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  • Junior explorer Pursuit Minerals (PUR) has landed an option agreement to snatch up the Buck Mountain Gold Project in Arizona for roughly $1.1 million
  • The project is prospective for gold, silver, and platinum group elements
  • Pursuit has until the end of September to finish due diligence in the area, after which point it can decide to make the full payment for the project in a mix of cash and scrip over two years
  • As part of due diligence work, Pursuit will re-drill some key areas to test auger soil and gravel samples from Buck Mountain
  • The company will also work to get the mineral resource of the project up to JORC standards
  • To fund the buy, Pursuit is launching a $600,000 placement with new shares worth half a cent each
  • Today, shares in Pursuit are trading 150 per cent higher for 1.5 cents each

Pursuit Minerals (PUR) has landed an option agreement to snatch up the Buck Mountain Gold Project in Arizona, U.S.A., for roughly $1.1 million.

The project is first and foremost a high-grade alluvial gold project, but Pursuit told shareholders this morning the area is prospective for silver and platinum group metals (PGM) as well.

The project area has been mined since the 1900s and has recently had a mineral resource estimate completed of 1.248 million tonnes at 6.1 grams per tonne of gold for 244,000 ounces. Gold, silver, and PGM mineralisation remains open at depth and to the sides, according to Pursuit.

However, this mineral resource was completed in compliance with Canadian Nationa Instrument 43-101 requirements. This means while the resource estimate gives the company a good idea of what’s beneath the ground, Pursuit will need to re-drill some areas to get the mineral resource compliant with Australasian Joint Ore Reserves Committee (JORC) codes.

Pursuit CEO Mark Freeman said by bringing the mineral resource up to JORC standards, however, the company can increase the mineralisation of the project.

“The company is very excited about the potential to significantly increase the high-grade gold-silver-PGM mineralisation on the basis that the existing resource was measured within the alluvial gravels form to a depth of 15 feet and during the 2008 drilling it was determined that the gold, silver and PGM-bearing alluvial gravels extend to at least 30 feet,” Mark explained.

The company now has until the end of September this year to carry out all due diligence at Buck Mountain before clinching the deal.

Part of this will include re-drilling 21 auger samples from a major drilling program in 2014. Pursuit said auger soil and gravel samples from 128 sample locations are in storage awaiting processing and assays. As such, along with the new sample collecting, Pursuit will assay existing samples to verify the grade and distribution of mineralisation in the area.

Pursuit has paid US$20,000 (roughly A$29,000) for the due diligence period, and if it decides to make the buy, the company will pay another US$750,000 (roughly A$1.07 million).

The purchase will be split into three payments: US$75,000 (roughly A$107,000) upfront, another US$75,000 in Pursuit shares within 12 months of the initial payment, and US$600,000 (roughly A$858,000) in a mix of cash and scrip within 18 months of the second payment.

On top of this, the sellers will be given a 2.5 per cent net smelter royalty on all gold produced from the project.

To fund the deal, Pursuit is launching a $600,000 capital raise in the form of a 0.5-cent share placement.

Shareholders seem impressed at the deal today, with Pursuit shares currently trading a neat 150 per cent higher for 1.5 cents each.

PUR by the numbers
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