Metco shares surge on Noranda option

Shares in Metco Resources (MKO-V) surged 2.5, or about 21%, to 14.5 in late afternoon trading in Vancouver on Dec. 22, after the junior granted Noranda an option to earn up to a 70% stake in its base metal properties in the Rouyn-Noranda region of Quebec.

The major can initially earn a half-interest in the Rouyn, d’Alembert and Lake Dufault (excluding the eastern and western blocks) properties by spending $2 million on exploration and paying up to $125,000 in cash over three years.

Noranda can then up its stake to 65% by completing five more years of work and a feasibility study. Another 5% can be had by bringing any of the projects into production.

A drill rig is on its way to the Rouyn property where diamond drilling will follow-up on geophysical targets outlined by Pulse-EM surveying in October. Metco says the anomalies indicate the presence of sulphide conductor zones with a radius of up to 150 metres.