Metals Update 22/04/2021

Westhaven Gold grants options to buy 2.3 million shares

Westhaven Gold Corp. has granted 2,315,000 incentive stock options to directors, officers and consultants. The incentive stock options have an exercise price of 70 cents per share, are valid for a five-year period from the date of grant and are subject to regulatory approval.

The company’s stock option plan allows for the issuance of up to 10 per cent of issued and outstanding share capital in the form of incentive stock options. As a result of this grant, the company has 9,545,589 stock options issued, representing 7.6 per cent of the issued and outstanding share capital.

Arizona Metals closes $21-million private placement

Arizona Metals Corp. has completed its previously announced bought deal private placement offering of 10 million special warrants of the company at a price of $2.10 per special warrant for aggregate gross proceeds of $21-million, which includes the exercise in full of the underwriters’ option. The offering was conducted by a syndicate of underwriters co-led by Stifel GMP and Clarus Securities Inc., and included Cormark Securities Inc., Beacon Securities Ltd. and Agentis Capital Markets Canada Limited Partnership.

Each special warrant shall be deemed to be exercised for one unit in the capital of the company without any required action on the part of the holders (and for no additional consideration) on the date which is the earlier of (i) the second business day following the date on which a final receipt is obtained from the Ontario Securities Commission, as principal regulator on behalf of the securities regulatory authorities in each of the qualifying jurisdictions (as defined herein), for a (final) short form prospectus qualifying for distribution the units underlying the special warrants; and (ii) 5 p.m. (Toronto time) on Aug. 23, 2021.

Each unit consists of one common share and one-half of a common share purchase warrant. Each warrant entitles the holder thereof to purchase one common share of the company at an exercise price of $3 (subject to adjustment as per the penalty provision defined herein) until April 22, 2022.

The company has agreed to use its commercially reasonable efforts to qualify the units for distribution in all provinces in Canada, except Quebec, and to obtain the final receipt therefor on or prior to July 2, 2021. In the event the qualification date has not occurred on or before July 2, 2021, the exercise price of each warrant shall be reduced to $2.47 per common share.

In connection with the offering, the underwriters received: (i) a cash commission of 6 per cent of the gross proceeds of the offering, excluding gross proceeds from the issuance of units on a president’s list agreed upon by the company and the underwriters, for which a commission of 3 per cent of such gross proceeds was paid by the company to the underwriters; and (ii) 525,442 non-transferable compensation warrants, being equal to 6 per cent of the aggregate number of units sold under the offering, excluding those units sold to subscribers on the president’s list, for which the underwriters were issued compensation warrants equaling 3 per cent of the aggregate number of units sold to participants on the president’s list. Each compensation warrant is exercisable into one unit of the company at a price of $2.10 per unit until April 22, 2022.

Proceeds from the offering will be used primarily to finace the 75,000-metre phase 2 exploration drill program at the company’s Kay mine project and general working capital purposes. The offering is subject to final approval by the TSX Venture Exchange.

Kootenay Silver continues drilling at Copalito

Drilling is proceeding as scheduled at Kootenay Silver Inc.’s Copalito silver-gold project, located in Sinaloa state, Mexico. To date, the company has completed 1,600 of the planned 3,500 metres over 19 shallow drill holes, ranging from 50 metres to 160 metres in depth. As previously announced in the company’s news release dated April 15, 2021, related to the Columba property, laboratory delays for assay turnaround time has been longer than expected, causing result announcement delays.

The program is a follow up to last year’s maiden drill program along the five principal veins. Notable drill results from 2020 program included:

BDH-20-004 (5 Senores Vein)

2,843.1 silver equivalent (“AgEq”); 2,830 gpt silver and 0.145 gpt gold over 1.0 meters, includes:

1,322.65 gpt AgEq; 1,297 gpt silver and 0.285 gpt gold over 3.2 meters and

BDH-20-015 (Pilar Vein)

110.60 gpt AgEq; 40 gpt silver, 0.482 gpt gold, 1.2% Pb+Zn over 7.0 meters, includes:

394 AgEq; 51 gpt silver, 2.28 gpt gold, 6.18 % Pb+Zn over 1.2 meters

BDH-20-033 (Pilar Vein)

215.27 gpt AgEq; 101 gpt silver, 0.7 gpt gold, 2.28 % Pb+Zn over 2.7 meters includes:

1,209.59 gpt AgEq; 59 gpt silver, 7.05 gpt gold, 13.55 % Pb+Zn over 0.2 meters.

