Honey Badger Silver Inc. said it has added to its portfolio of silver assets by agreeing to acquire SSR Mining Inc.’s Sunrise Lake silver project in the Northwest Territories. The project is located about 130 kilometres northeast of Yellowknife.
The company said Sunrise Lake contains an historic silver resource of approximately 12.8 million ounces in the indicated category and 13.9 million ounces in the inferred category. “This is a significant step in Honey Badger’s continuing strategy to acquire quality silver projects at a low cost in favourable and low-cost jurisdictions,’’ the company said.
The Sunrise Lake deposit is a volcanogenic massive sulphide deposit consisting of a steeply-dipping lens three to four metres thick, 120 metes wide and 190 metres long. The project consists of six contiguous mining leases covering 1,621 hectares.
Under the agreement, SSR Mining will retain a 4.0% net smelter royalty on any future production from the project. Half (2.0%) of the NSR can be repurchased by Honey Badger at any time prior to commencement of construction at the project for US$10 million. But the company has no obligation to do so and there is no cash component in the deal.
Honey Badger shares were unchanged at $0.07 and trade in a 52-week range of 31.3 cents and $0.07.
“Our corporate strategy is based on our thesis that the price of silver is poised for an increase because of increased silver demand for solar panel use and as a financial asset coupled with challenging mine supply issues,’’ said Honey Badger CEO Dorian (Dusty) Nicol.
“In addition to the historical resource defined to date, we believe the project has exploration potential, is being acquired for no cash consideration and has minimal holding costs,’’ he said. “Significant work was done by previous owners defining current resources, including the completion of over 20,000 metres of diamond drilling.’’
Honey Badger is a Toronto-based exploration company with projects located in historic silver districts, including the Plata high grade silver project located 165 kilometres east of the Yukon’s Keno Hill district. Its assets also include an expansive interest in the Thunder Bay Cobalt-Silver District in northwestern Ontario.
However, Honey Badger said it will not proceed with a previously announced plan to acquire a 100% interest in the Cachinal De La Sierra silver-gold project in Chile from Aftermath Silver. It said the purchase agreement has lapsed.
The company also said it has decided that it is not in its best interests to proceed with further exploration on mineral rights located in Northwestern Ontario, which it acquired from Romios Gold Resource Inc. As a result, it has terminated the deal with Romios.
The mineral resource estimate at Sunrise Lake was prepared by Roscoe Postle Associates for a company previously known as Silver Standard Resources Inc. in 2003. However, as a portion of the resource is not compliant with National Instrument 43-101 standards of disclosure, it cannot be relied upon in the absence of further work.
Source: Resource World