The financial crisis may have dried up capital for many mining companies in the West but not in China, where cash-rich companies are taking advantage of the credit crunch and going on shopping sprees.
The latest purchase is China Nonferrous Metals Exploration’s (CNME) 14.95% stake in Canadian junior Murgor Resources (MGR-V, MGRRF-O) — an exploration company in Kingston, Ont., that is earning a 100% interest from Hud-Bay Minerals (HBM-T, HBMFF-O) in three deposits (copper-gold and zinc) adjacent to the Snow Lake and Flin Flon mining districts of Manitoba. Murgor is also pursuing gold exploration in Ontario and Quebec.
CNME is majority owned by Chinese shareholders, including China Mining of Canada Corp., state-owned Beijing Donia Resources, whose mandate includes exploring and acquiring base metal resources worldwide, and other investors from China. Based in Markham, Ont., CNME has raised about $5 million so far, which it plans to invest in exploring for base and precious metals, primarily in northern Ontario.
CNME’s $810,000 private placement involves the purchase of 8.1 million Murgor shares for 10¢ apiece. CNME has the right to designate a person to Murgor’s board of directors.
“Murgor’s advanced Wim and Hudvam deposits, along with its significant prospective land package, represent great development and exploration opportunities,” Nick Zeng, a CNME director, said in a statement.
Murgor’s Wim deposit — about 16 km north of the town of Snow Lake in Manitoba — has indicated resources of 2.78 million tonnes grading 1.94% cop- per, 0.3% zinc, 1.88 grams gold per tonne and 7.53 grams silver for contained metal of 118.8 million lbs. copper, 18.4 million lbs. zinc and 167,840 oz. gold. In the inferred category, the deposit has 446,000 tonnes grading 1.12% copper, 0.43% zinc, 2.11 grams gold and 5.06 grams silver for 11 million lbs. copper, 4.3 million lbs. zinc and 30,260 oz. gold.
Hudvam — a gold-rich poly-metallic deposit 47 km northeast of the town of Flin Flon — has indicated resources of 854,080 tonnes grading 1.22% copper, 1.78% zinc, 3.82 grams gold and 13.84 grams silver for 23 million lbs. copper, 33.54 million lbs. zinc and 105,000 oz. gold. In the inferred category, Hudvam has 502,900 tonnes grading 0.79% copper, 1.33% zinc, 3.25 grams gold and 6.96 grams silver for 8.8 million lbs. copper, 14.8 million lbs. zinc and 52,550 oz. gold.
The resource estimates for both the Wim and Hudvam deposits were based on a 2% copper-equivalent cutoff grade.
Murgor also owns the Fon zinc deposit, about 40 km west of Flin Flon, which has an inferred resource of 4.5 million tonnes grading 0.25% copper, 3.63% zinc and 10.88 grams silver for contained metal of 25 million lbs. copper, 373.6 million lbs. zinc and 1.75 million oz. silver.
Finally Murgor’s Windfall gold property is about 55 km southeast of the town of Desmaraisville in Quebec, where Metanor Resources (MTO-V, MEAOF-O) operates the Bachelor Lake gold mine and mill. The property is linked to the Bachelor Lake mill by all-season gravel roads. Windfall is also 5 km north of the Barry open-pit gold mine, where Murgor retains a 1% net smelter return royalty.
In late August, Murgor acquired the right to earn a 100% interest in two gold exploration properties near Red Lake, Ont.: the Gullrock property, about 1 km east of Goldcorp’s (G-T, GG-N) Red Lake property, and the Premiere property in the Uchi Belt, immediately south of the Hudson-Patricia mine.
At presstime in Toronto, Murgor traded at 14¢ per share in a 52-week trading range of 4-29.5¢. The company has 45.6 million shares outstanding.
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