Cloudbreak Discovery Plc (LSE: CDL), a natural resource project generator, has signed an option agreement on the Rizz project in British Columbia with local company 1311516 BC Ltd. (BBCo).
Rizz is part of a broader exploration programme in Northwestern British Columbia that was launched late last year and includes five polymetallic projects. The Rizz deposit includes gold, silver, lead and zinc and is located approximately 90 kilometres south of Atlin in British Columbia.
There has been a good initial investor response to the news, with shares in Cloudbreak Discovery rising 6.88% in London to trade at 8.55 pence. Since the start of the year, the company’s shares have gained a whopping 382.8% in value as investors became more aware of the firm’s portfolio of mining projects, including polymetallic projects such as Rizz and several other projects including copper and helium. Focus recently has been on its partnership with Alianza Minerals Ltd [TSX-V:ANZ], to identify and advance copper projects in the SW USA announced earlier in February.
Rizz assay results show good mineralisation of gold, silver, lead and zincThe Rizz project covers 5,415 hectares of mineral titles in northwestern British Columbia. It sits in the Boundary Ranges Metamorphic Suite and Sloko Group plutonic and volcanic rocks west of the Llewellyn fault.
“Mineralisation is documented in the Sloko-Hyder plutonic suite with several zones identified for immediate follow up. The known mineralisation includes sulphide-rich felsite boulders and talus in one of the cirques on the property,” the company said. Assay results from historic samples of this mineralisation include up to 27.6 grams per tonne of gold, 562.9 g/t silver, 8.25% lead and 15.9% zinc. Follow-up work will include exploring the source of this strongly mineralised float material.
The company noted that several surface showings have been observed within the same geologic setting and structural corridor as the New Polaris and Tulsequah Chief projects, targeting polymetallic mineralisation.
As part of the new option agreement, Cloudbreak Discovery’s partner BBCo will spend an aggregate of CAD750,000 over three years to explore the property, gaining a 75% interest in the project. At least CAD50,000 will be paid within the first year. The partner company will also issue 3,000,000 common shares to Cloudbreak Discovery and make a total of CAD120,000 in cash payments. Of that, CAD25,000 will be paid on the effective date and followed up by another CAD25,000 payment either on the signing of a going public transaction or two months from the effective date.
Listen: Podcast with Kyler Hardy, CEO of Cloudbreak Discovery
Joint Venture plans
Cloudbreak Discovery and BBCo also plan to form a joint venture once the option agreement terms have been completed. As part of the JV, each of the companies will be responsible for its pro-rata share of expenditures on the Rizz project. If one of the two firms decides not to cover those expenses, its share will be proportionally diluted down. If the stake is eventually diluted to under a 10% ownership interest in the project, the remaining interest will automatically convert to a 2% net smelter royalty.
Cloudbreak DIscovery’s business model is to pursue a low cost, high-value creation that draws on partner balance sheets and technical teams to move the ball forward on the various projects. It sources development partners from its well-established network of explorers and developers in the mining space and receives cash and equity in the form of milestone payments.