Sun Metals Signs Agreement to Acquire 100% of Lorraine Project

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Sun Metals Signs Agreement to Acquire 100% of Lorraine Project

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by ahnationtalk on October 29, 202023 Views


VANCOUVER, BC , Oct. 29, 2020  – Sun Metals Corp. (TSXV: SUNM)  (“Sun Metals” or “we” or the “Company”) is pleased to announce it has entered into a purchase agreement (the “Agreement”) with Teck Resources Limited (“Teck”) to acquire Teck’s 51% joint venture interest in the Lorraine copper-gold project. On satisfaction of the terms of the Agreement, Sun Metals will own 100% of the Lorraine project which is located just 40 kilometres north of the Company’s 100% owned Stardust project in northcentral B.C.

The Lorraine project is host to a precious metal enriched, porphyry copper system. Examples of deposits with this style of mineralization in British Columbia include Galore Creek, New Afton, and Mount Polley.

“Consolidating ownership of Lorraine gives shareholders 100% exposure to two high-quality copper-gold projects in a Tier 1 jurisdiction we know very well. Like the nearby Stardust project, Lorraine demonstrates high grades for its deposit type and shows excellent exploration potential. This acquisition gives shareholders full ownership of two quality copper-gold assets in British Columbia with proximity, creating a larger regional footprint and the potential for future operational advantages,” stated Steve Robertson , Sun Metals’ President and CEO.

Pursuant to the Agreement, Sun Metals will:

  • Make payments to Teck in either cash or common shares of the Company as follows:
    • $500,000 payable on the closing date;
    • $500,000 payable on the first anniversary of the closing date; and
    • $500,000 payable on the second anniversary of the closing date.
  • Make additional milestone payments to Teck in either cash or common shares of the Company as follows:
    • $500,000 upon a Preliminary Economic Assessment;
    • $2,000,000 upon a Feasibility Study; and
    • $5,000,000 upon a construction decision.
  • Teck will retain NSR royalties on closing:
    • A 1.0% NSR royalty on all claims that are not already burdened by a royalty;
    • A 0.25% NSR royalty on all claims that are subject to existing royalties.
  • If Sun Metals sells or options all or a portion of the property to a third party at any time during a 60-month period commencing from the date of the Agreement, Sun Metals will pay to Teck 20% of the sale proceeds, net of exploration expenses incurred on the property by Sun Metals following closing.

Closing is expected to take place in November 2020 and is subject to receipt of all required regulatory and third-party consents and satisfaction of customary closing conditions and documentation.

Lorraine Project Overview

The Upper Main, Lower Main and Bishop zones at Lorraine were the subject of a 2012, National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) resource estimate published by Lorraine Copper Corp. titled “Summary Report on the Lorraine-Jajay Property Omineca Mining Division, B.C.” 1 with an effective date of December 16, 2015 . In that report, Gary Giroux , P.Eng. a qualified person as defined under NI 43-101 provided the following estimate:

Resource

Category 2

Tonnes

Copper

(%)

Gold

(g/t)

Indicated

6,419,000

0.61

0.23

Inferred

28,823,000

0.45

0.19

A qualified person as defined under NI 43-101 has not completed sufficient work to classify the above historical estimate as a current mineral resource. Sun Metals is not treating the historical estimate as a current mineral resource.

The property is underlain by the Hogem batholith within the Quesnel Trough. The Duckling Creek syenite occurs in the Lorraine area as a multiple-stage dyke swarms emplaced into the older Hogem calc-alkaline intrusive rocks and Takla volcanic rocks. Copper gold mineralization at Lorraine is associated with the Duckling Creek alkaline magmatism.

The mineralization at Lorraine is typical of alkalic porphyry copper systems characterized by:

  • High grades
  • Strong gold +/- silver enrichment
  • Molybdenum mineralization
  • Multiple zones

Some of the highlight results from past drilling at the Lorraine property include:

Table 1: Significant Historic Drill Results 1

Zone

Drill Hole

From

(m)

To

(m)

Length

(m)

Copper

(%)

Gold

(g/t)

Silver

(g/t)

Bishop

L96-43

69.2

203.9

134.7

0.59

0.11

Upper Main

L94-8

1.5

103.0

101.5

1.42

0.62

Lower Main

2001-60

32.8

146.0

113.2

0.76

0.49

Weber

04-82

3.1

112.0

108.9

0.69

0.07

Slide

JTM06-07

261.5

317.0

55.5

0.72

5.5

Technical aspects of this news release have been reviewed, verified and approved by Ian Neill P.Geo ., Vice President Exploration of Sun Metals, who is a qualified person as defined by NI 43-101.

An updated interactive corporate presentation is available on Sun Metals’ website at https://www.sunmetals.ca/investors/presentation/ .

On Behalf of the Board of Directors of

SUN METALS CORP.

Steve Robertson

Chief Executive Officer

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.

About Sun Metals

Sun Metals is advancing its 100% owned flagship, high-grade Stardust Project located in northcentral British Columbia, Canada . Stardust is a high-grade polymetallic Carbonate Replacement Deposit with a rich history. Sun Metals also now owns the Lorraine copper-gold project, and the OK copper-molybdenum project.

The Canyon Creek copper-gold skarn zone at Stardust was the subject of a 2018, NI 43-101 resource estimate published by the Company titled “Stardust Project NI 43-101 Technical Report Omineca Mining Division, British Columbia ” with an effective date of January 8, 2018 . In that report, GeoSim Services Inc. provided the following estimate. Stardust Project – Canyon Creek zone Mineral Resource Estimate 3 :

RESOURCE CATEGORY

TONNES

COPPER %

ZINC %

GOLD G/T

SILVER G/T

% CU EQ 3

Indicated

985,000

1.34

0.62

1.59

36.8

2.92

Inferred

1,985,000

1.24

0.14

1.72

30.5

2.65

1 See updated and amended NI 43-101 Technical Report entitled “Summary Report on the Lorraine-Jajay Property Omineca Mining Division, B.C.” with an effective date of December 16, 2015, as amended July 22, 2016, which can be found on Lorraine Copper Corp.’s profile on SEDAR at www.sedar.com.Available on Lorraine Copper Corp.’s profile on SEDAR at www.sedar.com

2 The cut-off grade used in the resource estimate was 0.2% copper (Cu).

3 The cut-off grade used in the resource estimate was 1.5% copper equivalent (Cu Eq). Metal price assumptions for the Cu Eq calculation in this table were $3.00/lb Copper, $1.25/lb Zinc, $1,300/oz Gold and $18/oz Silver. Adjustment factors to account for differences in relative metallurgical recoveries of the constituents will depend upon completion of definitive metallurgical testing. The following equation was used to calculate copper equivalence: Cu Eq = Copper + (Zinc x 0.4167) + (Gold x 0.6319) + (Silver x 0.0087). A cut-off grade of 1.5% Cu Eq represents an in-situ metal value of approximately $100/tonne which is believed to represent a reasonable break-even cost for underground mining and processing. These are not mineral reserves and no work has been completed that demonstrates economic viability at the Project.

NT4

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