Kuya Silver is taking the reins to explore near some historical mine properties that were part of Ontario's silver rush mining boom at the turn of the last century..
At an exploration project called Silver Kings, the Vancouver junior miner began a 3,300-metre drilling program last spring to explore areas within a larger 10,000-hectare property, host to more than 50 former silver and cobalt mines. It's part of a joint venture partnership arrangement with Toronto's First Cobalt, the company that first assembled this exploration land package.
The Silver Kings Project runs along the eastern shore of Lake Temiskaming between the town of Cobalt and mining ghost town of Silver Centre.
Kuya has taken over exploration for First Cobalt which decided to focus its efforts on raising money to refurbish and bring a nearby shuttered refinery back into production.
Kuya's exploration program wrapped up in June and the company is awaiting results from the assay lab. The company believes there's real potential to make some major high-grade discoveries that could be brought into production.
Kuya bought a portion of this property last spring, a 900-hectare patch called the Kerr Property, for $4 million. It's in this area that Kuya was drilling for silver last spring, the same spot where First Cobalt did most of its exploration in looking for cobalt between 2017 and 2019.
The two companies had an option agreement, enabling Kuya to pick up a majority ownership stake in the entire property.
Kuya now wants to exercise that option, sending more than 670,000 common shares First Cobalt's way as an initial payment on the path to owning up to a 70 per cent stake of the Silver Kings Project.
To fully exercise the option, Kuya must pay an additional $1 million to First Cobalt and spent $4 million on exploration work over the next three years. The payment increases to $5 million should Kuya publish a silver resource estimate that exceeds 25 million ounces of silver.
First Cobalt retains a right to refine base metal concentrates at its refinery as well as a back-in right for any discovery of a primary cobalt deposit.
Kuya will be concentrating its exploration activity near Silver Centre and Schumann Lake which produced millions of ounces of silver from a number of now-closed mines, as well as around New Lake Creek where exploration drilling by First Cobalt in 2018 intersected silver and cobalt.
Based on a compilation of all the historical exploration and mining data from this district, Kuya has produced a list of targets with high-grade silver potential. The company is conducting surface work, including detailed mapping, geophysics and geochemistry in order to line up drill targets.
In a news release, Kuya said last spring's drill program was intended to follow up on historical drill results around certain geological structures that could have the potential to host significant tonnes of high-grade mineralized material.
Company president David Stein noted that "several mineralized veins" were drilled into at one target site at a depth of 140 metres. Assay results are pending.
The Temiskaming area is a side project for Kuya. Its main mining interest is its Bethania Project in Peru where there are plans to bring a former silver, lead and zinc mine back into production.