Aurion Finalizes Purchase of Finland Projects
Aurion Resources Ltd. (“Aurion”) (TSX VENTURE: “AU”) is pleased to report that it has executed the Definitive Purchase Agreement with Dragon Mining Limited (“Dragon”) (ASX:DRA), to acquire a 100% interest in the Kutuvuoma and Silasselka exploration projects in Northern Finland.
In consideration, Dragon Mining will receive 6,000,000 Common Shares in Aurion and Aurion will expend EUR 1,000,000 on the Projects within 3 years. The Payment Schedule from the original Letter of Intent, as announced March 5, 2014, has been re-negotiated such that there is no firm work commitment in the first two years, other than maintaining the tenements in good standing, and the subsequent share issuances will be timed with the granting of final title to the various tenements comprising the projects, as further detailed below. Additionally, Aurion has the option to expend the entire work commitment on only one project if it so decides.
Kutuvuoma Gold Project
The Kutuvuoma project area is located 35 km SE of the 4.8 million ounces Kittila Gold Mine owned by Agnico Eagle Mines Ltd. (“Agnico Eagle”). Kutuvuoma is a high-grade, shear zone hosted gold deposit that was discovered in the early 1990’s by Outokumpu Oy. They conducted geochemical till sampling, ground magnetic and EM geophysical surveys and completed a total of 29 reverse circulation (1,112 metres) and 18 diamond (2,313 metres) drillholes over approximately 150 metre horizontal strike length and maximum of 150 metre vertical depth. Dragon acquired the property from Outokumpu in 2003 as part of a large property and data package and aside from compilation and reconnaissance mapping conducted no other exploration activities.p> Drilling results reported in historic exploration reports include high grade gold intercepts such as:
- 9.7 g/t Au over 5.1 m incl 20.2 g/t Au over 2.0 m
- 7.2 g/t Au over 19.4 m incl 26.7 g/t Au over 1.0 m
- 8.5 g/t Au over 8.6 m incl 31.3 g/t Au over 1.0 m
- 6.9 g/t Au over 5.6 m incl 20.0 g/t Au over 1.5 m
- 6.6 g/t Au over 6.1 m incl 16.5 g/t Au over 2.1 m
- 96.5 g/t Au over 1.2 m and 53.1 g/t Au over 1.2 m
The core has not been systematically sampled and the mineralised zones remain open along strike and at depth. A small portion of the deposit was test-mined during 1998-1999 by open cut method and has not been subject to exploration activities since. Numerous geochemical exploration targets remain untested throughout the property as well.
The Kutuvuoma property covers circa 6 km strike length over a prospective geological sequence with mineralized structures and has been only partially explored with geochemical and geophysical surveys extending strike distance of circa 1.5 km. The previous work has identified a number of gold anomalies that remain untested. The Kutuvuoma property tenements cover 6026 ha (hectares) comprising a 41 ha mining lease, 1648 ha in claims applications and 4337 ha in claim reservations, within a 32,500 hectare area of interest.
The Silasselka project area is located 38 km NW of Agnico Eagle’s 4.8 million ounce Kittila Gold Mine. The Silasselkä project area was previously explored during the 1960’s by Finnish entity Otanmäki Oy. They predominantly focussed on the vanadium potential outlining four vanadium-iron-titanium deposits, Pyhäjärvi, Pesosjärvi, Koivusilasselkä and Kuusilaanivaara. Historical reports indicate that a total of 55 diamond core drill holes were completed in the project area. Dragon Mining acquired the property in 2010.
Vanadium-iron-titanium mineralisation is associated with massive magnetite-ilmenite veins or ilmenite-magnetite disseminated zones in mafic igneous rocks, along a 15 kilometre long anomalous magnetic zone that strikes north-south and dips towards the east at moderate to steep angles. The dimensions of the main mineralised zones identified to date range from 100 to 400 metres in length, 5 to 10 metres in width and at least 100 to 200 metres with depth. Parallel mineralised zones exist locally. The extensions of the identified vanadium-iron-titanium mineralised zones have not been drill tested.
Some of the better drill intercepts from historical reports include:
|Width (m)||Fe (%)||TiO2 (%)||V (%)|
While the deposits of Fe-Ti-V mineralisation are significant and still under-explored, Aurion’s primary interest in Silasselka is in the gold and PGE potential. The geological setting has the potential to host magmatic nickel-copper-PGE and shear zone hosted gold mineralisation. The volcanic-sedimentary sequence, which includes intermediate and mafic volcanics and banded iron formations, located east of the Fe-Ti-V mineralisation is highly prospective for shear zone hosted gold mineralization. The Silasselkä Project area covers the potential northern strike extension of the Hanhimaa shear zone. The Hanhimaa Shear Zone hosts several gold occurrences which have reported drill intersections of 4.5 g/t Au over 11.7 m and 5.9 g/t Au over 7.5 m (Dragon Mining website). The Hanhimaa shear zone lies west of and parallel to the Kiistala shear zone which hosts the Agnico Eagle Kittila Gold Mine.
