Sun Metals raising $5 million for B.C. exploration
7 months ago Resource World
Diamond Drill Hole 18-SD – 421-545 metres showing chalcopyrite (copper) mineralization from the Stardust Project. Source: Sun Metals Corp.
Sun Metals Corp. [SUNM-TSXV] said Friday DEcemver 7 that it is raising $5.16 million by way of a private placement to fund exploration at the Stardust polymetallic project in British Columbia.
The company said it has struck a deal with PearTree Securities Inc., whereby PearTree, acting as agent for the purchasers, will subscribe for up to 12.5 million flow-through common shares of Sun Metals at 41.3 cents per flow-through share. The offering is expected to close on December 20, 2018.
Sun Metals shares advanced on the news, rising 16.67% or $0.04 to 28 cents on volume of 394,600. The stock trades in a 52-week range of 12 cents and 40 cents.
The Stardust Project is located in north-central British Columbia, approximately 150 km north of Fort St James, and ranks as the company's flagship project.
The property is host to at least one mineralized carbonate replacement system identified as the Canyon Creek copper-gold deposit. Stardust boasts a rich exploration history, dating back to 1941, the company said.
Carbon Replacement Deposits (CRD) are epigenetic, intrusion-related, high temperature sulfide-dominant lead-zinc-silver-copper-gold rich deposits that typically range from lenticular or podiform bodies referred to as chimneys and/or mantos, depending on their orientation.
Limestone, dolomite and dolomitized limestone are the major host rocks. Ores grade outward from sulfide-rich skarns associated with unmineralized or porphyry-type intrusive bodies to essentially 100% polymetallic massive sulfide bodies.
Under a September, 2017 agreement with Lorraine Copper Corp. [LLC-TSXV], Sun Metals is currently earning a 100% interest in the project, where $25 million has already been invested on exploration activities that include 80,000 metres of drilling in over 390 holes.
Sun Metals can earn the 100% interest in Stardust by spending $6 million on the project by December 31, 2021. At that point, Sun Metals must issue sufficient shares (to a maximum of 51.9 million) to Lorraine Copper, such that Lorraine will own a 30% interest in Sun.
Under the deal, Lorraine Copper will also retain a 2% net smelter return royalty (NSR) on precious metals and a 1% NSR on base metals. Sun has the option to reacquire 50% of each royalty via a payment of $1.5 million per royalty.
According to a NI 43-101-compliant resource estimate, the Canyon Creek copper-gold skarn zone at Stardust contains an indicated resource of 985,000 tonnes, grading 1.34% copper, 0.62% zinc, 1.59 g/t gold, 36.8 g/t silver and 2.92% copper equivalent. On top of that is an inferred resource of 1.98 million tonnes, grading 1.24% copper, 0.14% zinc, 1.72 g/t gold, 30.5 g/t silver or 2.65% copper equivalent.
In its October 25 press release, the company said it believes that drilling is successfully tracking a major mineralizing fluid pathway towards the heart of this high-grade system.
On November 14, 2018, Sun Metals issued a press release stating that a full mineralized intersection from diamond drill hole 18-SD-421 has now been completely assayed. It has returned a 100-metre intersection, grading 2.51% copper, 3.03 g/t gold, and 52.5 g/t silver for a 4.99% copper equivalent.
The completed results from diamond drill hole 18-SD-421 reinforce that drilling has intersected consistently stronger and more pervasive mineralization than historically encountered at Stardust by previous operators, Sun Metals said.
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