BDH-20-040 (5 Senores Vein)

1,813 gpt AgEq; 16.95 gpt gold, 369 gpt silver and 3.74% lead plus zinc over 0.51 meters within

933 gpt silver AgEq; 6.65 gpt gold, 335 gpt silver and 2.6% lead plus zinc over 2.25 meters; and

311 gpt silver AgEq; 2.09 gpt gold, 124 gpt silver and 0.795% lead plus zinc over 9.05 meters.

The Program has focused primarily on the 5 Senores vein, with drilling now stepping out to test the Agua and Chiva Veins. The Company will announce results when received and compiled.

Atac samples 2.08 g/t Au, plans drilling at Goldfield

Atac Resources Ltd. has provided an update on exploration activities at its road-accessible East Goldfield property, located in the Goldfield mining district of Nevada. The Goldfield mining district has a reported historical gold production of 4.2 million ounces at a grade of 18.55 grams per tonne.

The Property hosts the historical Tom Keane mine, where shallow reverse circulation drilling by a previous operator, subsequent to limited underground mining, returned 22.86 m of 2.88 g/t gold and 44.20 m of 1.03 g/t gold.

East Goldfield Highlights:

  • Phase 1 first-pass prospecting identified 4 new gold-bearing targets outside of the historical Tom Keane mine, within a 1,200 x 800 m priority area;
  • Rock chip sampling across newly identified epithermal alteration zones, historically called “quartz ledges”, returned up to 2.08 g/t gold over 3 m approximately 1.1 km west-northwest of the Tom Keane mine;
  • Soil sampling on recently staked claims identified additional new gold-in-soil anomalies with values up to 424 ppb gold;
  • Phase 2 prospecting is underway with field crews currently on site; and
  • Contract secured for a 4,000 m RC drill program scheduled to begin in August.

“We are excited by these first pass prospecting results from East Goldfield,” stated President and CEO, Graham Downs. “Work to date indicates we are at the top of an extensive high sulphidation epithermal (“HSE”) system, and we are optimistic that like elsewhere in the Goldfield district, gold response will be even stronger at depth. Importantly, these results confirm there is significant gold present in multiple widespread HSE alteration zones, and we look forward to drill testing these targets this summer. Crews are back on site now conducting prospecting at the new soil anomalies, following up on the phase 1 rock results and siting drill locations.”

The phase 1 prospecting program consisted of 213 rock and chip samples, with results ranging from below detection to 2.08 g/t gold. Broad ridge and spur sampling was conducted in addition to focused work at soil anomalies, quartz ledges, and historical trenches. This work focused on a 1,200 x 800 m priority area defined by anomalous gold-in-soil response coincident with HSE alteration minerals (alunite, dickite, pyrophyllite) observed in an airborne hyperspectral survey.

Chip sampling across this priority area identified three distinct quartz ledge systems, returning up to 2.08 g/t gold over 3 m, 1.28 g/t gold over 3 m, and 1.10 g/t gold over 2 m. Chip sampling across historical trenches returned up to 1.58 g/t gold over 3 m on a separate ledge 130 m north of the Tom Keane mine. Rock samples collected from the mine waste pile returned up to 1.83 g/t gold.

The follow-up soil sampling program included a total of 337 soil samples, with results ranging from below detection up to 424 ppb.

Drilling

A contract was recently secured with a local contractor for a 4,000 m RC drill program scheduled to begin in August. The proposed work program will fall within the limits of an exploration notice, which will be filed shortly. Work will include:

  • Drilling nearby the historical Tom Keane mine, where Metallic Ventures Gold Inc. reported 22.86 m of 2.88 g/t gold and 44.20 m of 1.03 g/t gold in 2003; and
  • Regional drilling to test priority targets identified by prospecting work.

Continuing fieldwork is being conducted by local US-based consultants and no impacts or delays are anticipated as a result of the global COVID-19 pandemic.

East Goldfield Geology and Mineralization

The Goldfield Mining District is situated within the northwest trending Walker Lane structural belt where gold mineralization is dominantly constrained by a set of west-northwest strike-slip faults and orthogonal northeast striking normal faults.

The Property hosts favorable volcanic rocks referred to as the Goldfield dacite and Milltown andesite; the main host rocks of the nearby Gemfield project. These rocks are uncomformably overlain on the Property by a volcanic breccia, which displays extensive and coincident alunite, kaolinite, pyrophyllite, dickite and vuggy, leached silica alteration, a diagnostic assemblage of HSE deposits.

The Property is under option from Silver Range Resources Ltd. Atac can earn up to a 100% interest in the Property under a two stage option agreement. For more information, see news release dated February 25, 2020.

