Formation acquires massive sulphide

Several major mining companies are reported to have expressed an interest in the Black Pine copper-cobalt-gold massive sulphide project recently acquired by Formation Capital (VSE) in the Blackbird mining district of Idaho.

The property, covering about 1,000 acres, is within the Idaho cobalt belt which hosts a class of Proterozoic-aged stratabound copper-cobalt-gold deposits unique within North America. The property is on the trend between Noranda’s Blackbird deposit and Cominco’s Iron Creek deposit. Black Pine was previously explored and has over 4,500 ft. of underground workings on two levels. The project’s preliminary reserves were last reported as totalling 580,000 tons grading 3.5% copper at a 2% copper cutoff, or 40 million lb. copper.

This reserve is based on only 1,800 ft. of over 5,800 ft. of mineralization traced along strike by trenching, and does not include stockwork mineralization known to surround the higher-grade horizons.

So far, seven mineralized horizons have been identified within the 200-ft.-wide zone, and past work suggests lower-grade stockwork copper mineralization is found between some (if not all) of the horizons. The initial work on the property in the late 1940s was focused on cobalt mineralization, but copper become the main target in the 1950s when assaying for gold or cobalt was not typically done. Cobalt recently surged in price to US$27 from US$14 per lb.

Formation has secured additional claims in the area, and is cataloguing all available data before starting its work program. The company’s lease option-to-purchase is for a term of 15 years. Work commitments include US$210,000 during the first 5-year period, and US$250,000 during the second and third 5-year periods.

Minor cash payments are required on a staged basis, and the property is also subject to a sliding scale net smelter royalty return (from 1% to 5%), based on the price of copper, applied to a buyout royalty cap of US$2 million.