Birch Lake, Ontario
Pelangio owns a 100% interest in the Birch Lake property, which comprises 28 contiguous unpatented mining claims (1,120 acres) located in the Keigat Lake area, approximately 120 kilometres northeast of Red Lake, Ontario.
The property is subject to an underlying agreement whereby Goldcorp retains a 2% NSR royalty on all of the claims. There are currently no obligations to Goldcorp other than payment of the royalty on production.
Previous work by Placer Dome delineated a gold-bearing system (High Grade Island) over a strike length of approximately 300 metres to a vertical extent of 150 metres. From 1986 to 1996, Placer Dome completed 110 drill holes totaling 19,918 metres, together with mapping, trenching, geochemical and ground geophysical surveys.
Prior to September 30, 2008, the property was subject to an option agreement between Pelangio and Trade Winds Ventures Inc., which spent approximately $1.2 million on the property during the term of the option. Trade Winds completed its most recent drilling activities on High Grade Island during winter 2005. The previous 2004 drilling program consisted of four holes, TWBL-094/095/096/097, totaling 1,102.60 metres, testing the continuity and down-dip extension of the central gold zone located on High Grade Island. Trade Winds reported multiple occurrences of visible and coarse gold, with the best assay results reported from the program being: 115.89 g/t gold over 2.75 metres (est. true width 1.86 metres) from 239.35 to 242.10 metres (TWBL-096); and 21.22 g/t gold over 2.35 metres (est. true width 1.51 metres) and 229.96 g/t gold over 2.45 metres (est. true width 1.58 metres) between 300 and 360 metres (TWBL-097).
Trade Winds 2005 drilling program consisted of three holes, TWBL-098/099/100. Coarse and visible gold was reported in holes TWBL-098 and -100, with the best results from those holes being: 14.7 g/t gold over 1.2 metres contained within a broader zone of mineralization of 4.8 g/t gold over 4.4 metres (TWBL-098); and 11.8 g/t gold over 0.5 metres and 19.7 g/t gold over 1.0 metre (TWBL-100).
Outlook for the Birch Lake Property
In March 2017, the Company entered into an option agreement with Pacton Gold Inc. ("Pacton") whereby Pacton may acquire a 100% interest in Pelangio's Birch Lake Property, located in Ontario's Red Lake Mining District. Pacton has a right to earn a 100% interest in the Birch Lake Project by paying a total of CDN $375,000 and issuing an aggregate of 4,500,000 common shares over a four year period to Pelangio. Pacton must also incur exploration expenditures of CDN $1,300,000 over a four year period.
On April 12, 2018, the option agreement with Pacton terminated on Birch Lake Property without earning any interest in the property. Pacton made the first-year option payment of $75,000 and issued 900,000 common shares to Pelangio and without completing any exploration expenditures. Pelangio retains its 100% interest in this property.
Pelangio has since acquired a 1.5% net smelter royalty ("NSR Royalty") in 10 claims (1856 hectares) adjoining its 100% owned Birch Lake property in an agreement with 2522962 Ontario Inc. ("5SD"). Please see news release dated April 10, 2018 for more in depth details.
Pelangio has also entered into an option agreement with 5SD to acquire a 100% interest in the Keigat Lake Area Claims (the same group of claims subject to the NSR discussed above) located in the Red Lake Mining Division, Ontario. This block of claims surrounds Pelangio's Birch Lake Property.