KGHM Ajax is drilling at neighbouring claims owned by a Vancouver junior resource company as it expands its exploration program.
Cicada Venture Ltd. confirmed yesterday it has a deal with KGHM Ajax that allows the company to drill on Cicada’s Iron Mask mineral claims.
Company director Sammy Cheng said the two sides are working on a deal after an earlier agreement was not finalized.
In January 2014, Cicada announced it had agreed in principle to sell its rights to the Iron Mask property for $1 million in return for a 20 per cent share of profits should it be put into production.
“We’re still negotiating,” Cheng said.
“I think they want to see what’s there before they buy.”
KGHM did not return messages yesterday seeking comment.
However, a company spokesman said last year it was acquiring the claims only to advance Ajax works or infrastructure.
An industry source familiar with the area, but not authorized to speak on the company’s plans, said KGHM Ajax may be interested in Cicada’s property for purposes that include condemnation drilling — exploration to confirm there is no ore beneath a proposed building or rock dump, for example — to expanding its probable reserves to neighbouring properties.
Cicada’s Iron Mask claims are immediately east of KGHM’s proposed open-pit copper-gold mine on the city’s southern boundary.
KGHM Ajax has budgeted $58 million in capital expenditures in 2015 that will include continued drilling.
Earlier this week, KGHM Ajax’s Chris Wild told a Kamloops Exploration Group conference its exploration program includes what he called a “northeast extension” from the historic pit.
“We’re looking at a significant addition to the resource base,” he said.
The company intends to file its application to the federal and provincial governments this summer. Based on acceptance, it forecasts starting construction in 2016 and operation in 2019, Wild told the conference.
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