-looking information, involves known and unknown
risks, which may cause the actual results to be materially
different from any future results expressed or implied by such
forward-looking information, including, risks related to the
speculative nature of the Company's business; the Company's
formative stage of development; the Company's financial position;
possible variations in mineralization; conclusions of future
economic evaluations; business integration risks; changes in
project parameters as plans continue to be refined; current
economic conditions; future prices of commodities; fluctuations in
the securities market; fluctuations in currency markets; change in
national and local government, legislation, taxation, controls,
regulation and political or economic development; inability to
obtain adequate insurance to cover risks and hazards; possible
variations in grade or recovery rates; the costs and timing of the
development of new deposits; failure of equipment or processes to
operate as anticipated; the failure of contracted parties to
perform; the timing and success of exploration activities
generally; delays in permitting; possible claims against the
Company; the timing of future economic studies; labour and employee
disputes and other risks of the mining industry; delays in
obtaining governmental approvals, financing or the completion of
exploration; relationships with and claims by local communities and
First Nations; negotiations with the Takla First Nation;
assumptions about the effect of the Covid-19 pandemic; and title to
properties as well as those factors discussed in the Annual
Information Form of the Company dated April
1, 2020 in the section entitled "Risk Factors", under Sun
Metals' SEDAR profile at www.sedar.com.
Although Sun Metals has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
information, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended. There
can be no assurance that such information will prove to be accurate
as actual results and future events could differ materially from
those anticipated in such statements. Sun Metals disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise unless required by law. Accordingly, readers should
not place undue reliance on forward-looking information.
_____________________________
|
3 The
cut-off grade used in the resource estimate was 1.5% copper
equivalent (Cu Eq). Metal price assumptions for the Cu Eq
calculation in this table were $3.00/lb Copper, $1.25/lb Zinc,
$1,300/oz Gold and $18/oz Silver. Adjustment factors to account for
differences in relative metallurgical recoveries of the
constituents will depend upon completion of definitive
metallurgical testing. The following equation was used to calculate
copper equivalence: Cu Eq = Copper + (Zinc x 0.4167) + (Gold x
0.6319) + (Silver x 0.0087). A cut-off grade of 1.5% Cu Eq
represents an in-situ metal value of approximately $100/tonne which
is believed to represent a reasonable break-even cost for
underground mining and processing. These are not mineral reserves
and no work has been completed that demonstrates economic viability
at the Project.
|
SOURCE Sun Metals