Aside from compilation and reconnaissance mapping by Dragon Mining no exploration activities have been performed on the property since the 1960’s.
The property tenements cover 26,435 ha comprising 1501 ha in claims applications and 24,934 in claim reservations within a 57,350 hectare area of interest.
Pursuant to the agreement, Dragon Mining will receive 6,000,000 Aurion Common Shares and Aurion will expend EUR1,000,000 on the Projects over three years to earn a 100 per cent interest in the two projects, as per the payment schedule outlined in Table 1 and subject to regulatory approvals.
Table 1 - Payment Schedule
(1) Signing, subject to fulfilment of the conditions precendent of:
- Aurion receiving all approvals required by the Toronto Stock Exchange; and
- Turvallisuus ja kemikaalivirasto (“Tukes”) accepting the bond proposal of Dragon Mining for the Kutuvuoma Mining Licence without material change.
(2) Upon the Kutuvuoma Claim Applications 4-21 becoming valid;
(3) Upon the Silasselkä Claim Applications 1-19 becoming valid; and
(4) The third anniversary of the Kutuvuoma Claims 4-21 and the Silasselkä Claims 1-19 becoming valid.
(5) It is anticpated that most claims applications will be proecessed by Tukes over the next 2-6 months.
The initial tranche of 2,000,000 Consideration Shares to be received by Dragon Mining will be escrowed for 18 months from the date of issuance of the shares. Any other Consideration Shares received by Dragon Mining within 18 months from signing shall also be escrowed for the remaining portion of the 18 month time period.
In addition Dragon Mining will retain a 3% Net Smelter Royalty (“NSR”) on any deposit mined by Aurion or any associated third party within the Projects and the defined Areas of Interest. Aurion or its nominee may purchase the full 3% NSR at any time on or before the sixth anniversary of the signing of the Agreement with a one off payment of EUR 4,000,000 in cash or 1% of the NSR any time after the tenth anniversary of the signing of the agreement with a one off payment of EUR 4,000,000 in cash on the basis that Dragon Mining has not sold the NSR to a third party. Dragon Mining is at liberty to sell the NSR to a third party at any time after the sixth anniversary of the signing of the Agreement.
Aurion will also make bonus payments to Dragon Mining of EUR 2,000,000 in cash or equivalent in Aurion Common Shares (share price based on a five day volume weighted average price (“VWAP”) immediately before the agreed settlement date) at Aurion’s discretion for the defining of one million ounces of gold equivalent material within the Projects and the defined Area of Interests that is categorised as Measured and Indicated in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”) or National Instrument 43-101 Standards for Disclosure for Mineral Projects (“NI43-101”). Further bonus payments of EUR 1,000,000 in cash or equivalent in Aurion Common Shares at Aurion’s discretion for the defining of every additional one million ounces of gold equivalent material within the Projects and the defined Area of Interests that is categorised as Measured and Indicated in accordance with the JORC Code or NI43-101.
Aurion will be able to utilize the services of Dragon Mining’s staff in Finland on an as-needed basis, in accordance with a separate Service Agreement. This will provide Aurion with access to a skilled resource base during start-up, while defraying some of Dragon Mining’s Finnish costs.
With a treasury of approximately $1.5 million and a low burn rate Aurion can comfortably fund the acquisition. The initial strategy will be to compile all available data and begin developing targets for follow-up in the next few months. Aurion will also seek to finance these projects through JV partnerships.
The Kutuvuoma and Silasselka projects are situated in the Central Lappland Greenstone Belt (CLGB) of Northern Finland and are accessible by road. The CLGB is a highly prospective, underexplored Proterozoic greenstone belt that hosts many gold, base metal, magmatic Ni-Cu-PGE prospects and deposits including Agnico Eagle Mines Ltd’s Kitttilä Gold Mine (Reserves as of Dec 31 2012, 4.8 Million ounces grading 4.5 g/t Au), First Quantum Minerals Ltd’s Kevitsa Ni-Cu_PGM mine (reserves as of Dec 31 2012 of >400 Mt 0.3% Ni, 0.4% Cu and 0.54 g/t combined Au-Pt-Pd)) and the recently discovered Sakatti Ni-Cu-PGE deposit owned by Anglo American Plc (1-2 % Ni, 1-2% Cu, 0.5-1.0 g/t PGE, >100 million tonne (Anglo 2011).
Finland was ranked number two in the Fraser Institute’s top mining destination survey in 2013 and is one of the most underexplored stable jurisdictions in the world. It is important to note that Finland only opened its border to foreign mining investment in the mid-1990s.
Mike Basha, P.Eng., P.Geo., President and CEO of Aurion, a Qualified Person as defined by National Instrument 43-101, is responsible for the preparation of this release.
Certain statements contained in this release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Companies’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The forward-looking information contained in this release is made as of the date hereof and Aurion is not obligated to update or revise any forward looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward looking information contained herein.
On behalf of the Board,
President & CEO
For further information on Aurion Resources please contact: Mike Basha at (709) 699-8300 or firstname.lastname@example.org ; For further information on Dragon Mining please visit their website at www.dragon-mining.com.au.
Neither the 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.