McFarlane Lake buys $30M Abitibi site from Aris

McFarlane Lake Mining (CSE: MLM; US-OTC: MLMLF) is acquiring what it considers to be “one of the largest undeveloped gold properties in Ontario” from Aris Mining (TSX: ARIS; NYSE-A: ARMN) in a deal valued at $22 million (C$30.1 million).

The Juby gold project lies about 100 km west of the city of Temiskaming Shores and is geologically part of the Abitibi greenstone belt, which has produced over 200 million oz. of gold in its history.

Mark Trevisiol, CEO of McFarlane Lake, says the acquisition represents “a significant step forward” for the company in building its gold resource base, with the Juby property adding over 2.2 million oz. in contained gold. This, he adds, would move McFarlane Lake from an explorer into developer status. The company holds six projects in Ontario, three of which are past producers.

Four zones

The property has four mineralized zones (Juby, Golden Lake, Big Dome and Hydro Creek), with a combined resource of 21.3 million indicated tonnes grading 1.13 grams gold per tonne and 47.1 million inferred tonnes at an average grade of 0.98 gram gold.

All four zones, according to McFarlane Lake, would be amenable to open pit mining methods, and have the potential for further resource growth based on historical drilling records.

In addition to Juby, McFarlane Lake would also gain Aris’ 25% joint venture interest in the nearby Knight property, which historically produced 232,000 oz. at 5 g/t gold.

For the property sale, Aris will receive $10 million cash on closing and another $12 million worth of McFarlane Lake shares. Completion of the transaction is conditional on McFarlane Lake raising at least $10 million in a concurrent financing.

McFarlane Lake’s Canadian-listed shares surged 10% on the acquisition, taking its market capitalization to C$13.5 million.