Power Ore Inc. (TSX-V: PORE) is pleased to announce that it has entered into an agreement to acquire a 100% interest in the Opemiska Copper Mine Complex from Explorateurs-Innovateurs de Quebec Inc. (“Ex-In”), a privately owned company. The Opemiska Copper Mine Complex consists of two past producing underground mines in Springer and Perry and neighbours the town of Chapais, Quebec. Falconbridge operated the Opemiska Copper Mine Complex from 1953 to 1991 when it produced a total of 23 million tonnes at 2.4% copper, 0.3 gpt gold.
“We are excited to announce this transformative acquisition as we see it having excellent value for our shareholders. This is a great opportunity for all stakeholders in that the Opemiska Copper Complex has the potential to be fast tracked given its jurisdiction, infrastructure, location and a host of other advantages. Another key point for this acquisition is Opemiska’s database, which is a proverbial gold mine of data which we will utilize to determine the potential for an open pit mining scenario in what was originally a high grade underground mine. Opemiska is a storied mine as it was Falconbridge’s main copper producer for many years. We have been looking for exposure to copper and other metals that we believe will benefit from the demand in metals needed for electric vehicles, renewable power and global electrification in general. We are bullish on copper fundamentals driven by increasing demand from traditional uses, as well as the increasing demand from electric vehicles and renewable energy technology like solar and wind. Additionally, having a presence in the Chibougamau region, historically renowned for its mineral wealth, as well as being in Quebec, opens up strategic opportunities for Power Ore,” said Stephen Stewart, Power Ore CEO.
About Opemiska Copper Mine Complex
The Opemiska project is located adjacent to the town of Chapais, Quebec within the Chibougamau region. Opemiska is also within the Abitibi Greenstone belt and within the boundaries of the Province of Quebec’s Plan Nord which promotes and funds infrastructure and development of natural resource projects. The project consists of 11 mining claims and covers the past producing Springer & Perry mines which were owned and operated by Falconbridge. The project has excellent “in place” infrastructure including a powerstation and direct access to Highway 113 and the Canadian National Railway.
Opemiska was mined by Falconbridge as a high-grade underground mining operation, and was in production for over 35 years prior to Ex-In acquiring the property in 1993.
Falconbridge operated the Opemiska Copper Mine Complex from 1953 to 1991 and produced a total of 23 million tonnes at 2.4% copper, 0.3 gpt gold. The Springer mine produced over 650 million pounds of copper (329,307 tonnes) at 2.54% copper and more than 200,000 ounces of gold at 0.48 gpt gold, while the Perry mine produced over 385 million pounds of copper (198,018 tonnes) at 2.19% copper, and more than 5,800 ounces of gold at 0.02 gpt gold.
Under Ex-In’s ownership, considerable resources went into digitizing all of the historical data acquired from Falconbridge, as well as conducting further prospecting, geophysical exploration and drilling. In 2010, Ex-In conducted a drill program consisting of 20 holes for 5,700 metres, showing further exploration potential on the property. In 2013 and 2014, RPA was commissioned for an evaluation of the geologic potential and a target resource for the Springer and Perry mines. The study yielded a potential between 16 and 33 million short tons (14.5 and 30 million tonnes), grading 1.0% to 1.4% copper, and 0.012 to 0.020 oz/ton gold (0.41 to 0.69 gpt gold) for Springer and a further potential at Perry of between 0.5 and 1.4 million short tons (0.4 and 1.3 million tonnes) between 1.0 and 1.5% copper. Additionally, RPA delineated a potential underground target at Perry of between 3 and 11 million short tons (2.7 and 10 million tonnes) grading between 1.5 and 2.5% copper. Since the RPA reports, Ex-In completed further diamond drilling (13 holes totaling 1,250 metres) as well as trenching and geophysical surveys.
QP Statement and Note on Exploration Targets
The technical information contained in this news release has been reviewed and approved by Charles Beaudry, P.Geo and géo., Director and Vice President Exploration for Power Ore, who is a Qualified Person as defined in “National Instrument 43-101, Standards of Disclosure for Mineral Projects.” The potential tonnage and grade of these targets are conceptual in nature. There has been insufficient exploration to define them as mineral resources and it is uncertain if further exploration will result in the targets being delineated as mineral resources. Power Ore advises that no one should consider these targets as mineral resources; however the Company’s objective is to define mineral resources initially and then to work towards engineering activities to define any economic viability of the Opemiska Copper Project. The exploration targets defined on the old Springer and Perry mines are based on thousands of holes that were drilled during the mining period of both mines, many of which were drilled from underground and for which no core is left to resample or log and therefore cannot easily be confirmed. Nevertheless it is the opinion of the QP that the assays used to define the exploration targets are acceptable for the purposes of defining the exploration targets.
Opemiska Geology and Exploration Potential
The Springer and Perry mines were the most important producers in the Chapais district and are hosted by the mafic to ultramafic Ventures sill. Mineralization consists of quartz veins with chalcopyrite, magnetite, pyrite and pyrrhotite injected primarily into the synclinal hinge zone of the Chapais syncline. The veins occupy radial fractures dominantly east-west trending but with a subordinate northwest-southeast direction. The veins, which were all mined underground, were subject to minimum cut-off grades and as such a considerable amount of lower grade material was left behind in the unmined wall rock and in various pillars including the crown pillars of all zones except the western end of Zone 3 which is now a glory hole. “The key to success on this project will be to properly account for all the material that has been mined by carefully digitizing all the historical underground workings and by validating the historical drilling by an adequate program of hole twinning since no core remains from the mined area, said Charles Beaudry, VP Exploration for Power Ore and Qualified Person as defined in NI 43-101”.
Terms of Acquisition
To acquire a 100% interest in the Opemiska Copper Complex, Power Ore and Ex-In entered into a definitive agreement with the effective date on the first business day after receipt of conditional approval by the TSX Venture Exchange. Its terms are as follows: 6 Months after the effective date, Power Ore will issue 1.5 Million shares, 1.5 Million warrants ($0.20 exercise price) and pay $50,000 to Ex-In; By the 18th Month after the effective date, Power Ore will incur $500,000 in work expenditures on Opemiska, issue 1.5 Million shares and 1.5 Million warrants ($0.25 exercise price) and pay $150,000 to Ex-In; By the 30th Month after the effective date, Power Ore will incur an additional $1,000,000 in work expenditures on Opemiska, issue 2 Million shares and 2 Million warrants ($0.30 exercise price) and pay $300,000 to Ex-In; By the 42nd Month after the effective date, Power Ore will incur an additional $1,500,000 on Opemiska, issue 3 Million shares and 3 Million warrants ($0.35 exercise price) and pay $1,000,000 to Ex-In. The Opemiska Copper Complex is subject to a 2% NSR, 50% of which can be re-purchased by Power Ore at a cost of $4.5 million. At any time, Power Ore can accelerate its obligations to exercise 100% ownership of Opemiska Copper Complex at an earlier date. Subject to certain adjustments in the case of accelerated issuance, all warrants to be issued to Ex-In will expire 36 months after their date of issuance. All securities to be issued to Ex-In will be subject to a four-month hold period in accordance with applicable law.
Closing of the transaction, which is a fundamental acquisition, remains subject to final approval of the TSX Venture Exchange, as well as certain other conditions as are customary in transactions of this nature. The definitive agreement was signed today. This is an arms length transaction and there are no finder’s fees payable.
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