Aguila Copper (TSXV: AGL) stock surged Tuesday following the announcement it signed a deal with a private British Columbia company to secure rights to earn up to 90% of 28 mining claims and 1 mineral lease totaling 4,968 hectares covering the Sherridon mining district in central-western Manitoba.
Sherridon is one of Canada’s notable Volcanic Hosted Massive Sulphide (VHMS) mining camps, that lies 65km northeast of the mining/metallurgical complex in Flin Flon, linked by an all-weather 78 km road. The site is serviced by a railroad, power line and the small community of Sherridon/Cold Lake, the company said in a press release.
Mining of the Sherritt Gordon deposit at Sherridon took place between 1931 and 1951, over which time 7.74 million tonnes were mined at an average grade of 2.46% Cu, 2.84% Zn, 0.6 g/t Au and 33 g/t Ag. Subsequent exploration was completed in the region by a range of companies, which identified numerous massive sulphide occurrences, typically associated with a similar host-horizon as Sherritt Gordon, Aguila said.
Exploration activity peaked between November 2006 and July 2010, including the drilling of 159 holes and estimation of near surface indicated and inferred mineral resources. Additional in-fill and along strike drilling was completed at the project subsequent to resource calculation. No exploration activity is documented after November 2012.
The terms are Aguila pays C$15,000 cash and issue to the seller 100,000 fully paid shares in the company within six months of the closing date, and incur exploration expenditures of CA$100,000 before the first anniversary of closing. Aguila will earn an 80% interest in the property by incurring an additional CA$900,000 exploration expenditures by the 4th anniversary, and earn an additional 10% (for a total of 90%) by incurring an additional C$1 million of exploration expenditures by year seven.
Aguila and the seller will form a joint venture that may then fund project expenditure, or its interest will be converted into a 1.5% net smelter royalty that Aguila can buy for C$2 million at any time.
“The Sherridon mining district is a strategic acquisition for Aguila alongside our US portfolio,” CEO Mark Saxon said in the media release.
“Our focus during 2021 has been to identify copper-rich projects, of attractive geological styles, within mining supportive jurisdictions,” Saxon said. “VHMS style deposits are one of the largest producers of copper, zinc and gold globally, including such world-class deposits as Neves Corvo, Kidd Creek, and the Bathurst camp.
“We are excited to have this opportunity to play a role in the energy transition, with a high-quality copper asset close to existing mining and processing infrastructure.”
By Tuesday’s close on the TSX, Aguila’s stock was up 30%. Shares had been traded over 30,000 times, triple the daily average trading volume, capitalizing the company at C$6.2 million.