Scottie to acquire AUX, merge Golden Triangle properties in BC

Scottie Resources (TSXV: SCOT) has entered into a letter of intent with AUX Resources (TSXV: AUX; US-OTC: AUXRF) proposing a merger of the two companies that would consolidate the two companies gold-silver holdings in the Stewart mining camp in B.C.’s Golden Triangle into a total of 522 sq. km.

Scottie’s acquisition of AUX would expand its Cambria project, which is adjacent to Ascot Resources’ (TSX: AOT) Red Mountain property, to 274.7 sq. km from 150 sq. km, and also adds ground adjacent to Pretium Resources’ (TSX: PVG; NYSE: PVG) Brucejack.

Scottie would acquire all of the AUX shares outstanding by exchanging one share of Scottie for each AUX stock. Upon completion, AUX holders would own approximately 31% of Scottie.

“Historically the Stewart mining camp has operated as a patchwork of small land packages, which unfortunately impedes regional exploration in the area. The extensive and complimentary land positions of Scottie and AUX naturally support consolidation, creating a geological relevant district scale mineral tenure remarkably endowed with historic mineral showings and small-scale past-producing mines,” Brad Rourke, Scottie’s CEO, said in a news release.

Upon completion of the merger, the expanded Scottie would hold three past-producing projects in the Stewart camp – Scottie Gold Mine, Georgia and Cambria. The expanded Cambria would include five historical mines. All three would be scheduled for drilling in this year’s field season, with a 12,500-metre, three-rig program planned for the Scottie gold mine.

The combined company would have over $6 million in cash.

Closing of the transaction is subject to the two juniors entering into a definitive agreement as well as AUX shareholder and regulatory approvals. A meeting of AUX stockholders is expected to be held in June, with a potential closing expected soon after.

Scottie’s Scottie gold mine project includes a historic mine that generated 95,426 gold oz. between 1981 and 1985 from material with an average head grade of 16.2 grams gold per tonne. In addition to six portals, a rail system and 7 km of drifts, the road-accessible site with an active mine permit includes a 200 tonne-per-day mill. A number of additional high-grade mineralized veins have been identified at surface.

AUX holds a total of 270 sq. km in the Golden Triangle. At its Georgia project, the Georgia River mine produced gold from material with an estimated head grade of 23 grams gold per tonne and last operated in 1939. There are over 1.2 km of underground workings at the site, over three levels.