Sanatana has an option to acquire up to 51% of the Watershed property, a prospective gold exploration property located between Sudbury and Timmins, Ontario. Sanatana has completed 16,630m of diamond drilling since October 2011 including a 4,996m infill drill program recently completed on the Clam Lake mineral claim. By expending $5 million on exploration and fulfilling the other requirements under the option and joint venture agreement, Sanatana has earned a 50% interest in the Watershed property. Initial exploration results were very encouraging and the infill drilling was aimed at obtaining a better understanding of previously identified gold mineralization, which is the primary element of the 2013 exploration plan.
The Watershed property consists of 46 mining claims covering approximately 7,691 hectares and a right of first refusal over a further nine claims. The Watershed property is located midway between Sudbury and Timmins, Ontario. Major known prospects on the property include the Schist Lake area located in the Yeo township and the Chester Gold area located in the Chester township. Sanatana believes that this area is prospective based on its review of historical data and the local geology. Other companies have found evidence of gold mineralization in the area.
The geology of the Watershed property is typical of the Swayze Greenstone Belt comprising a structurally complex mafic to felsic metavolcano-sedimentary supracrustal sequence of rocks intruded in places by diorite to granodiorite rocks of the Chester Granitoid Complex. There are ten historical high-grade gold mineralized showings highlighting the gold-bearing tenor of the property. The discovery of the Côté Gold Deposit by Augen Gold Corp., as it then was(now owned by IAMGOLD), has highlighted the potential for low-grade disseminated gold mineralization within brecciated zones of the Chester granodiorite.
Access to the property is via paved highway from Sudbury and Timmins, Ontario. A network of dirt roads crosses the property. The infrastructure in the area of the Watershed property, including access to power, water, accommodation and other services, is excellent.
Exploration Program Summary
- 3-D geological database compilation - All previous exploration company data and publicly available mapping, geophysics and sampling were entered into a 3-D GoCad spatial database.
- Regional mapping and prospecting - Property area orientation field work, ground truthing of historical gold showings and prospecting of new areas of interest.
- 1,045-line km airborne ZTEM survey.
- Regional airborne magnetics and EM structural interpretation - Based on previously acquired airborne magnetics and the newly acquired ZTEM delineating structural patterns amenable to gold mineralization.
- Property-wide soil geochemical sampling in early summer.
- 25-line km "Earth Probe" IP survey over areas immediately along strike from the adjacent IAMGOLD Côté Gold Deposit.
- Outcrop stripping and channel sampling - 1 acre (0.4 Ha) of new bedrock exposed at Clam Lake, Chester showing and Chain of Lakes to the west over areas of interest arising from the IP data.
- Ground magnetic surveys over the drill target areas.
- 16,630m diamond drilling over three programs - 27 drill holes targeting Clam Lake area, 16 drill holes around Chain of Lakes and one drill hole at Chester targeting IP anomalies and coincident gold in channel sampling.
Highlights of Drill Sample Assay Results
|Au Cut 0.3 g/t|
Summary of the Option and Joint Venture Agreement
In February 2011, Sanatana entered into an option and joint venture agreement with Augen Gold Corp., which was subsequently acquired by Trelawney Mining and Exploration Inc. and renamed Trelawney Augen Acquisition Corp. ("TAAC"). In June 2012, IAMGOLD Corporation acquired Trelawney with the result that TAAC is now a wholly owned subsidiary of IAMGOLD. In accordance with the option and joint venture agreement, all mineral claims comprising the Watershed property are registered in Sanatana's name.
In November 2012, Sanatana earned a 50% undivided interest in the Watershed property (the "50% interest") having paid $150,000 in cash, issued 5,000,000 common shares and incurred exploration expenditures of $5,000,000. Sanatana has continued exploration of the Watershed Property and, to March 31, 2013, has incurred a further approximately $3,000,000 in exploration expenditures, including a permitted administrative mark-up, that will be credited to Sanatana's contribution to the first work program after formation of a joint venture.
Sanatana has a right to earn a further 1% interest in the Watershed property for a total undivided interest of 51% by preparing and delivering to TAAC (at Sanatana's cost) a pre-feasibility on or before March 23, 2016. The parties will enter into a joint venture agreement for the Watershed property in accordance with the terms of the option and joint venture agreement on the earlier of the date that (i) Sanatana vests the 50% Interest but elects by notice to TAAC not to proceed to earn the 51% Interest; and (ii) Sanatana earns the 51% Interest.
The option and joint venture agreement includes a provision that while the Sanatana and TAAC are parties to an option or joint venture, with respect to the Watershed property or the ROFR Claims, TAAC has the option to purchase up to 10% of any securities issued in any equity offerings by Sanatana on the same terms and conditions of such offering.
See Sanatana's news release of April 29, 2013 for a complete summary of the option and joint venture agreement. The news release is available on this website under "News Releases" or under Sanatana's SEDAR profile at www.sedar.com