Kenorland Grants Auranova Option to Acquire 70% Interest in South Uchi Project
Kenorland Minerals Ltd. has entered into a definitive agreement with Auranova Resources Inc., granting Auranova the option to earn up to a 70% interest in the South Uchi Project, located in Northwestern Ontario’s Red Lake District. This partnership aims to unlock the untapped potential of the project’s gold-rich geology and large-scale anomalies.
Key Terms of the Agreement
Under the agreement, Auranova can acquire an initial 51% interest in the project by:
1. Paying C$250,000 upon signing the agreement and an additional C$250,000 upon receiving a drilling permit.
2. Completing 15,000 metres of diamond drilling or incurring C$8 million in expenditures within two years of receiving the drilling permit.
3. Issuing 19.9% of its equity to Kenorland and maintaining this equity stake until raising a minimum of C$10 million through share issuances.
4. Granting Kenorland board representation and the right to maintain pro-rata equity ownership.
Kenorland will act as operator during this phase, earning a 15% management fee on expenditures.
Auranova may earn an additional 19% interest, bringing its total stake to 70%, by spending C$10 million on further exploration within three years. If the second option is not exercised, a 2% interest reverts to Kenorland, resulting in a 51%-49% joint venture.
Exploration Highlights: South Uchi’s Potential
The South Uchi Project spans 90 kilometres along major east-west deformation zones at the boundary between the Uchi and English River subprovinces. The geology includes strongly sheared metavolcanic rocks and iron formations, similar to Kinross Gold’s Great Bear Project located 45 kilometres west.
Exploration between 2021 and 2023 defined two large-scale gold-in-till anomalies:
1. Papaonga Target:
• A 5-km-wide anomaly extending 8 km along glacial ice flow direction.
• Gold-in-till dispersal plumes with up to 951 pristine gold grains.
• Rock samples returned assays of up to 13.35 g/t Au and 60.4 g/t Ag.
• Gold mineralization occurs across diverse lithologies, including diorite plutons, clastic sedimentary rocks, and mafic volcanic rocks, all affected by multi-phase hydrothermal alteration.
2. Target B:
• Features a geochemical signature of gold, tellurium, and tungsten, warranting further exploration.
Future Work and Joint Venture Terms
If Auranova completes its earn-in and delivers a NI 43-101 Preliminary Economic Assessment (PEA) outlining at least 1 million ounces of gold equivalent, Kenorland will retain a 30% free-carried interest. Should a joint venture interest dilute below 10%, it will convert to a 1% net smelter return royalty.
The South Uchi Project presents a prime opportunity to explore untested gold systems in one of Canada’s most promising mining districts. With systematic till sampling and ongoing prospecting, the project is poised to reveal further high-grade gold discoveries.
Tags: Northern Ontario / Deals & Financial / Battery Metals / All Articles