Boreal Signs Option Agreement With Boliden Mineral AB for Its Burfjord Project in Norway
VANCOUVER, BC, June 10, 2020 /CNW/ - Boreal Metals Corp. ("Boreal" or the "Company") (TSXV: BMX) is pleased to announce that it has entered into an option agreement (the "Agreement") with Boliden Mineral AB ("Boliden") with respect to Boreal's 100% owned Burfjord copper-gold project in Northern Norway ("Burfjord" or the "Project"). The Project is host to gold and cobalt bearing high grade copper veins which occur in broad zones of disseminated style copper mineralization covering a 6-kilometer by 4-kilometer window of copper prospective geology (Figure 1).
"The option agreement with Boliden, a leading mining and smelting company in the region, represents a significant step forward in the advancement of Boreal's exploration project portfolio," stated Patricio Varas, Chairman and CEO of the Company. "Collaboration with Boliden will maximize the potential for a significant copper-gold discovery at Burfjord and will facilitate value creation during these difficult financial market conditions."
Burfjord is characterized by broad arrays of copper, gold and cobalt bearing veins dominated by iron-oxide and iron-carbonate rich mineral assemblages reminiscent of Iron Oxide Copper Gold mineral deposits (IOCGs). The large associated alteration system at Burfjord and widespread copper mineralization support the Project's potential to host a large copper deposit.
On March 20, 20191, Boreal announced compelling drill results from Burfjord, including an intercept of 32 meters averaging 0.56% copper and 0.26 g/t gold (including 3.46 metres of 4.31% copper and 2.22 g/t gold) at shallow depths below a group of historic mine workings. This and other drill defined zones of copper and gold mineralization are slated for immediate follow-up. Historical drilling on the Project returned 7.0 meters averaging 3.6% copper2.
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1Intercept reported as seen in drill core. The true width is estimated at 85-100% of the reported interval. See Boreal's March 20, 2019 News Release for discussion of analytical methods, QA/QC and core handling protocols. |
2Source: NGU Deposit Factsheet, Deposit Area 1943-010, 1997. Boreal's property reviews have confirmed the geologic setting and occurrence of mineralization on the Project and considers the historic exploration data to be relevant as reported in public disclosures and government reports. |
Summary of Commercial Terms
In accordance with the Agreement, Boliden may earn a 51% interest in the Project by incurring US$6,000,000 on exploration and development of the Project within four years of the effective date of the Agreement (the "First Option"). Boliden may also exercise the First Option by paying Boreal in cash within such four-year period the difference between US$6,000,000 and the expenditures incurred. The four-year period to exercise the First Option may be extended if exploration and development on the Project is delayed by an event of force majeure, which includes the current Corona Virus pandemic.
If the First Option is exercised, Boliden may earn an additional 29% interest in the Project, for an aggregate 80% interest (the "Second Option"), by solely funding further advancement work through the delivery of a NI 43-101 and PERC (Pan European Reserves & Resources Reporting Committee) compliant feasibility study and solely funding all annual costs to keep the Project in good standing.
EMX Royalty Corporation (NYSE:EMX, "EMX"), the underlying royalty holder and technical advisor to Boreal on the Project, will retain a 3% NSR royalty on the Project, which includes advance royalty payments credited toward actual royalties payable upon production (see Boreal News Release dated February 4, 2017 for details). One percent of the 3% NSR may be re-purchased from EMX by February 14, 2025, provided that this right of purchase may be extended if Boliden, due to an event of force majeure, still has the right to exercise, but has not yet exercised, the First Option by February 14, 2025.
Boliden will solely fund the advance royalty payments due to EMX until the First Option is exercised, after which advance royalty payments will be paid by both Boreal and Boliden in proportion to their respective proportionate interests in the Project.
Boreal will be the initial operator of the Project until the First Option is exercised. Upon exercise of the First Option, Boreal and Boliden will form an incorporated Joint Venture to further advance the Project, and Boliden will have the right to become the operator.
Overview of the Burfjord Project
The Project is comprised of six exploration licenses totaling 5,500 hectares in the Kåfjord Copper Belt near Alta in Norway. The Project is highly prospective for Iron Oxide Copper Gold (IOCG) and sediment hosted copper mineral deposits, which contribute significantly to copper production globally.
During the nineteenth century, copper mineralization was mined from over 30 historic mines and prospects developed along the flanks of a prominent 4 x 6 kilometer fold (anticline) on the Project consisting of interbedded sedimentary and volcanic rocks. Many of the rocks in the anticline are intensely hydrothermally altered and contain sulphide mineralization.
High-grade copper-gold veins at Burfjord that were historically mined at cutoff grades of 3-5% copper are surrounded by envelopes of stockwork veins or disseminations of copper mineralization extending tens to hundreds of meters laterally into the host rocks. The Company believes this mineralization has economic potential and represents an attractive bulk tonnage exploration drilling target. Copper bearing veins in the area are dominated by ferroan carbonate, sodium-rich minerals, and iron-oxide minerals (magnetite and hematite), but also contain the economically important minerals chalcopyrite, bornite and chalcocite in addition to cobalt-rich pyrite as generally coarse-grained (often 0.5 centimeter to multi-centimeter scale) disseminations in the veins.
About Boreal Metals Corp.
Boreal is a mineral exploration company focused on the discovery of silver, zinc, copper, gold, and nickel deposits in exceptional, historical mining project areas spanning Sweden and Norway. The Company aims to discover new economic mineral deposits in known mining districts that have seen little or no modern exploration. The Company is led by an experienced management team and technical team, with successful track records in mineral discovery, mining development and financing.
About Boliden Mineral AB.
Boliden is a Swedish public limited company that is one the Nordic region's key mineral producers with a diversified spectrum of operations, including active mines in six mining areas in Europe and five smelting and processing facilities across Norway, Sweden, and Finland. Boliden produces a diverse suite of mineral products including base and precious metals. They are an ideal partner to work with at Burfjord, given their regional expertise in exploration, mine development and mineral production.
Qualified Person
Daniel MacNeil, P.Geo, a Qualified Person as defined by National Instrument 43-101, has read and approved all technical and scientific information related to the Burfjord project contained in this news release. Mr. MacNeil is Vice President Exploration for Boreal.
On behalf of Boreal Metals Corporation
Patricio Varas, Chairman and CEO
Neither 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.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain statements that may be considered to be "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although Boreal Metals Corp. believes the expectations expressed in such forward–looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or realities may differ materially from those in the forward–looking statements. Such material risks and uncertainties include, but are not limited to, Boreal Metals Corp.'s ability to raise sufficient capital to fund its obligations under the Agreement and fund it s general working capital requirements, the ability to maintain the Project in good standing, the ability to explore and develop the Project, the ability of Boreal Metals Corp. to repay its debt; changes in economic conditions or financial markets that may impact funding of the Project; the ability to obtain the necessary permits and consents required to explore, drill and develop the Project and, if obtained, to obtain such permits and consents in a timely fashion relative to the terms and conditions of the Agreement and Boreal Metals Corp.'s plans and business objectives for the Project; the general ability to drill test the Project and find mineral resources; if any mineral resources are discovered or acquired, the ability to monetize any such mineral resources; and changes in environmental and other laws or regulations that could have an impact on the Project or Company's operations. Forward-looking statements are based on the reasonable beliefs, estimates and opinions of Boreal Metals Corp.'s management on the date the statements are made. Except as required by law, Boreal Metals Corp. undertakes no obligation to update these forward–looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
SOURCE Boreal Metals
on Boreal, please visit the Company website at www.borealmetals.com or contact us at +1.604.922.8810 or [email protected].
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