Kermode Resources Ltd. (KLM.V) - Little Bay, Big Moves

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$3.82 Million Market Capitalization

Kermode Resources Inc. KLM announced on April 26, 2022, that it has received approval from the TSXV exchange for the Mineral Property Purchase Agreement to acquire the Little Bay copper project from Grassroots Prospecting Group in Newfoundland. All shares issued are subject to resale restrictions under applicable securities registration and the rules of the TSXV. No finder's fees were paid in connection with this transaction.

“This is an aggressive deal with bullish partners. When I first joined the Board of Directors of Kermode in January 2020, I attempted to do a deal with the prospectors behind this Little Bay Copper deal but it didn’t happen.”

“I am grateful that I can now do my first deal as CEO of Kermode with this crew. Our plans include an immediate campaign of prospecting with marketing videos showing selective sampling as we hunt for high-grade copper at the known mineral occurrences on the project,” said Peter Bell, CEO of Kermode.

Back by popular demand, here I am to cover another mining-related press release. First, let's talk about the Little Bay Property. Unsurprisingly, the property is located immediately north of the town of Little Bay on the coast of north-central Newfoundland. It is worth noting that the Little Bay Property is the host of past copper-producing deposits such as the Whalesback Mine and the Betts Cove Mine.

With this in mind, the area in between these two deposits includes much of the claimed property, which is entirely unexplored or under-explored. Historically, there are four mines on strike nearby, including the aforementioned Whalesback and Betts Cove mines. The remaining two mines include the Little Deer Mine and Little Bay Copper Mine.

Click to be redirected to the data room where additional maps can be found!

Referring back to the Whalesback and Betts Cove Mines, the Whalesback Mine was active from 1965 to 1972 and produced a total of 3.8 million tons of 1% Cu. The mine itself was located 400 meters from the property along the strike. The Betts Cove Mine operated from the 1870s to 1884. Grade and tonnage are unknown, however, the mine was profitable enough to allow a town of 2000 people to thrive, albeit briefly.

Similar to the Betts Cove Mine, very little information can be found on the Little Deer Mine. Finally, the Little Bay Copper Mine was active from 1874 to 1894 and produced an estimated 545,000 tonnes at 2.5% Cu. With our little history lesson out of the way, let's talk about the deposits located on the Little Bay Property.

Little Bay Deposits

Disclaimer: The information provided below is taken from government reports available online, which can be found here. All of the historical work and conclusions described below were carried out by arm's length third parties. As such, Kermode has no information about the mining assay or methods used.

The Company also has no information regarding whether work was carried out under the supervision of a Qualified Person. That being said, these records should not be relied upon without further work being carried out at and around the project under the supervision of a Qualified Person. With that out of the way, let's talk about these deposits, starting with the Clam Pond deposit.

Clam Pond

Major Commodity: Gold

DDH: Not Drilled

Record ID #5250

Results: Data revealed a grab sample that assayed 0.56 g/t Au from altered mafic volcanic rocks with quartz veins. These samples include 5.0% pyrite and chalcopyrite but were not assayed for copper. More information can be found in the provided data room.

Little Bay Head

Major Commodity: Copper

Secondary Commodities:  Zinc, Iron

DDH: Drilled

Record ID #576 

Results: The Little Bay Head deposit includes a single shaft determined to be at least 8.5 meters deep. The geology of the area is similar to Whalesback and Little Bay Mine areas which lie along the strike approximately 10 kilometers to the southwest. Rock sampling conducted over the showing produced five anomalous gold valued with corresponding anomalies of Ag and Cu. Samples were taken from old trenches and waste dump material around the shaft site.

Souther Arm

Major Commodity: Copper

DDH: Not Drilled

Record ID #4922

Results: The Southern Arm showing includes a shaft located approximately 850 meters southwest of the road to the Southern Arm and 600 meters south of the shoreline. The general location is just west of Wild Blight and highway 292 to Little Bay. Three geophysical survey lines utilizing VLF were emplaced across the claims between Wild Blight and Southern Arm, in addition to a soil sample line that followed the east-west trending Southern Arm highway. Claims were canceled in July 1990.

Shimmy Pond

Major Commodity: Gold

DDH: 4

Record ID #4923

Results: The Shimmy Pond prospect includes a shaft located in the northeast corner of Shimmy Pond. Seven grab samples were collected from the area by U.S. Borax in 1984 returning 4 assay values in the range of 214 to 267 ppb Au and three anomalous values of 6.73 g/t Au, 1.71 g/t Au, and 15.9 g/t Au, as well as up to 6.0 ppm Ag.

