The Fyre Lake Project, located in southeast Yukon, is owned 100% by Pacific Ridge Fyre Lake hosts a "Besshi-type" copper-cobalt-gold volcanogenic massive sulphide mineralization. Exploration to date has partially drill defined the Kona massive sulphide deposit and outlined two satellite targets with potential for additional VMS deposits. A preliminary resource estimate for the Kona deposit has been completed, along with recommended work plans for continued exploration.
On January 18, 2017, the Company closed an option agreement with BMC Minerals (No. 1) Ltd. ("BMC") whereby BMC has the right to acquire a 100% interest in Fyre Lake. BMC has been granted two options whereby it will make payments of $2,200,000 in the case of a one-year purchase option or in two-years by paying $300,000 in January 2018 and $2,420,000 two years after closing. In addition, if it exercises the option, BMC has agreed to make a bonus payment of $1,000,000 if and when BMC’s Kudz Ze Kayah property has reached commercial production for one year. BMC paid a non-refundable deposit and initial option payment of $375,000 ($25,000 in November 2016 and $350,000 in January 2017).
In December 2018 the Company announced that the payement schedule had been re-negotiated. The final $2.42 million payment, due on the second anniversary of the closing of the original agreement (January 16, 2019), will now be made in two tranches, with $1.2 million paid in December 2018 and the remaining $1.22 million due upon BMC obtaining production financing for its Kudz Ze Kayah project, but in any event no later than December 31, 2020. BMC will also pay $75,000 to Pacific Ridge every six months, commencing June 30, 2019, until the final tranche has been paid. All other terms and conditions of the agreement remain the same, including the bonus payment of $1,000,000 that is due if and when BMC’s Kudz Ze Kayah property has reached commercial production for one year.
The Fyre Lake copper-cobalt-gold project is located in the Yukon's Finlayson Lake Camp, approximately 250 km east of Whitehorse in southeastern Yukon Territory.
The potential of the Finlayson Lake Camp was recognized in the mid-1990s with the discovery of the Kudz Ze Kayah volcanogenic massive sulphide (VMS) deposit (30 km north of Fyre Lake) and the discovery of the Wolverine VMS deposit (30 km northeast of Fyre Lake).
The Fyre Lake project covers over nine kilometres of favourable host rocks with geochemical-geophysical targets indicative of volcanogenic massive sulphide mineralization.
During 1996 and 1997, the company focused its attention to delineating one target, the Kona deposit, through completion of 23,200 metres of drilling in 115 holes, at a cost of $6 million.
The Kona Deposit consists of two parallel northwest trending zones of copper-cobalt-gold massive sulphide mineralization found in horizons with mineralized thicknesses varying from eight to 40 metres over a length of 1,500 metres and a width of 250 metres.
The results of a NI 43-101 compliant mineral resource study of the Kona Deposit was completed by Minorex Consulting Ltd. who estimated an indicated mineral resource of 3.571 million tonnes grading 1.57% copper, 0.10% cobalt and 0.61 grams gold per tonne at a 1 percent copper cut-off grade. An inferred mineral resource, at the same cut-off grade, is comprised of 5.361 million tonnes grading 1.48% copper, 0.08% cobalt and 0.53 grams gold per tonne. Low-grade zinc and silver assays were not included in this mineral resource estimate. This estimate was prepared by D. Blanchflower, P.Eng. of Minorex Consulting Ltd. who is the qualified person for this purpose. The resource remains open for expansion.
Preliminary metallurgical test work results indicate that target recoveries of 90% for copper and 70% for gold, into a concentrate representing 7.5% of the feed and assaying 21% to 23% copper, 10g gold/tonne and 0.08% cobalt, should be achieved from a mill feed grade of approximately 2% copper and 1.2g gold/tonne (Melis Engineering, 1997).
Subsequent scoping leach tests on cobalt-bearing pyrite concentrate indicated a 70% cobalt recovery in flotation and 95% recovery from pressure leaching with an overall cobalt recovery of possibly 65 to 70%. No cobalt minerals were identified during the microscopic examination of two samples but pyrite was identified as the main cobalt carrier. No visible gold has been observed but does occur in association with pyrite and chalcopyrite grains.
With copper and gold grades increasing to depth, the Kona deposit remains open for expansion. The deepest holes drilled to date intersected massive sulphides grading 5.55% copper, 0.14 grams gold and 0.22% cobalt over 3.0 metres and 3.23% copper, 0.14 grams gold and 0.23% cobalt over 5.7 metres and 6.07% copper, 0.05 grams gold and 0.68% cobalt over 7.0 metres.
Significant exploration potential remains. The ultimate size of the Kona massive sulphide deposit has not been determined. A four-kilometre-long magnetic anomaly located northeast of Kona and a three-kilometre-long magnetic anomaly lying west of Kona are larger and more intense compared to the magnetic feature reflecting the Kona mineralization. These electromagnetic anomalies represent priority drill targets for discovery of additional massive sulphide deposits.