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Kirkland Lake Gold (TSX: KL; NYSE: KL) has struck a strategic partnership with Melkior Resources (TSXV: MKR), which is advancing its flagship Carscallen gold project in the Timmins gold camp of Ontario.
The Toronto-based gold miner, whose high-grade mines in Canada and Australia produced 974,615 oz. of the precious metal last year, is investing C$1 million in a non-brokered private placement for up to 1.25 million units of Melkior at 80¢ per unit, giving it a 9.9% stake in the junior.
“We are extremely proud to announce this landmark equity investment and potential joint-venture agreement with one of the world’s most respected gold mining companies,” Jonathon Deluce, CEO of Melkior Resources, said in a press release.
Kirkland has the option to earn up to a 50% interest in the Carscallen project over five years
“We believe this may provide our shareholders with the upside of discovery with limited share dilution to advance the property.”
Under the placement, each unit comprises one common share of Melkior and one common share purchase warrant that entitles Kirkland to acquire shares in Melkior for C$1.20 per share for two years following the closing of the placement.
In addition, Kirkland has the option to earn up to a 50% interest in the Carscallen project over five years.
Upon completion of an earn-in agreement and the formation of a joint venture, Kirkland will have the right to acquire an additional 25% interest in the project over a further five-year period.
Melkior’s 100%-owned Carscallen project, about 25 km southwest of Timmins in north-eastern Ontario, contains gold-bearing structures over 1 km that remain open along strike and at depth and have potential to host gold and volcanic massive sulphide (VMS) deposits, Melkior says.
The junior has drilled more than 36,000 metres at the project.
Highlights inlcude 9.5 metres grading 5.6 grams gold per tonne and 6.4 grams silver per tonne starting from 486.5 metres downhole, including 0.5 metres grading 67.9 grams gold and 79.8 grams silver, 0.62% copper and 0.27% zinc.
“We are excited with the last of our results from our March 2020 drill program,” Deluce said.
“We are very encouraged to intercept high-grade gold veins in our 264-meter step-out hole with indications of metals found within a VMS environment.”
“We believe the Carscallen project has a lot of potential for both the high-grade gold system and the increased likelihood of being in a VMS environment as well.”
Preliminary metallurgical testing demonstrated gold recoveries of 95% from head grade material grading 8.72 grams gold per tonne from the ZamZam zone.
At press time in Toronto, Melkior Resources was trading at 20¢ per share within a 52-week trading range of 11¢ and 24¢.
The company has around 90 million common shares outstanding for a C$18.47-million market capitalization.
(Carl A. Williams – This article first appeared in The Northern Miner on May 21)
