OVERVIEW
On April 27, 2011, we announced that we had entered into an option agreement to earn a 100% undivided interest in a property (now referred to as the "Venton Lake Project") comprised of 13 mining claims totaling 170 units in the Thunder Bay Mining District. See map #1 under Maps & Geology for information about the property location.
Regional Setting
The Venton Lake Project is in a possible new mining camp, since VMS deposits are normally found in clusters, as in Bathurst, Noranda and Matagami. This new area of interest is approximately 100 km south of "The Ring of Fire District", and the proposed new rail line to Cliffs Natural Resources Inc.'s Chromite deposit is slated to pass within a few kilometres of this property. See map #2 under Maps & Geology for the regional setting.
Local Setting (including Geology)
The Venton Lake Project is directly adjacent to the western boundary of a recently announced base metal discovery made by Northern Shield Resources Inc. (with a 49% JV interest) and Discovery Harbour Resources Corp. (with a 51% JV interest) on their Wabassi Property in Northern Ontario. The Wabassi property is being explored for reef-hosted PGE and massive sulphide Ni-Cu-PGE deposits as well as Cu-Zn-Ag-Au volcanogenic massive sulphides (VMS). The companies have identified two copper-zinc-silver VMS systems and believe they may have found a new VMS district in Northwestern Ontario.
The Venton Lake Project covers 2,720 hectares and extends from its eastern boundary, adjacent to the Wabassi Discovery, to its western boundary, bordering the Max property of Northern Shield, where drilling by Northern Shield has also encountered minor amounts of copper and nickel in six holes drilled. Northern Shield, the operator of the Max Property, holds a 60% JV interest with another explorer owning the other 40%.
Northern Shield proposes a model, based on geochemistry, in which the Max ultramafic intrusion is the "upstream" portion and the Wabassi mafic intrusion is the "downstream" portion of a continuous system. This model implies significant potential to find Ni-Cu-PGE mineralization in a counduit between the two bodies, or in the lower levels of the Wabassi intrusion.
According to Northern Shield, a VTEM survey was completed to the North and East of the Viking Gold property. This revealed two significant anomalies, the strongest of which is Anomaly "E". Four holes have been drilled into this target, with two of them having intersected massive sulphides:
Northern Shield has announced that it plans to drill a minimum of 10,000 metres exploring various conductors on the Wabassi claims in the spring of 2012.
See map #3 under Maps & Geology for the local setting, including the identification of targets on the Wabassi property adjacent to our Venton Lake Project. See also map #4 for information about the claims comprising the Venton Lake Project.
Note: Readers are cautioned that we have not stated, nor do we imply, that we will obtain similar exploration results on our property as those obtained from adjacent properties.
Option Agreement
Under the terms of the Option Agreement, the Company is required to:
a) pay $75,000 and issue 150,000 shares (completed after the receipt of regulatory approval);
b) pay $75,000 and issue 50,000 shares, 12 months from the effective date (completed on April 26, 2012);
c) pay $75,000 and issue 50,000 shares, 24 months from the effective date; and
d) pay $75,000 and issue 100,000 shares, 36 months from the effective date.
On completion of the payments and the share issuances, the Company will own 100% of the property; subject to a 2.5% net smelter returns royalty in favour of the vendors.
The Company has the option to accelerate the payments and share issuance at any time in order to acquire our 100% interest sooner. Certain other provisions, with respect to advance royalty payments and buy-back provisions for portions of the NSR, are discussed in the Company's financial statements.
The Venton Lake Project transaction was approved by the TSX-V on April 26, 2011. The transaction closed on September 19, 2011.
