The Project hosts two past producing gold-silver mines, the Silver Bell Mine on the west and the St. Lawrence Mine on the east. Both mines operated in the early 1900s and the St. Lawrence was reactivated and operated in the early 1980s. Historical production records are incomplete but available information suggests that historical production at the St. Lawrence was approximately 0.22 ounces per ton (“opt”) gold and 3.8 opt silver. Smelter receipts for small shipments from the St. Lawrence indicate that some ore with much higher grades was shipped. For example, a smelter receipt from October 30, 1964 states that 8.027 tons were received grading 0.76 opt gold and 20.0 opt silver. Historical production at the Silver Bell averaged approximately 0.2 opt gold and 15.1 opt silver.
The shafts for each of the former mines are located 3,600 feet apart and the exploration hypothesis is that the two mines shared mineralized systems that may in part be contiguous. Surface mapping and geophysical surveying by the Company support this initial hypothesis and may indicate extension of the vein system farther east along strike from the St. Lawrence mine.
Frederick PEC acquired its interest in the Project from Peloton Minerals Corporation (“Peloton”) (CSE Symbol: PMC) (OTCQB Symbol: PMCFF) through Peloton’s wholly-owned subsidiary SBSL Subsidiary Corporation (“SBSL”) pursuant to an Exploration Agreement with a joint Venture Option (the “Peloton-Frederick Agreement”). Under the Peloton-Frederick Agreement, Frederick PEC may earn up to a 75% interest in the Project by spending a total of US$2,000,000 in exploration expenditures within six years and make annual option payments.
Frederick PEC may first earn a 51% interest in the Project by making annual US$10,000 option payments to SBSL and spending US$1,000,000 in exploration expenditures within four years with a minimum of $200,000 in expenditure during the first two years. Frederick PEC may earn a further 24% interest (the “Second Earn-In Option”) in the Project by then making annual US$25,000 option payments and spending an additional US$1,000,000 in exploration expenditures over a two-year period following the establishment of the first 51% interest, for a total of US$2,000,000 to earn a 75% interest. After Frederick PEC has earned either a 51% or a 75% interest, as the case may be, a mining venture or mining company may be formed with respect to the Project, and Frederick PEC and Peloton will contribute their respective share of further exploration and development expenditures. In the event that either party’s interest is diluted to ten percent (10.0%) or less, it shall relinquish its interest to the other party, in return for a royalty agreement that conveys to the diluting party a royalty of one percent (1.0%) of net smelter returns on all minerals thereafter produced and removed from the Project. The non-diluting party may, at any time, buy-down that royalty by one-half percent (0.05%), so that the total royalty is one-half percent (0.05%) of net smelter returns, by paying US$250,000 to the royalty holder. The Project is subject to an earlier outstanding 2% NSR, the majority of which can be bought down to one percent (1%), and a buy down option on the remaining claims is being sought.
In order to earn its 51% interest, the Company must make all of the exploration expenditures and annual option payments required to be made to SBSL to exercise its option to earn a 51% interest in the Project and has agreed to expend the minimum exploration expenditures to be made ($200,000) within one year of the execution of this Agreement.
Frederick PEC retains the right to earn the additional 24% Second Earn-In Option if it chooses to do so. If it elects not to earn the Second Earn-In Option, it shall transfer and assign the right to do so to the Company upon payment to Frederick PEC of 1,000,000 fully paid and non-assessable common share of the Company or an Affiliate company into which the rights under this Agreement may have been further transferred or assigned by the Company, subject to all regulatory and stock exchange requirements. To be clear, this provision shall not apply unless the Company is successful in having its current cease trading order lifted, otherwise this provision shall be null and void with no force and effect. In such event, the Company will be responsible for funding all additional exploration expenditures and option payments required to earn the Second Earn-In Option. If Frederick PEC elects to earn the Second Earn-In Option, it shall make the necessary exploration expenditures and option payments required to earn the Second Earn-In Option, provided however that the Company will be responsible for paying its proportionate share of such exploration expenditures and option payments equal to a ratio of 51 to 24 reflecting the respective proportionate interests of the parties in the Property. In the event that the Company does not contribute its proportionate share of such exploration expenditures and option payments and Frederick PEC has earned the Second Earn-In Option, the interest of the Company shall be diluted to 24% and the interest of Frederick PEC shall be increased to 51%.
Nine (9) vein intercepts were encountered ranging from 0.21 meters in core width to 2.8 meters
and an average thickness of 1.17 meters.
Average weighted values for the 9 intercepts was 4.94 g/T Au and 65.35 g/T Ag.
The 34.4 g/T Au intercept was encountered 40 meters down the dip of the veins from the 150
Level of the old workings demonstrating both the potential for grade and the potential at depth.
The 34.4 g/T Au intercept was encountered at the western limit of the 2019 drill pattern and
should be tested for the potential of a high-grade ore shoot based on that drill result and recent
An untested mineralized fault zone east of the mine was identified through geologic mapping and is coincident with the strongest VLF geophysical response on the property. This is a high priority drill target.
Drilling in 2019 tested only 150 meters of the approximately 1,100 meters of known strike length along the SBSL vein system. Additional geologic mapping, surface sampling and drilling is
recommended along the undrilled sections of the veins.
Several of the holes, including SL 19-4C and SL 19-12C below) intercepted additional veins that
do not appear to correlate with the two veins in the historical workings, opening the possibility of
a multiple-vein system.
On April 26, 2019, AFR NuVenture Resources [TSXV: AFR] announced that we have entered into an agreement whereby the Company may acquire a majority interest in the Silver Bell – St. Lawrence Gold Project, in the Virginia City Mining District of Montana, U.S.A. from Frederick Private Equity Corporation (“Frederick PEC”). Under the Agreement, AFR may initially earn a 51% interest in the Project by making annual US$10,000 option payments and spending US$1,000,000 in exploration expenditures within four years with a minimum of $200,000 in expenditures during the first year.
The Project comprises a 390-acre claim package located about 4 miles southwest of Virginia City in Madison County, Montana, and about 50 miles southeast of Butte, Montana. There is also an area of interest around the Project.