PolarX Ltd (ASX:PXX) (FRA:PX0) has secured an option to acquire a mining lease agreement over the highly prospective Humboldt Range Gold-Silver Project in Nevada, which comprises 177 lode mining claims.
The option gives PolarX a 120-day exclusive period to finalise technical and legal due diligence on the project.
Year-round news flow
PolarX managing director Frazer Tabeart said Humboldt Range would enable the company to leverage its existing management team at its Alaska Range Project and give it near year-round news flow.
“Surface grades from rock-chip sampling and mine dumps at Humboldt Range are exceptionally high, with multiple samples exceeding 100 g/t gold along with high-grade silver, lead and zinc.
“It’s surrounded by large producing mines, which shows the geology is conducive to significant modern scale operations.
“Seasons in Nevada will allow us to work from April to December each year, enabling us to generate strong news flow virtually all year round and leverage our current team, most of whom live in relative proximity and are familiar with the region”.
Details of option agreement
PolarX has entered into an option agreement with Armada Mining Inc, which holds the rights to explore and develop the Humboldt Range Project, pursuant to a mining lease agreement with the registered owner.
The initial term of the mining lease agreement expires on August 13, 2030, but can be extended for two further periods of up to 10 years each.
Pursuant to the option agreement, PolarX paid an initial fee of US$35,000 to secure an exclusive option over the mining lease agreement for up to 120-days whilst the company conducts due-diligence investigations to further verify previous exploration results and confirm ownership of the underlying lode claims.
Due diligence is expected to be complete by April 30, 2021.
On satisfactory completion of due diligence, the company can exercise the option by issuing to the vendor 5 million fully paid ordinary shares, which will be escrowed for two-years, and making the following cash payments:
➢ US$35,000 to exercise the option
➢ US$70,000 on the first anniversary of the execution date
➢ US$70,000 on the second anniversary of the execution date.
On exercising the option, the company will also assume the obligations under the mining lease agreement to the owner, comprising:
➢ Payment of the following advance royalty payments, which shall be credited against any future production royalties in (2) below:
- 2022 claims fees payable before September 1, 2021; and
- Commencing September 2022, monthly payments of US$10,000.
➢ Upon commencement of production, payment of an NSR royalty on gold recovered at the following rates:
- Less than 15.6 g/t at 2.5%
- More than 15.6g/t to 31.1g/t at 3.75%
Humboldt Range, between two large-scale active mines - the Florida Canyon gold mine and the Rochester silver-gold mine - contains geology consistent with bonanza-style epithermal gold-silver mineralisation, which is well known in Nevada.
Very limited exploration has been reported.
Access to the project is straightforward via access roads off the I-80 Interstate, less than 15 kilometres to the west.
Widespread narrow vein mineralisation with visible gold occurs in the claims and was historically mined via numerous adits and underground workings between 1865 and 1927.
Mineralisation occurs in epithermal quartz veins of varying thickness (reported from 1 centimetre to 3 metres), either as isolated veins or as zones of sheeted/anastomosing veins within zones of intensely altered host rocks.
PolarX intends to immediately commence an evaluation of the length and continuity of the vein sets and a determination of whether the altered rock between the veins contains economically viable grades of gold and silver amenable to bulk mining.
Complement Alaska Range
The Humboldt Range project will complement PolarX’s Alaska Range Project, providing a longer field season for the company via access to another high-quality project in a Tier-1 jurisdiction which can be serviced by the company’s existing consultants.
Geologists from Victoria Gold Corp, who briefly evaluated the area between July 2005 and July 2009, collected rock-chip samples from outcropping quartz veins and sampled mine dumps near many of the abandoned underground workings and adits.
A total of 227 samples were collected on the claims being reviewed by PolarX.
PolarX is awaiting confirmational assay results.
Assay results on the historical data highlight the locally very high-grade nature of the mineralisation.
Of particular note are clusters of very high gold grades associated with narrow veins in the Indian Ike and Lois Vein mine dumps and veins in the centre of the Black Canyon Claims, where bonanza gold grades have been identified.
Of the 227 samples previously collected, 44 returned assays over 1g/t gold, of which 19 were above 10g/t gold.
Locally high silver and lead assays were also recorded.
The mineralogy, assay results and geological setting are all consistent with low-sulphidation epithermal mineralisation, typified by laminated quartz veins in altered and locally mineralised volcanic rocks.
In addition to evaluating individual high-grade veins as possible mining targets, PolarX intends to evaluate these structural corridors to determine if modern-scale bulk mineable widths and grades are present.
This will include geological mapping, rock chip and channel sampling and ground geophysics (IP to detect resistivity highs associated with the silicification).
PolarX has commenced staking around 100 additional lode claims in the Fourth of July area to consolidate the landholdings.