Hoping to develop a high-grade copper deposit near Chibougamau, Que., Seabright Explorations (TSE) has entered into a letter of understanding with Corner Bay Resources. Seabrex plans to acquire the private exploration company by merging one of its wholly owned subsidiaries with Corner Bay. In that case, Corner Bay shareholders would receive 49% of the issued and outstanding shares of Seabrex.
Terry Flanagan, president of the Muscocho group of companies, is president of Corner Bay.
What Seabrex has its eyes on is Corner Bay’s principal asset, a copper property consisting of 331 claims just south of Chibougamau, Que. A preliminary reserve on the property is estimated to contain 1.39 million tonnes grading 4.4% copper per tonne.
The proposed acquisition represents a change in direction for Seabrex, which, in the past, has concentrated almost entirely on gold properties in Nova Scotia. Earlier this year, however, the company determined that its most advanced project in Nova Scotia, Moose River, is too small to be considered economic. Not long after, Seabrex announced plans to shift its exploration focus away from Nova Scotia’s gold-bearing Meguma Group sediments.
“The projects that Seabrex has on the books at the moment just don’t appear to be good enough to mine,” said Seabrex President James Lalor. “But we believe it (the Corner Brook deposit) can be mined profitably.”
With this in mind, Seabrex will move underground at the deposit to try to increase the confidence of known reserves. The property is accessible by road and, should the project reach production, Lalor believes Seabrex will be able to truck the Corner Brook ore to one of the Chibougamau-area mills. Seabrex’s parent company, Westminer Canada, operates one of these mills at its Copper Rand mine, 10 km southeast of Chibougamau.
The transaction is conditional on, among other things, approval by the boards of directors of both companies, the shareholders as required, the courts of the Province of Ontario and regulatory authorities.
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