Auteco Minerals (ASX: AUT) has revealed its intent to acquire up to 80% of the high-grade brownfield Pickle Crow gold project in Ontario, which historically produced 1.5 million ounces of the precious metal.
According to Auteco, the mine was one of Canada’s highest-grade gold operations with an average grade of 16 grams per tonne gold before it was closed in 1966.
Additionally, Auteco claims the project is within Cana’s most prolific gold mining districts.
Under the deal, Auteco has inked a binding term-sheet with TSX-listed First Mining Gold Corp to acquire up to 80% of the project which includes 190 square kilometres of tenements.
Auteco has paid C$50,000 to First Mining and has 45 to undertake due diligence and execute a formal agreement.
Once the formal agreement has been signed, Auteco make another C$50,000 payment and issue 25 million shares at $0.008 each.
To lock-in a 51% stake in the asset, Auteco must spend C$5 million on exploration over three years including C$750,000 in the first 12 months.
The company must then issue 100 million shares to First Mining.
After satisfying the 51% earn-in requirement, Auteco can secure up to 80% of the project in a further two stage involving C$4 million in cash payments and an additional C$5 million on exploration.
Pickle Crow gold project
Pickle Crow is 5km from the town of Pickle Lake giving it access to requisite infrastructure including grid power, year-round paved road access, shopping, hospitals and heavy equipment rental and a skilled workforce.
A 225 tonne per day gravity mill was constructed at the project in 2006, but never commissioned.
Additionally, offices and other core facilities are in “good condition” and facilitate year-round exploration at the project.
Auteco claims little modern exploration has been undertaken at the project since the mine was closed.
Historic exploration adjacent to the Pickle Crow underground mine has included 13.1m at 43.28g/t gold from 530.35m, 7.6m at 8.23g/t gold from 492.5m, and 2m at 9.05g/t gold from 102m.
Additionally, metallurgical analysis indicates the gold mineralisation is amenable to conventional processing with excellent recoveries about 98%.
The company plans to begin the asset’s first systematic exploration in more than 50 years with multiple walk-up drill targets.
As part of Auteco’s strategy to fast-track on ground exploration at the project, it has received firm commitments for a $1.2 million placement at an issue price of $0.008 per share, with directors to participate in about 40% of the raising.
Beefing up the board
To strengthen the board, Auteco will be appointing Ray Shorrocks as executive chairman and Steve Parsons as a non-executive director.
Incoming chairman Mr Shorrocks said he was “delighted” to be joining Auteco’s board.
He noted he was involved in one of Australia’s modern day high-grade discoveries with Bellevue Gold (ASX: BGL).
“From what I can see so far and along with the rest of the Auteco team is that the historic Pickle Crow gold project has the hallmark for being able to replicate significant discovery success again.”
News of the project acquisition spurred Auteco’s share price up 9% to trade at $0.012 mid-morning.