Grenville Gold (TSX.V: GVG), a sedate performer over the last few years on the TSX Venture board has shaken off its lethargy and made some big moves over the last couple of weeks. The company’s principle asset until now has been a 50% interest in a diamond property in Ontario known as the Parkman.
But this month, Grenville announced the acquisition of up to 90% of Peruvian exploration company Inversiones Mineras Alexander S.A.C. (“Alexander”). This firm is the primary option holder of the Chorobol gold/copper/molybdenum property in central Peru that is adjacent to a 600 m section of land that has a historical resource estimate of approximately 400,000 ounces of gold. The company is seeking to acquire that ground as well.
Subject to the terms in the agreement, Grenville will:
a) Issue 1,000,000 common shares from its treasury at a deemed price of $0.30 per share in
exchange for 70% of the common shares of Alexander. These shares are to be released
1/3 upon the closing, 1/3 at the end of one year and 1/3 at the end of two years from the
closing;
b) A payment of US$1,000 upon signing of the letter of intent and US$10,000 upon closing;
and
c) An agreed work program over the first year from the closing to be developed jointly by
Alexander and Grenville with respect to Chorobal based on a minimum operating budget
of US$500,000.
The Chorobol properties are located in the Department of La Libertad, 65 km southeast of
Trujillo, Peru and 35 km from the Coast. Alexander controls 17,900 hectares of mining claims in
this region where a large Gold, Molybdenum and Copper hydrothermal System has been
identified adjacent and on strike to the Chorobol properties based on findings from a 1998 report
from Savage Exploration of Peru.
Coincident with the property acquisition is the addition to its board of Len DeMelt, a seasoned mining executive who has participated in the start-up of 6 major mines over the last twenty years including Gulf Oil's Rabbit Lake mine (uranium), Syncrude mine (oil sands),
Denison Mines' Quintette (coal), Homestake's Golden Bear mine (gold), BHP's Ekati mine
(diamonds) and Goldust's Croiner mine (gold).
He was also responsible for the acquisition of and initial exploration successes of the flagship properties of two other TSX issuers active in Peru, Norsemont Mining’s (TSX.V:NOM) Constancia project and Vena Resources’ Las Princesas project.
Mr. DeMelt will oversee exploration and mine development on the Chorobol claim group.
The Company will commence a geophysics and sampling program immediately to identify drill targets designed to confirm the historical resource numbers in accordance with National Instrument 43-101. Drilling is expected to begin as early as July.
Investors should note that the company’s interest in the Parkman property in Ontario embodies additional upside and exposure to diamonds. A completely separate exploration team headed by former company president Timothy Beesley will be conducing a drill program this summer that seeks to expand on exploration successes realized in the past.
The Company has the option to earn up to a 60% working interest in 314 claim units in 23 easily accessible unpatented mining claims covering a total area of 5,024 hectares in Parkman, Wyse and McAuslan townships about 60 km north of North Bay, Ontario (the "Parkman Property"). Highly anomalous concentrations of kimberlite indicator minerals ("KIMs") were discovered in three creeks draining the Parkman Property, with over 6,600 KIMs identified in one 9.8 kg sample.
The Company followed-up this dramatic discovery by sampling till and alluvium in September 2002. Microprobe analysis of 352 pyrope garnet grains, 332 chromite grains, 96 ilmenite grains, 42 chrome diopsides, 25 eclogitic garnets and two olivine grains have been completed, and results are consistent with a diamondiferous kimberlitic source for many of the grains. The recent results indicated that concentrations of KIMs in modern alluvium from several creeks on the Parkman Property are highly anomalous and occur in 5 distinct locations. Of significance, in the Green Creek area, the coexistence of a heavy mineral suite consisting of magnetite, pyrite and spessartine, locally derived from Iron Formation, with the unusually abundant numbers of KIMs in alluvium and (to a lesser extent) fluvioglacial sand suggests that the KIMs have a local origin.
According to company management, the potential exists for the Parkman property to be spun out into a separate public entity, which would provide an immediate benefit to existing shareholders of Grenville as they would receive consideration in the form of share of the new company.
James West is president of Resourcex , a publishing group that tracks the progress and prospects of the most profitable sector of the entire resource industry: the junior mining market. Find out more by visiting http://www.resourcexinvestor.com
