Sixty North accelerates Mon property earn-in, reports new nickel-cobalt discovery

Sixty North Gold Mining‘s (CSE: SXTY) proposed accelerated earn-in of the past-producing Mon gold mine in Northwest Territories has been approved by the project holder New Discovery Mines, which will convert its direct interest in the property into a participating interest in Sixty North.

Located 40 km north of Yellowknife, the Mon property has produced over 15,000 tonnes of ore to depths of 15 metres below surface, recovering an estimated 15,000 oz. of gold. Sixty North is looking to restart production by mining and milling the high-grade A zone in a manner similar to past operations.

Under the original earn-in agreement, Sixty North can earn an 80% interest in the Mon project by spending at least $6 million (of which $5.7 million has already been spent), and the remaining 20% carried interest can be acquired in exchange for 25% of its outstanding common shares.

Earlier this month, Sixty North proposed to accelerate the earn-in process by issuing approximately 49.5 million common shares – or roughly 25.5% of those outstanding – to acquire 100% of the property, subject to a 2% net smelter returns royalty.

New Discovery, now a pending controlling shareholder of Sixty North, is owned by Dave Webb, Sixty North’s president and CEO, and Gerry Hess, both of whom had been involved with the Mon gold property for over 30 years.

Webb took on the project from Cominco in 1988 through an option agreement. Hess was the mine manager between 1991 and 1997, when it was in production, and now serves as president of New Discovery.

“We believe that the Mon property has tremendous potential and see no reason why it cannot extend to depths similar to the other past-producers in the belt, providing many decades of operations,” Webb said.

Nearby producers include GoldMining‘s (TSX: GOLD) Discovery mine located 45 km north, where 1 million oz. were mined from 1 million tonnes of ore from surface to depths of 1,200 metres; and the Con mine located 45 km south, which produced over 6 million oz. of gold and is now owned by Newmont (TSX: NGT; NYSE: NEM).

Nickel discovery

Meanwhile, the first nickel showing ever reported in the Yellowknife gold belt has been reported on the Mon property. According to Sixty North, an unusual nickel-cobalt PGM (platinum group metals)-rich zone associated with the 600-metre-thick Eastern Mafic trend has been identified.

The new discovery is located 1,800 metres south of the A zone, where a prospecting program produced grab samples returning over 1% nickel and 0.19% cobalt.