Mystery
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Shortform Presentation - May 2023 Introduction
Silver Spruce Resources, Inc. signed a Definitive Agreement with the Vendor to acquire 100% of three early-stage gold exploration properties, Mystery, Till and Marilyn, (the “Property” or the “Properties”) located near Grand Falls, Newfoundland, Canada, 20-25 kilometres west of New Found Gold Corp.’s Queensway project and 15-35 kilometres south of Sokoman Minerals Corp.’s Moosehead gold project.
Silver Spruce expedited its initial site visit on the Properties during the week of August 23rd and received an independent positive initial report on the mineral and rock textures potentially related to shallow epithermal and/or orogenic vein-style mineralization. This is a timely opportunity to acquire these Properties given their strategic location in a very active exploration camp, displaying prospective geology with only limited exploration and no history of drilling, and proximal to regional and secondary structural features defined by the geophysical and geological coverage.
The 8,750-hectare project is located within the Exploits Subzone, an extensive area of mineral exploration activity and discoveries over the past two years (see Maps section). The Properties are well situated in exploration logistics, located close to each other and <10-25 kilometres southeast and south by road from Grand Falls, Newfoundland. The Properties are located <50 kilometres from the Gander International Airport and are easily accessible from major paved roads and local logging and bush roads and trails largely by vehicles and more remote areas by ATV.
The region is structurally complex and located, in large part, between two major crustal lineaments, the Grub Line and Valentine Lake Faults. Numerous major to lesser sub-parallel features merge and bifurcate along strike and are transected by NW and EW-trending faults. These deep-seated structures, which juxtapose geological terranes over hundreds of kilometres, are key to the location and formation of orogenic gold deposits containing several million ounces of gold as reported by many junior companies in the district. Though younger, the lineaments are very similar to those of the Abitibi Gold Belt in Ontario and Quebec in scale, splaying surface expression and wide distribution of mineral endowment, though in an earlier stage of overall exploration and development.
Terms of Agreement
Upon acceptance of the Definitive Agreement by the Toronto Stock Exchange (TSX), Silver Spruce agrees to pay the Vendor CAD$40,000 and 1,000,000 common shares as the first property payment and an additional CAD$575,000 and 9,000,000 shares on anniversary dates over the five-year life of the agreement.
In order to earn 100% interest in the Property, Silver Spruce agrees to provide CAD$1,500,000 in exploration expenses with a minimum of CAD$150,000 within 12 months of TSX approval.
Upon completion of the above terms in to earn a 100% interest in the Property, and the Title Transfer, the Vendors will reserve, retain and hold a 2% net smelter return royalty as described in the Royalty Agreement (the “Royalty”).
An advance payment against the Royalty payable by the Purchaser to the Vendors in the amount of $15,000 will be made on an annual basis starting on the 6th anniversary of the date of the Final Exchange Bulletin.
The Company shall be entitled, at any time in its sole discretion, upon written notice to the Vendors, to buy back 1% of the Royalty for $2,000,000, and shall have the right to buy back the remaining 1% of the Royalty from the Vendors at any time at a prevailing market price.
Geological History
The Properties have seen little structured exploration to date. Prospecting by the Vendor is the only exploration carried out during the past ten years. All baseline information is based upon regional geology, geophysics and imagery from the provincial government survey website, adjacent property exploration successes and related corporate filings
Silver Spruce contracted a Newfoundland-based professional geologist to visit the properties with one of the Vendors. They travelled to the Mystery and Marilyn properties (see Gallery and Map sections) respectively, examined the geology, verified sample locations for the historical assays and collected new rock samples, thirteen of which were submitted to ALS Global for analysis, and took photographs of pertinent topography, geomorphology, geological exposures, access and types of vegetation. The four claims on the Till property were not evaluated during the site visit. Additional rock samples and splits of assay samples were shipped by courier to the Company’s QP for forthcoming examination by optical microscopy. The results of the due diligence rock geochemistry for thirteen samples are expected from ALS Global in due course.
Multiple surface occurrences are reported of agate chalcedony to colloform and crystalline silica veining and multi-phase breccias (see Gallery section), carbonate replacement by quartz, and open-space filling quartz and calcite, all textures indicative of the upper zones of epithermal systems and epizonal to mesozonal structural conduits in orogenic systems, and are accompanied by Au and arsenopyrite, stibnite, chalcopyrite, bornite and Cu carbonate mineralization in several host lithologies including quartz, black shale and other sediments, ultramafics and gabbro.
A selection of historical assays reported for precious and base metals and pathfinder elements from 123 samples collected from Mystery and Marilyn are shown in the Reports section. Eighteen samples reported Au >0.5 g/t (max. 12.5 g/t Au). Cu values were reported up to 9.85% with minor Ag, Pb and Zn. Arsenic was highly anomalous with values for 36 samples over the 2200 ppm upper limit for Inductively Coupled Plasma (ICP-OES) analysis, strongly associated with elevated Au values and displayed generally as minor to abundant arsenopyrite.
Exploration Plan
The Company has preliminary plans to complete permitting, followed by further prospecting, geological mapping, soil and rock geochemistry, QA/QC program development, airborne geophysics, LiDAR and aerial photography and data compilation, and as warranted by the Phase 1 results, to undertake a detailed geological mapping and sampling program, soil grid sampling and planning for our first exploration drill campaign.
All aspects of the exploration program will be conducted with strict adherence to COVID-19 protocols for personal safety.Quality Control
Due diligence rock samples were collected, packaged and delivered by the Company’s contract professional geologist to a courier service for shipment to the ALS sample preparation facility in North Vancouver, British Columbia, Canada. ALS Global is a facility certified as ISO 9001:2008 and accredited to ISO/IEC 17025:2005 from the Standards Council of Canada.
Pulps (50gram split) were submitted for Au analysis by Fire Assay with Atomic Absorption finish (Au-AA24) and Four Acid Digestion with Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) multi-element analyses (ME-ICP61m).
Given the small size of the sample suite, no additional in-house quality control samples (blanks, standards, duplicates, preparation duplicates) were inserted into the sample set. ALS Global conducts its own internal QA/QC program of blanks, standards and duplicates, and the results are provided with the Company sample certificates. The results of the ALS control samples will be reviewed by the Company's QP and evaluated for acceptable tolerances. All sample and pulp rejects will be stored at ALS Global pending full review of the analytical data, and future selection of pulps for independent third-party check analyses, as requisite.
All metal values disclosed herein for the Mystery and Marilyn properties by past operators, including the Vendors, and by Silver Spruce are reported from grab samples which may not be representative of the metal grades, or the metal grade distribution, and those from previous exploration efforts must be considered as historical in nature. The Company has reviewed the historical certificates, where available, and conducted data verification sampling on the known areas of mineralization with a view to confirm the presence and tenor of metal values. The verification sample results are pending from ALS.
The Company believes that the analytical protocols and data will withstand scrutiny for inclusion. Sample grades reported by element in the technical documentation and analytical certificates range from detection limit (based on the specific instrumentation and by element) to anomalous values which represent and include select samples and are reported as ‘up to’ the maximum values and/or ranges presented. Average values may be reported for select suites of samples in which the sample frequency will be indicated and which only represent metal grades from those samples designated.
Qualified Person
Greg Davison, MSc, PGeo, VP Exploration and Silver Spruce Director, is the Company’s internal Qualified Person for the Mystery Project and is responsible for approval of the technical content within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), under TSX guidelines.
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September 29, 2021
