Coventry Resources (ASX: CVY) is a gold exploration company focussed on acquiring, finding and developing high-quality gold assets in the Superior Province in eastern Canada.
The company has confidence that an economically viable open pit mining operation can be developed at the Cameron Gold Deposit.
Coventry Resources acquires 100% interest in Cameron Lake Gold Project, Canada
Coventry Resources (ASX: CVY) has entered into an agreement with Nuinsco Resources and its subsidiary Cameron Lake Corporation to acquire a 100% interest in the advanced and high-grade Cameron Lake Gold Project in northwestern Ontario, Canada.
The news saw shares in the Coventry increase 5.8% to 27.5c during the morning trade.
Executive chairman Mike Haynes said the acquisition provided the Company with an exceptional opportunity to develop a substantial gold-mining operation in the near term, during a period of record high gold prices.
"It complements the Company’s Ardeen Gold Project, which is also located in the province of Ontario, and strengthens the Company’s project pipeline, with most mining permits already in place at the Cameron Lake Gold Project," Mr Haynes said.
The Cameron Lake Gold Project is located approximately 90km southeast of the city of Kenora in northwestern Ontario, Canada. The Project comprises a granted mining lease encompassing 979 hectares, together with twenty unpatented mining claims covering 1,984 hectares, and seven licences of occupation covering 72.5 hectares.
Gold was first discovered in the Kenora District in the 1890s. A number of small deposits produced approximately 250,000oz of gold, prior to the cessation of all operations before the Second World War.
The Cameron deposit was discovered by prospectors in 1960.
As previously announced by Nuinsco, independent consultants to Nuinsco have calculated a NI 43-101 compliant resource for the Cameron Lake Gold Deposit. Applying a 3.0 g/t cut-off, the measured, indicated and inferred resource comprises 2,567,000 tonnes @ 5.42 g/t Au for 447,421 oz gold
Coventry intends calculating a new resource for the deposit in the first quarter of 2010, taking into consideration current substantially higher prevailing gold prices.
A considerable amount of ore was mined and hauled to surface when the Cameron Lake Gold Deposit was subject to underground exploration between 1986 and 1990. Some 14,000 tonnes of mineralised material at an average grade of 4.46 g/t gold, containing 2,000 ounces of gold, was crushed and stockpiled.
Permitting for the project will be accelerated, with the aim of obtaining all permits necessary to commence
operations within 6 months of Settlement.
Numerous other regional targets will also be further evaluated, and opportunities to consolidate ownership of gold assets in the district will be prioritised.
Coventry has agreed to acquire a 100% interest in the Cameron Lake Gold Project from Nuinsco for C$100,000 on execution of a binding Heads of Agreement, C$5,900,000 on execution of a Definitive Sale and Purchase Agreement and the issuing of 12 million shares in Coventry Resources on execution of the Definitive Agreement.
Nuinsco will retain a 3.0% NSR royalty, although Coventry will have the right to buy-back 2.0% of this royalty at any time in the next five years by issuing Nuinsco C$2 million worth of shares in Coventry Resources at the prevailing market price.
Coventry is currently well financed with approximately $5.65 million cash at bank.
Numerous parties have expressed considerable interest in providing assistance to finance this transaction, and the Company anticipates finalising arrangements early in 2010.
On completion of this transaction the Company will be exceptionally well placed to rapidly advance the high grade Cameron Lake Gold Project in Ontario into production, while continuing to advance an exceptional pipeline of high grade gold assets elsewhere in Ontario.