HPQ’s NSiR production rate reaches 50 kg/month in tests

HPQ-Silicon Resources Inc., through its wholly owned subsidiary, HPQ Nano Silicon Powders Inc., has updated its shareholders on the recent milestones achieved by the first-generation Purevap nano-silicon reactor (NSiR) process validation and optimization tests. The continuing tests are conducted by the technology provider PyroGenesis Canada Inc., as per the agreement announced on Aug. 18, 2020.

Production rate

The first-generation Purevap NSiR test bed is a batch process system with an originally targeted design output production rate of 30 kilograms per month of nano-silicon powders. The first-generation NSiR recently achieved a production rate equivalent to 50 kilograms per month of nano powders, a result that exceeded the design output by 67 per cent. The significance of this is twofold:

  1. Expectation of greater throughput than originally planned for the commercial tests;
  2. Expectation of reduced unit costs and production costs as a result of increased throughput.

Production rate: key to commercial viability of nano-silicon materials

NSiR test-bed work results to date leads the company to conclude that the second-generation NSiR semi-continuous proof of commercial scalability system will be able to have an ultimate monthly increased production rate of 500 kilograms per month (or approximately six million tonnes per year) of nano-silicon powders or nano-wires. This is substantially greater than the originally stated 300 kilograms per month (or approximately 3.5 million tonnes per year) mentioned in HPQ’s press release dated Aug. 18, 2020.

“HPQ Nano gen-1 Purevap NSiR testing program is moving forward, and we are very pleased that, with each test completed, we are reaching new operational milestones exceeding our original expectations. With these new results, HPQ Nano is confident that it can achieve the desired nano-silicon material for batteries, which will be cost competitive with graphite,” said Bernard Tourillon, president and chief executive officer of HPQ-Silicon. “With the use of silicon in battery anodes expected to increase from less than 5 per cent today to over 30 per cent by 2030, HPQ Nano is very well positioned to become the nano-silicon provider of choice for the industry. HPQ’s silicon R&D consortium continues to strive for cost-effective ways of increasing the silicon contained in batteries.”

Process validation and optimization tests are generating valuable data

The continuing tests are crucial as they allow PyroGenesis to progress on the project while identifying and resolving normal research and development issues systematically. The main segments of the continuing process validation and optimization tests can be summarized as follows:

  1. Validation that the system can produce less than 150 nanometres of nano materials;
  2. Validation that the system can reach its design production parameters;
  3. Production of qualified samples.

The continuing tests have achieved significant results and have generated extremely valuable information that will be applied to future developments. Despite the difficulties of operating under the stress of COVID-19, PyroGenesis’s team has achieved outstanding results while maintaining strict and new operating procedures to protect all of its staff from the effects of the virus. In addition, several unexpected issues occurred during the conversion of the second-generation Purevap quartz reduction reactor into the first-generation Purevap NSiR, which modelling and computer simulation did not foresee. These were overcome by the professional team at PyroGenesis. The results also demonstrated that the company’s Purevap QRR has a unique ability to produce a low-cost HPQ battery-grade silicon for less than commercially available metallurgical-grade silicon.

Since the start of the testing program, the company has demonstrated the following positive results from the Purevap NSiR process:

  1. Production of nano-silicon powders of less than 150 nanometres, the threshold above which silicon fracturing occurs:
    1. Further efforts will focus on improved measures and controlling the size distribution of the company’s material, a critical criterion for battery manufacturers.
  2. Production rate achieved exceeded the original goal:
    1. Continuous process improvements to further increase the production capacity and thereby reduce future commercial production cost.

Once the final equipment modifications are completed, the goal of the program will be to produce qualified samples, which will then be tested by a third party, the Institut National de Recherche Scientifique (INRS), and subsequently to awaiting battery manufacturers and automobile manufacturers.

“As experts in successfully taking lab-scale concepts to commercialization, we can confirm that these results not only demonstrate that we are on the right track but that the project is progressing as expected,” said P. Peter Pascali, president and CEO of PyroGenesis. “It is even more exciting when one considers the impact this could have on addressing the challenges facing the EV battery space. We are proud to be using our plasma expertise in support of, and advancing, green initiatives.”

Eskay Mining begins SkyTEM survey at Consolidated Eskay

Eskay Mining Corp. has commenced its 2021 exploration program with a propertywide SkyTEM survey across its 100-per-cent-owned Consolidated Eskay precious-metal-rich volcanogenic massive sulphide project in the Golden Triangle in British Columbia.

