Grayd picks up more ground in Nfld.

Vancouver — With an eye on increasing its land position in the Botwood Basin district, Grayd Resource (GYD-V) has inked a deal with a private mineral company, South Coast Ventures, to acquire a 100% interest in 261 claims located near the historical mining town of Baie Verte.

The new claims, known as the Dorset property, span 22 km of the Baie Verte line, a major northeast-trending structure that separates ancient North American continental margin rocks of the Humber Zone from intra-oceanic rocks of the Dunnage Zone.

The Baie Verte Line and its subsidiary structures can act as pathways for the mineralizing fluids that potentially give rise to gold deposition. This major fault system is the source of many gold prospects and deposits on the Baie Verte Peninsula. Grayd reports that the property is transected by a highway and a powerline, and is only a few km from a deep sea port.

According to the terms of the option agreement with South Coast, Grayd must make staged cash payments totalling $125,000 and the issuance of 500,000 shares over 4 years. Grayd must also spend $250,000 on exploration over four years. South Coast will retain a 2% net smelter royalty, 50% of which Grayd has the option to purchase for $1.0 million. Upon signing, Grayd has agreed to pay South Coast $5,000 and issue 25,000 common shares. Within six months, Grayd will pay an additional $5,000 and issue an additional 25,000 shares to South Coast. Grayd will also reimburse South Coast for its staking costs.

The only systematic gold exploration work in the Baie Verte area took place from 1986-to-1989 and led to the discovery of several hundred gold showings and prospects and five new gold deposits. The high-grade Rambler volcanogenic massive sulphide mine, the Nugget Pond gold mine and the Pine Cove, Deer Cove and Stog’er Tight gold deposits, are located to the north and northeast of the Dorset property.

Preliminary work on the Dorset property by past operators resulted in the discovery of seven gold zones, including a narrow high-grade vein, dubbed the Dorset Vein. Grab samples taken by Noranda yielded up to 408 grams gold per tonne and channel samples were as high as 177 grams gold over 0.35 metre; 56 grams gold over 2.5 metres and 41.6 grams gold over 1.5 metres.