Merritt mill Credit: Nicola Mining
Nicola Mining has signed a letter of intent (LOI) with privately held High Range Exploration, to earn a 50% stake in the Dominion Creek gold project, 110 km from Prince George in B.C. When paired together with a Strategic Milling and Profit Share Agreement that the two companies signed on Sept. 17, Nicola’s economic interest in Dominion Creek would be 75%.
Nicola plans to complete additional due diligence work before committing to a definitive agreement – the two companies intend to advance the 10.4 sq. km property towards a 10,000-tonne bulk sample permit.
Under the terms of last week’s milling and profit share agreement, material mined at Dominion Creek would be shipped to Nicola’s wholly owned, 200 t/d, Merritt gold-silver mill and tailings facility. Nicola would be responsible for negotiating the sale of the resulting concentrate and all costs associated with milling. Once mining and milling costs are repaid, the two parties would equally distribute the proceeds from concentrate sales.
Under the terms of the LOI, Nicola may earn a 50% share in Dominion Creek for $150,000 and financing estimated startup costs of $525,000, the latter would be repaid once concentrate generated from the bulk sample is sold.
In July, the publicly traded junior assayed 23 samples taken from two zones at the property: highlight assays include 149 g/t gold and 270 g/t silver and 125 g/t gold and over 256 g/t silver. The average grade of the samples came in at 61.3 g/t gold.
There are two main known mineralized zones at the gold project – a small bulk sample pit and a mineralized outcrop with several veins. In 1992, 80 tonnes of concentrate from this site were processed at a smelter in B.C. – this material had a head grade of 14.1 g/t gold and yielded an average gold recovery of 93%.
According to the release, “little material sorting was conducted at the time but visual separation of mineralized rock on site prior to transport is viable.” The separation would likely increase grades and reduce transportation costs.
Past drilling targeting the South zone area at Dominion Creek was completed over an area of 300 metres by 200 metres. Drilling at the North zone was done over two smaller areas, 300 metres apart, each roughly 50 metres by 60 metres. These drill targets were derived using geochemical survey results and outcrop samples.
Nicola Mining also has a 100% stake in the New Craigmont copper project and holds an operating gravel pit adjacent to its mill.
For more information, visit www.NicolaMining.com.