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Pen Gold Project

Pen Gold Project

Pen Gold Project

Project

Location


The Pen Gold Project is located 75 km southwest of the major gold mining centre of Timmins, Ontario and is comprised of a 19,333 ha (193 sq. km) land package. There is excellent infrastructure in this well established mining camp, with power, natural gas, highways and rail transportation all close by. In addition, because of the close proximity of infrastructure, the project may be worked year round, allowing for efficient exploration and mining operations.

To the northeast is the Timmins West Mine of Tahoe Resources Inc., which had probable mineral reserve of 392,000 ounces of gold at an average grade of 4.2 g/t as of January 2016, and to the southwest is the Borden Lake deposit, which last had reported indicated resources of 1.6 million ounces of gold at an average grade of 5.39 g/t.

Significant occurrences of Timinskamin-style conglomerates have been mapped on the project ground, indicating a very high likelihood of proximity to a major fault zone, which is likely the western extension of the Porcupine-Destor Deformation Zone (PDDZ). Over 110 million ounces of gold has been produced from mines located in close proximity to the PDDZ.

Pen Gold Project Location and Land Position





Property Ownership


Pen Gold North
The claims were acquired from Rio Tinto plc in March 2013. Rapier has the rights to all non-talc minerals on certain claims through a lease and sublease with IMERYS which operates the Penhorwood Talc Mine on the property.

Pen Gold South
The claims were purchased from Rogue Resources, replacing the previous License and Option Agreement between Rapier and Rogue.

Pen Gold East
Rapier holds an option to acquire 100% of the gold rights on these claims subject to the payment of certain fees and the issuance of Rapier shares over the course of the next four years.

History


The northern portion of the property was originally explored and developed for its asbestos potential by Johns Manville Canada Inc. from the 1950s to the 1970s. During that period, many serpentinite zones in the region were evaluated for their asbestos mineralization potential. In 1947 the first reported work in the immediate area of the ultramafics was carried out by Pen-Star and Pen-More Syndicates and consisted of geophysical and geological work carried out as a guide to prospecting for sulphide deposits. In 1950, asbestos was discovered by J.C. Bromley while prospecting. The property was acquired by Johns Manville in 1951, wherein an exploration program commenced that continued for over 20 years, consisting of geological mapping, magnetic and electromagnetic surveys, and diamond drilling. This work was centred on the Reeves Mine but covered a number of other asbestos showings in the area.

The talc carbonate mineralization of the Penhorwood ore body was defined in 1973, and Johns Manville operated the Penhorwood talc mine and flotation plant from 1974 to 1976, at which time a decision was made to cease operations. Steetley PLC bought and resumed operations in 1978 through to 1988, at which time Luzenac Inc., then an indirect subsidiary of Rio Tinto plc, acquired the mine as part of its North American expansion strategy.

Gold was initially discovered in1998, in core holes which were drilled for development of the Penhorwood talc mine. Visible gold was seen, but not brought to the attention of Rio Tinto management until 2001.

The gold price in 1998 ranged from US $273 to US $313 but rose to a high of US $833 at the end of 2007.
In 2008 Rio Tinto conducted a seven hole drill program, testing the northerly extension.

This program was 1,305 m in total, to a max depth of 150 m with spacing of 50 to 100 m

More significant intersections in these holes included;

22.1 gpt Au over 0.30 m,
9.96 gpt Au over 2.0 m,
13.3 gpt Au over 0.30 m


After assay results from these seven holes Rio Tinto, on the recommendation of its consultants, was able to stake a further 4,760 ha of land.

Rapier's immediate priority is to complete additional drill holes to expand the data developed in the Rio Tinto drilling, this work commenced April 16th, 2013.

Geological Setting


Regional geology overlain by rock sample points and property boundaries



Regional Geology


The Pen Gold Property is situated in the northern part of the Swayze greenstone belt within the newly defined Wawa-Abitibi Terrane of the Superior Province. The Swayze belt is considered to represent a deeper erosional level of a once continuous Abitibi greenstone belt as it contains many of the same structures and stratigraphic assemblages.