Six channel samples of variable length were taken across the northeast side of the shaft and returned a
collective assay grade of 0.217 oz/t Au over 1.8 m. An unspecified interval of this collective sample, estimated to be about 0.4 m, returned an assay value of 0.675 oz/t Au.

Base metal values were very low, less than 100 ppm to be precise. A four-hole diamond drill
program at the shaft site encountered only minor elevated to anomalous Au: 256-472 ppb; 1.17 g/t over 1.5 m; and 4.57 g/t over 1.5 m. Twenty-two 1.0 m channel samples taken from the Shimmy Pond Zone and the nearby Hilltop Zone produced mainly elevated to anomalous values in the range 740 to 4330 ppb Au.

Otter Island

Major Commodity: Gold

Secondary Commodities: Copper

DDH: Not Drilled

Record ID #4925

Results: The Otter Island showing has been subject to trenching. Gold mineralization on Otter Island has been found to be associated with pyrite and chalcopyrite in a 20 cm-wide cherty interflow metasediment within pillow basalts. Mineralization is exposed mainly within and around several old pits which had been dug in the center portion of Otter Island to test chalcopyrite-rich shear zones.

A grab sample of a 20 cm wide cherty interflow sediment containing up to 15% pyrite and chalcopyrite within pillow basalts assayed 3.86 g/t Au. Three other samples taken within the general area of the old test pits returned Cu values in the range of 1.78% to 5.16%. Corresponding Au results were 540, 606, 650, and 810 ppb Au.

A resample of the cherty, sheared interflow sediment in 1991 returned assay values of the 10.4 g/t Au and 2.22% Cu over 20 cm. Gossanous chlorite schist hosting 15% sulphide, collected from old dump material at the pits, yielded 1.2 g/t Au and 1.98% Cu. An earlier value of 3.03% Cu had been reported by Labrador Mining and Exploration Ltd. for one of the test pits in 1977.

Acquisition Details

The total work commitments are $4,250,000 over 5 years with $100,000 due by the first anniversary. Over the life of the deal, the total payments include 33,000,000 common shares in the capital of Kermode plus $262,000 cash.

The vendor group comprises six private Canadian individuals. The agreement provides for a two percent royalty with a buy-back of 1% for $2,000,000. Planet X Exploration Services Ltd. has a right of first refusal for all exploration work contracted by Kermode over the life of the option deal.

Breakdown of total work commitments

“The government records on the mineral occurrences covered by this land package may not have the most impressive grades versus other old mines active around the year 1900, like the York Harbour Mine that I previously staked and optioned to York Harbour Metals Inc.

But the land package we have optioned to Kermode in this Little Bay Copper deal could be very rich. I see the potential for us to win by doing new things in old places and old things in new places with this project,” said Wesley Keats, Planet X Exploration Services Ltd.

In addition to Kermode's latest acquisition, the Company also announced on April 26, 2022, a non-binding Letter of Intent (LOI) for a purchase option on the KHRYSOS GOLD project from Aurum Vena Mineral Resources Corp. in British Columbia (BC). The Project comprises BC mineral title numbers #1088992, 1095266, 1095267, and 1095268, which is approximately 750 hectares with potential for significant gold endowment.

"Milo Mielniczuk worked for Kermode at the Mowich project in April 2022...I believe this project has the potential to yield impressive gold numbers and Milo is uniquely positioned to do an exciting work program of intensive exploration of the rich surface showings identified in historical work at the project. I am grateful to him for allowing Kermode an opportunity to share in these claims with this letter of intent to option these claims,” said Peter Bell.

There is a 2% net smelter return royalty payable to the vendor where each one percent can be bought down for $1,500,000. The vendor has a right of first refusal for all exploration work contracted by Kermode over the life of the options deal. Furthermore, the vendor has sale participation right, whereby they shall receive 10% of any proceeds received by Kermode from any future sale or disposition of any interest in the property.

Summary of expected payment for the option

Lastly, it should be noted that Kermode's option agreement for the Vidette Lake project, located in BC, has expired on its terms. The Company announced last year that it had exercised its option to acquire a 100% interest in the Vidette Lake gold project from Strata GeoData Services Ltd. However, Peter Bell claims that, although the Company was excited about the 2022 exploration program, Kermode was unable to establish a mutually agreeable work program with the vendor.

Authored by Keiran Robertson, Equity.Guru

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.