A Toronto silver exploration company is sewing up ownership in a large property package of more than 16,000 hectares in the Temiskaming area that was once a historic mining camp.
Kuya Silver sees very high-grade silver potential, close to the surface, at the Silver Kings Project, located south of the town of Cobalt.
In a Jan. 4 news release, Kuya announced that it has amended a previous cash-and-share agreement, signed in February 2021, with Electra Battery Materials.
This new deal will boost Kuya’s ownership in the Silver Kings Project from 75 per cent to 100 per cent, thus dissolving a joint venture arrangement between the two companies.Once the deal is finalized at the end of January, Kuya will control 16,600 hectares south of the town of Cobalt.
The whole area was a prolific silver mining camp starting at the turn of the last century that sparked an exploration rush across the region and put Northern Ontario on the map as a globally prominent mining jurisdiction. The Silver Kings Project contains several past producing mines that operated mostly between 1905 and 1970 and is showing some very promising mineral prospects.
A mineral byproduct of silver mining in the Temiskaming area is cobalt, considered a much sought-after critical mineral used in the production of electric vehicle batteries.
Kuya has already met part of the agreement terms by delivering to Electra $1 million worth of Kuya common shares. Completing this deal requires Kuya to pay $1 million cash by month's end.
As part of the transaction, Electera receives a two per cent royalty on net smelter returns should any commercial mining production take place at Silver Kings.
Silver prices are riding an eight-month high, currently trading at US$24 per ounce mark.
This is second property transaction between the two companies in Temiskaming. In March 2021, Kuya reached a deal with Electra to acquire all of the claims in the nearby Kerr Project, which once produced a combined 77 million ounces of silver from various mines.
Electra, formerly known as First Cobalt Corp.,first arrived in the Temiskaming area in 2017 as a pure play cobalt exploration and development outfit. It’s since diverted its attention into refurbishing and expanding a local refinery into a battery metals industrial park, making precursor battery-grade material for the auto industry. Electra’s only remaining cobalt exploration properties are out in Idaho.
When Electra was drilling in 2017 and 2018, it reported several “bonanza-grade” silver hits while exploring for cobalt.
In the two years since Kuya appeared on the scene, it’s done very little with the Kerr Project. In this latest news release, the company gave no indication of any upcoming exploration plans with the soon-to-be consolidated property.
Kuya’s attention is focused on Peru where it is developing its Bethania silver mine project.
“We believe the time is right to consolidate our interests in the Cobalt silver mining camp, which we believe has potential for high-grade near-surface silver that could become a second platform in our growth pipeline,” said company president David Stein in a statement.
“Given what is known about the geology and production history, in any future production scenario, cobalt, a strategic critical metal with significant value, is likely to be produced as a co-product or by-product.”