Cashed-up Sterling Metals focused on Ontario’s Copper Road – Richard Mills

2024.07.04

The Copper Road project formerly owned by Copper Road Resources (TSXV:CRD) has been bought by Sterling Metals Corp. (TSXV:SAG, OTCQB:SAGGF). Sterling is currently conducting an exploration program with the goal of building tonnage.

Recent porphyry and breccia drill holes plus past copper production from two mines might suggest the potential for more, and possibly larger, intrusion-related copper mineralization.

The brownfield copper-moly-silver-gold project north of Sault Ste. Marie, Ontario spans 24,000 hectares. It had been previously explored but never consolidated until Copper Road Resources did so in 2021.

In May of this year, Sterling Metals completed the acquisition through the purchase of a Copper Road subsidiary.

Transaction

Copper Road approved the transaction at a meeting of shareholders on April 30; just over 90% of SAG shareholders voted in favor.

Sterling said on May 10 that it issued 108.087 million SAG shares, of which 86,249,546 shares will be distributed on a pro rata basis to the shareholders of Copper Road Resources, as of May 8. Sterling also paid $460,000 in cash.

“We are excited to complete the acquisition of Copper Road, adding a complementary and compelling project to our growing Canadian exploration portfolio,” Sterling Metals’ CEO Mathew Wilson stated. “The timing of Transaction represents a significant opportunity for existing and new shareholders of Sterling, as we enter a new copper super-cycle, largely the product of years of underinvestment and lack of discoveries. As we look ahead, we are excited to begin our Phase I exploration program in the coming weeks. Our exploration team has been diligently gathering historical and current data and we look forward to providing plans with the aim of making important discoveries in eastern Canada.”

Full disclosure: Copper Road Resources is a former Ahead of the Herd client. We liked the project then and we like it even more now, with a new management team, a company with deeper pockets, with demonstrated access to capital and potential discovery upside in a prolific copper-producing region, the Mid Continental Rift.

The transaction is also good deal for Copper Road shareholders. They get shares of Sterling Metals, a company that has committed to exploring their former Copper Road Project this year, with a plan to drill by the fall. Sterling has $3.3 million in the bank as of March 1st and a new approach to the project, as explained below.

Sterling Metals Corp.

The company was founded in 2020 with a focus on silver, but began pushing towards copper in no small part due to the management team that has been assembled. Along with Wilson, a veteran junior resource company executive and the former VP of Pinetree Capital, the team includes Senior VP Exploration and Evaluation Jeremy Niemi, a geoscientist whose leadership contributed to the 10x resource expansion of the Eagle’s Nest nickel-copper-PGE deposit in Ontario’s Ring of Fire.

Dr. Neil O’Brien, an advisor to Sterling Metals, has international experience on six continents in all stages of mineral exploration and development of economic mineral resource projects, mining project evaluation and strategic corporate development activities. He retired in 2018 from Lundin Mining as Senior Vice President, Exploration and New Business Development.

In a conversation with Ahead of the Herd, CEO Mat Wilson explained how the acquisition of Copper Road came about.

“I’ve always really liked the geology of this project, it’s really interesting. There’s copper everywhere,” he said Tuesday.

“The idea that I pitched to the Copper Road board was, ‘look I have this great copper team, we have a history of raising money, and we have money to do the work that needs to be done. It’s a great project and I think that the two would be a really great fit together’. That’s how this all came to be.”

Sterling completed an upsized brokered private placement financing in April 2023 — issuing 6,700,000 charity flow-through units @ CAD$0.225 per unit, for total gross proceeds of $6.476 million.

The company has three projects in its portfolio but sees the most short term opportunity in Copper Road — hence the current focus.

The Adeline project in central Labrador is prospective for sediment-hosted high-grade copper and silver mineralization with 44 km of strike length. A robust early-stage exploration database includes mag/IP/resistivity and over 250 copper samples assaying as high as 26.9% Cu. However, the project is remote. The Trans-Labrador highway is around 112 km away, a hydro access road is 61 km. The 5,428 MW Churchill Falls power station is 180 km from the project.

The Sail Pond project is located on Newfoundland’s Great Northern Peninsula. High-grade, silver, copper, lead and zinc are associated with quartz-carbonate veining. Sail Pond was first discovered in 2016, with about $7.6 million spent to date.

Copper Road Project

Behind Ontario’s mineral wealth is the geological advantage offered by the Mid-Continental Rift, which curves for more than 2,000 km across North America and is one of the world’s great continental rifts. Also called the “Keweenawan Rift”, it stretches across Lake Superior near Marathon, ON, all the way across Minnesota, Michigan, Wisconsin, Iowa, Nebraska and Kansas.

The Mid-Continental Rift is the same structure that formed Lake Superior and the world-class Keweenawan peninsula copper-mining region in the US, which housed the initial copper rush in the mid-1800s and was mined for more than 150 years.

Because of fragmented claims ownership there were few copper developments on the Ontario side of the Keweenaw, which provided an opportunity for Copper Road Resources.

