In early 2012 (amended in March 2013), BWR and Hage Corporate Services Inc. (“Hage”) entered into an agreement whereby BWR acquired from Hage, a 59.8% interest in 20 contiguous crown patent claims comprising 314.43 hectares, located in Cunningham Township, Porcupine Mining Division, Province of Ontario. Initial exploration work by BWR was planned and took place during the summer and fall of 2013. This work included the preparation of an initial NI 43-101 compliant report that was commissioned in early May 2013, the Company engaged MPH Consulting Limited (“MPH”) of Toronto, Ontario. A 1.5% Net Smelter Royalty is retained by Hage on the terms and conditions as outlined in a previous agreement of which 0.5% shall be reserved for Rally Energy Ltd. (“Rally”), the owner of the 35.3% of the Shunsby Property, in the event of a dilution of interest by Rally as anticipated to be provided for in an agreement to be settled in the future between BWR and Rally and, with respect to the remaining 1.0% Net Smelter Royalty, BWR shall have the right to buy 0.5% at the time of production for a net present value determination of the Net Smelter Royalty as provided for in a previous agreement and the other 0.5% shall remain with Hage.
MPH had completed work on the project in the early 1990’s and as such were the last independent consulting group to be involved in the exploration. The archived files were recovered and the pertinent data was entered into a new digital database that was included in the project description report. The preparation of this report required a site visit by the authors of the report that took place in early June 2013. On October 15, 2013, the Company announced that it received the National Instrument 43-101 report on its Shunsby Property. Over 200 historical diamond drill holes (1954 – 1992) have tested the project, partially outlining two zinc-copper prospects.
In early 2014, BWR started the planning of an initial diamond drilling program, designed to replicate earlier drilling by previous operators as needed for incorporating historical drill results into a current inferred resource estimate. In May, 2014, BWR completed a diamond - drilling program on the property. The initial diamond drilling program consisted of 750 meters, in 6 holes; drilling was completed over a two week period, commencing in late April and concluding in early May.
Massive sulphide mineralization was encountered in each of the six holes that were completed during the April-May diamond - drilling program, accentuated by hole BWR-14-03 that intersected 35.5 meters averaging 2.4% Zinc, including 6.2 meters that averaged 6.1% Zinc. Significant mineralized intercepts were received for each of the six holes, the highlights for which are as follows:
Historical drilling on the property consisted of 214 drill holes drilled between 1954 and 1993. The logging and visual observations of mineralized intercepts of the recent (2014) holes were reported to be fairly consistent with the results of historical drilling. The samples selected and assays received have verified that zinc and copper is present in potentially commercial grades on the Shunsby Property, however the tenure of mineralization and consistency of reproducible results (historic vs. current) is somewhat tenuous to confirm. Geological observations suggest a very long lived subaqueous volcanogenic event, with numerous episodes of explosive activity followed by periods of quiescence and accumulation of zinc, copper, lead and iron sulphide mineralization. This complex geology may partially account for the variances noted in the comparisons, so it is felt by management that the historical results can be used confidently as a guarded guide in locating and planning as needed to identify areas of reported mineralization, that may lead to areas of new mineralization.
The Company is currently reviewing the 2014 drill results along with the plethora of historical data as needed to plan its follow-up exploration program that may include: additional diamond drilling, surface trenching, property bedrock sampling, ground survey line establishment, and geophysical test surveys (gravity and/or IP surveying), along with locating historical drill collars for modeling purposes. As the claims are lease and patents, there is no annual assessment due to maintain the claims, however there is annual lease payments due each March of $1,258.
Counsel for Rally has advised that Rally has determined not to remit their share of the 2014 expenditures on the Shunsby property and that they understand by electing not to remit their share, their interest will undergo dilution accordingly. Management of BWR has applied an industry standard dilution formula to Rally’s shortfall and recalculate BWER’s respective interest as being 70.15%.