Jonpol, Ft. Knox to JV Newfoundland prospect

Two Toronto-listed junior companies are joining forces to explore a gold prospect on the Avalon Peninsula in Newfoundland.

An agreement between Jonpol Explorations (JON-T) and Fort Knox Gold (FNX-T) lets Jonpol earn a 50% interest in the property, which had been dealt to Fort Knox by local prospectors. Three gold showings are known to exist on the 27.5-sq.-km property, which is 20 km southwest of St. John’s.

Two of the gold occurrences, Roadcut and Steep Nap, were already known. Roadcut, as the name implies, is in an outcrop of

felsic fragmental rocks exposed at the side of the Trans-Canada Highway. Previous chip sampling returned 3.5 grams gold per tonne across 10.5 metres. At Steep Nap, quartz-hematite-potassium feldspar veins in breccias carry about 1 gram gold per tonne.

At the third showing, named Santana, angular fly-rock from a trench dug to place a fibre-optic cable was discovered by prospectors, who later excavated a prospect pit near the cable trench. Seven of the fly-rock fragments, which are mainly silicified and sericitized rhyolite, carried gold concentrations of 4.4-31.6 grams per tonne, plus hematite, pyrite and galena.

Jonpol has agreed to spend $250,000 on exploration in the first year of the 4-year agreement, and $3 million over the life of the deal, including option payments of $130,000 to the prospectors to secure Fort Knox’s ownership of the property. Fort Knox receives $25,000 in cash. The prospectors retain a 3% net smelter return, which Fort Knox can buy down to 1% for $2 million.