Vatic Ventures Corp. (OTC: VTTCF) (TSX-V: VCV) has signed a memorandum of understanding with Falcon Gold Corp. for the Wabunk Bay cobalt claims adjoining the Uchi mine in Northwestern Ontario, Canada. Vatic has the right to earn a 60-per-cent interest from Falcon by meeting certain expenditure and consideration requirements on the property.
Falcon has an underlying agreement with the property owner, whereby it has the right to acquire a 100-per-cent interest in two (cobalt, copper, nickel and platinum group elements) mining claims in Earngey township in the Kenora district of Northwestern Ontario. The claims comprise 19 claim units and cover an area of approximately 304 hectares (see Falcon's press release of June 13, 2018). The Wabunk Bay property is highly prospective for cobalt, and the company believes that it can explore and develop potential in a short time frame there.
In accordance with the terms of the memorandum of understanding, Vatic can exercise the option by:
- Paying to Falcon a $25,000 deposit;
- Issuing to Falcon an initial 200,000 units at 18 cents per unit, with each unit consisting of one common share plus a warrant to purchase a further common share for 25 cents, exercisable for two years (the initial units);
- Completing exploration expenditures of $750,000 on the property by June 27, 2019;
- Issuing by June 27, 2019, an additional 200,000 units on the same terms as the initial units;
- Paying to Falcon an additional $275,000 by June 27, 2019.
The property is subject to a two-kilometre area of interest and is subject to a 1-per-cent net smelter return royalty in favour of the underlying owner, which can be purchased for $1-million any time before commercial production. Upon exercise of the option, the company and Falcon will form a 60/40 joint venture for further development of the property subject to the right of the company to acquire Falcon's 40-per-cent interest by issuing shares of the company to Falcon based on a valuation to be conducted by at least three valuators.
Wabunk Bay sulphide mineralization
In 1957, the Ontario Department of Mines reported in its mineral resource circular No. 2 (MRC 2): "The showings occur entirely within a coarse-grained hornblende gabbro cutting greenstone, sediments and various intrusive rocks. The gabbro is 200 feet wide and has a maximum width of 300 feet. The southern 1,000 feet of this body strike north then swing to the northwest for an additional length of 1,800 feet. Chalcopyrite, pyrrhotite and pyrite occur where the gabbro is sheared and especially at the contacts of narrow diabase dikes, which strike north to northeast and are younger than the gabbro."
The MRC 2 further reported on the Wabunk Bay mineralized zones: "The main showing lies in the north-south portion of the gabbro, strikes near north and is about 300 feet long; although mineralization is not continuous, it is found along a length of 600 feet. The average width of mineralization cut in five drill holes is 21 feet. An 18-foot chip sample ran 1.08 per cent copper and 0.40 per cent nickel. A 22-foot chip sample ran 0.44 per cent copper and 0.12 per cent nickel. The best 25 feet of drill core assayed 0.62 per cent copper and 0.04 per cent nickel. Core assays gave as high as 0.03 per cent cobalt."
Wabunk Bay exploration history
The history of exploration work in the area of the Wabunk Bay cobalt claims is summarized as follows:
- 1941: Sulphide mineralization is discovered by Mike Colberg.
- 1955: A prospector, Joe Kolak, restaked the showings and optioned the property to Campbell Island Mines and Exploration Ltd. Work completed included geophysical surveys, trenching and six diamond drill holes totalling 390 feet in 1956. Surface samples assayed 0.33 per cent cobalt over 1.5 metres and 0.15 per cent cobalt over 7.6 metres.
- 2003: Jilbey Gold Exploration Ltd. carried out a large regional reconnaissance program in the greenstone belts south and east of Red Lake, Ont. The Wabunk Bay area was covered by an airborne geophysical survey that identified two magnetic and conductive anomalies.
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