SkyTEM is a powerful helicopter supported electromagnetic technique that differentiates electrically resistive and conductive rocks in the subsurface. It is particularly helpful in recognizing areas of relatively conductive altered and sulphide-bearing rocks associated with stockwork VMS mineralization. Both the TV and Jeff targets that were successfully drilled by Eskay in 2020 stand out as discrete conductive features in a small SkyTEM test survey conducted last season (Figure 1). Many more as yet undrilled anomalies were identified by that survey.

Eskay is confident that this property wide survey will reveal additional targets, particularly in areas where stream sediment sampling has identified robust gold anomalism (please refer to the Company’s News Release dated February 25, 2021 for further details). This survey will be conducted and processed well in advance of the 2021 field season. Therefore, anomalies that are identified can be field checked early in the season. Some may prove to generate drill targets like those identified at TV and Jeff last season.

"Eskay Mining has one of the most aggressive exploration programs planned for 2021 that I have seen in my career," commented Dr. Quinton Hennigh, director and technical advisor to Eskay Mining. "Our work in 2020 gave us a taste of the excellent potential of this property. Our test SkyTEM survey in 2020 demonstrated its very high value in identifying potential altered and sulfidized areas associated with VMS mineralization. Our VP Exploration, Dr. DeDecker, recently concluded that the entire Hazelton Group is prospective for VMS mineralization and that this unit underlies much of the property. Therefore, this year, we are taking off the blinders and collecting this data across the entire property. We are very eager to see what new targets we might have."

Dr. Quinton Hennigh, P. Geo., a Director of the Company and its technical adviser, a qualified person as defined by National Instrument 43-101, has reviewed and approved the technical contents of this news release.

Canada Ni to acquire full interest in optioned claims

Canada Nickel Company Inc. has entered into a binding letter of intent with Noble Mineral Exploration to acquire the properties previously optioned by the company plus additional claims held by Noble. Under the terms of the Transaction, the current option agreements with Noble will be terminated and Canada Nickel will acquire 100% of the optioned claims and other interests in return for 3.5 million of the Company’s common shares.

Mark Selby, Chair and CEO of Canada Nickel said, “Today’s announcement achieves several objectives for us. This acquisition provides us with 100% ownership of our five option properties, adds a sixth property, and allows us to both expand and consolidate Crawford’s overall footprint, which is an important step given the scale of the contemplated operation. This acquisition effectively consolidates all of the key nickel targets within Noble’s Project 81 land package allowing Noble to focus on the multiple gold/VMS targets in its remaining substantial land package. The transaction also provides Canada Nickel an ability to buyback a portion of the royalties that are available on certain properties.”

Mr. Selby continued, “The coming month will be one of the most exciting to date in our short company history. We will receive results from our drilling on the Crawford extensions as assay backlogs finally begin to clear, receive our first results from exploration targets at MacDiarmid, and finalize and release our PEA results in advance of a conference call on May 20th, 2021 at 10am EDT to discuss these results in more detail.”

Transaction Summary

Under the terms of the binding letter of intent Canada Nickel has agreed to issue 3.5 million of its common shares to Noble in return for:

  • A 100% interest in the previously optioned claims (see press releases dated July 13, 2020 and April 9, 2021) plus additional claims, including in respect of the prospective Bradburn/Dargavel property.
  • The right to re-purchase 1% (half) of the 2% royalty held by Noble in respect of certain properties for a re-purchase price of $1.5 million per property if re-purchased during the one-year period after closing, increasing to $2.5 million per property if re-purchased during the second year after closing, and increasing to $5 million per property if re-purchased after such second year after closing.

The transaction is subject to completion of final documentation and approval from the TSX Venture Exchange.

Once the transaction is complete, Canada Nickel will own 100% of six additional properties – Crawford/Nesbitt/Aubin, Nesbitt North, Aubin/Mahaffy, Kingsmill/Aubin, MacDiarmid and Bradburn/Dargavel; all located in close proximity to the flagship 100% owned Crawford property north of Timmins, Ontario. Please refer to the diagram below. For reference, the press release dated July 13, 2020 provides technical overviews of the five original properties.

Bradburn/Dargavel target

The newest property in Bradburn and Dargavel townships includes 3,553.71 hectares of patents and 11,438.1 hectares of mining claims. The property hosts a series of very large ultramafic units striking east-west that have been mapped for a distance of 10 kilometres. These townships have been relatively unexplored, but historical drilling in the 1960’s by Inco Limited in Dargavel township encountered 590 feet of serpentinized peridotite in hole 25014 grading 0.24% nickel with local assays up to 0.40% nickel and 287 feet of serpentinized peridotite in hole 28479 (no assays reported).