A key conclusion of the geochronological studies in the Swayze belt as well as throughout the Abitibi belt is that there is a coherent stratigraphy throughout the southern Abitibi greenstone belt that also encompasses the Swayze, Shining Tree and Montcalm greenstone belts and that despite separation by large granitic intrusions, they comprise part of a single greenstone belt.

Property Geology


Pen Gold North
The focus of gold exploration within Pen Gold North is ultramafic rocks that host the Penhorwood talc deposit which is currently being mined by Imerys Talc Canada Inc. The ultramafic rocks have been interpreted as basal olivine cumulate dunites that erupted as part of large channelized komatiitic flows and were serpentinized shortly after emplacement. The komatiites are bounded to the west by mafic to felsic volcanic flows. These flows were subsequently intruded by a gabbro/quartz diorite complex to the east. Serpentinized komatiites bound the ore body to the south and southeast.

The primary lithology of the Penhorwood talc orebody is described as talc-carbonate. The primary carbonate is magnesite with minor amounts of dolomite and trace calcite. The orebody is bounded by a gabbroic intrusive to the east and aluminous mafic to felsic volcanics to the west. The talc-carbonate alteration transitions into serpentinite toward the south represent the metasomatic alteration front boundary. All of the basal cumulate dunitic komatiite units in the region have been serpentinized but still retain their original cumulate textures.

Cross-cutting the orebody are two sets of dykes that generally strike either north-south or northeast-southwest. The north-south dykes are related to the Matachewan dyke swarm of diabase composition. As these dykes approach the Penhorwood orebody they have been altered to chlorite with a significant alteration zone around them up to 10 m wide. The northeast-southwest dykes appear to be related to the Abitibi dyke swarm and are of lamprophyre composition.

Pen Gold South
Pen Gold South contains all of the principal southern Abitibi assemblages in the northern Swayze belt. The oldest rocks in the project area occur within the core of the Hanrahan anticline in the vicinity of Hanrahan Lake near the eastern claim boundary. The predominant lithological units are intermediate to felsic volcanic rocks with subordinate mafic and ultramafic intrusive rocks, and have been correlated with the Deloro Group.



Royalties


Pen Gold North
2% NSR royalty, payable to Rio Tinto plc., for all gold and all metal by-products (whether precious or base metals) contained in ore mined primarily for gold from Pen Gold North after commencement of commercial production.

Pen Gold South
0.75% NSR royalty, payable to Rio Tinto plc., for gold produced from Pen Gold South after commencement of commercial production.

Rapier has the option to purchase from Rogue the claims making up Pen Gold South if within the term of the License and Option Agreement (five year initial term, with a right to renew for a further five years on two separate occasions), it publishes a technical report that is compliant with National Instrument 43-101, which establishes measured and indicated mineral resources valued on gold.

The following chart sets out royalties payable on certain Pen Gold South claims:

Township Mining Claim Number Summary of Agreement
Penhorwood 4221929 3% NSR applicable to iron ore and other minerals, Buyback provisions: 1% of the royalty for iron ore and all other minerals may be purchased for $1,000,000; a second 1% of the royalty for iron ore and all other minerals may be purchased for a further $1,000,000 and the final 1% of the royalty on iron ore only may be purchased for a third $1,000,000
Penhorwood 4246167 2% NSR on all metals, 1% buyback for $1,000,000
Penhorwood 3000603 2% NSR on all metals, 1% buyback for $1,000,000
Penhorwood 3000604 2% NSR on all metals, 1% buyback for $1,000,000
Penhorwood 3000605 2% NSR on all metals, 1% buyback for $1,000,000
Penhorwood 3019024 2% NSR on all metals, 1% buyback for $1,000,000
Penhorwood 4220806 2% NSR on all metals, 1% buyback for $1,000,000


Pen Gold East
2% NSR royalty on all diamonds, gems, other precious and semi-precious stones, metals, bullion, and concentrates from Pen Gold East. Rapier may, at any time, purchase one-half of the royalty interest (1%) for $2,000,000.