The assemblage included the former Coppercorp mine and the Jogran porphyry. The claim holders were trying to get a deal done on the East breccia target and the Tribag mine, which Copper Road Resources managed to do in March 2021.

The property package has a proven history of copper production containing two former mines: Tribag historically processed 1 million tonnes at 1% Cu, and Coppercorp had historical production of 1Mt at 1.16% Cu.

There are several confirmed zones of mineralization within property boundaries — Tribag, Glenrock, JR (Richards/Jogran) and Coppercorp — each hosting multiple targets for exploration. Together, they span 30 kilometers of contiguous claims.

Two zones of near-surface mineralization, Tribag and JR, are approximately 12 km apart.

The former Tribag mine represents a porphyry-style copper deposit, consisting of four breccias (Breton, West, East, South). Its reported historical production (1967-74) was predominantly from the Breton breccia.

Historical estimates (historical estimates are not 43-101 compliant and are not to be relied upon for investment purposes) by Teck Resources, its former operator (1966-72) identified 40 million tonnes at 0.4% copper from the Breton breccia, and an estimated 125 million tonnes at 0.13% copper and 0.05% molybdenum from the East breccia.

The JR Zone consists of the Richards breccia, a near-surface copper target, and the Jogran surface porphyry. The two targets are 900m apart.

In 2022, Copper Road completed 3,000m of drilling at the Tribag Zone, with all eight holes returning significant intervals of near-surface mineralization (i.e., 9m at 1.47% copper equivalent), proving the continuity, depth, and additional mineralization outside of historical models at the Breton breccia.

In 2023, Copper Road completed a drill campaign totaling 1,224 meters in seven holes, hits which had 50m-1% sort of stuff, as well as 100m of 0.5% CuEq. The drilling was the first step in proving the JR Zone as a large-scale zone of economic copper mineralization at shallow depths.

At the Jogran porphyry target, two holes intersected broad zones of copper mineralization — 194 meters and 137 meters, respectively. At the Richards breccia target, two of four holes encountered wide intersections of copper mineralization of 37 meters and 49 meters, respectively. The drilling successfully extended the breccia 50-60m vertically below known mineralization.

2024 exploration

Sterling Metals is taking a different approach to Copper Road than previous operators. Rather than drilling old targets, Sterling has decided to be more scientific about it.

One of the first things the company did upon acquiring the property was to run some geophysics.

“We did a very tightly spaced, very high-detailed mag, Lidar and radiometric survey,” said Wilson.  

“We’re doing this work to try and locate the better and bigger targets to give some context to what the drill holes have been to date,” he explained.

“What I want to do is look for larger target areas. We want to see where the big geology plays out, so that we can find areas that are a million tonnes or maybe 5-10 million tonnes if not even more than that.”

Once these targets are identified, the goal is to start drilling in the fall.

Quite a bit of exploration work has been completed or is currently under way. A June 26 news release highlights the 3,777-line-kilometer magnetic, radiometric and Lidar survey, finished ahead of schedule in May and June; testing to define geophysical signatures of targets; and the start of a minimum 5,000 surface-sample program.

Advanced modeling of historical geophysical data, to extract important new layers of data for targeting, and to map the plumbing of the mineralization, is expected to be completed in July.

“As we review core samples from historical holes and explore previous mine sites, the immense geological opportunity at Copper Road becomes clear,” said SVP Exploration and Evaluation Jeremy Niemi. “Consolidating this vast land package, leveraging historical data, and integrating it with modern geophysics and surface mapping is an exploration geologist’s dream. We are quickly advancing our understanding of the porphyry and breccia systems and look forward to uncovering the riches this project has to offer. We look forward to launching an exciting drilling program in the near future.”

Conclusion

The Copper Road project has always been impressive for its high-grade copper intersections but up to now the areas of interest have been small, and claim ownership fractured. To advance the project, it needed to be consolidated, which Copper Road Resources succeeded in doing. The 24,000-hectare land package is huge. The next step is to build scale, or tonnage, and Sterling Metals has a plan to try and do that. Before drilling, the company is conducting detailed geophysical and geochemical studies. It will then build a model to hone in on the best and largest targets. This is a new approach to the Copper Road property.

Copper Road has a lot of “smoke” but so far no “fire”, i.e., the structures underneath driving the mineralization. Wilson agrees. He thinks that “everyone is waiting for that. They’re like ‘okay, is there a story here?’ About when you drill the next hole, you’re drilling into something bigger that matters.”

Copper Road is the kind of story that we at AOTH love to tell. Here we have a new management team studying the property and preparing it for drilling a bit differently than past operators.

Whether it works remains to be seen, but Sterling Metals has the treasury to pull it off. It has $3.3 million in the bank and a first-class management and technical team that is pushing the project forward.

Sterling Metals Corp.
TSXV:SAG, OTCQB:SAGGF
Cdn$0.06, 2024.07.03
Shares Outstanding 224.1m
Market cap Cdn$13.2m
SAG website  

Richard (Rick) Mills
aheadoftheherd.com
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Richard does not own shares of Sterling Metals Corp. (TSXV:SAG). SAG is not a paid advertiser on his site aheadoftheherd.com
This article is issued on behalf of SAG