Tiny Aston Bay Holdings (BAY-V), a junior with a copper-zinc project in Nunavut, seized the market’s attention today by announcing a preliminary joint-venture deal with the world’s largest mining company.
According to the exclusive letter of intent, BHP Billiton would pay a minimum of $40 million in exploration expenditures over 9 years – including $2.5 million within 2 years of signing a final deal – to earn a 75% interest in Aston Bay’s Storm copper-zinc property.
There is no definitive agreement as of yet – Aston Bay and BHP are negotiating terms and targeting completion in the second quarter of 2016. Aston Bay will have no required exploration expenses for four years from the date of the definitive agreement.
Storm is a 345,000 acre property on the northwest corner of Somerset Island, Nunavut. The project includes Seal, a zinc-silver zone on tidewater, and Storm, a zone of carbonate-hosted copper mineralization 20 kilometres inland.
The property has been explored intermittently since the 1960s, with much of the work being done by Teck. Historic drill results include:
- 110 metres (m) core length grading 2.45% copper (Cu) from surface at the 2750N Zone
- 56m core length grading 3.07% Cu from 12.2m depth at the 2750N Zone
- 49m core length grading 1.79% Cu, starting at surface at the 2200N Zone.
The preliminary agreement with BHP comes after Aston Bay secured control of Storm from Commander Resources, a Vancouver, B.C. based firm that came away with an 25% stake in Cox’s exploreco.
Aston Bay had signed an initial option agreement with Commander in November 2011.
Aston Bay shares were up 5 cents, about 26%, to 24 cents in early trading.
The properties have good access to shipping lanes and the landscape has favourable conditions for a road and protected deep-water port, according to the company.
Cox said the journey to the agreement announced today started several years ago when he was in Commander offices. He noticed a striking turquoise boulder and asked where it had come from, starting him on the path to today’s announcement.
Cox previously worked as a metals and mining analyst at the D.E. Shaw Group, a New York-based hedge fund, managing a team of 5. But he’s largely an outsider on Howe Street and in junior mining circles.
Aston Bay’s corporate headquarters are in Vancouver, but it’s the Washington one.
When Cox travels, he stays at Airbnb, and he favours hole-in-the-wall sushi joints over fine cuisine. G&A, not so much: his wife Iris handles the legal issues.
“Doing real deals takes time, work, and keep legal,” Cox said at CEO Chat, the investment app created by Vancouver entrepreneur Tommy Humphreys where Cox is a regular. “The Storm property is a tier-one exploration asset.”
Accolades poured in at the chat community.
“Just out of meetings and damn, Ben, you knocked it out of the park – congratulations on a great deal,” commented @TheGalvanizer.
“You rock, @BenjaminCox. Fantastic,” commented @Tim_Oliver.
“Wow, impressive in this environment. Congrats!” said @Daniel.
If Cox and his Aston Bay Holdings have been under the radar north of the border, they likely won’t be anymore.
For BHP Billiton, it marks a re-entry of sorts into Canada 3 years after it pulled the plug on Canadian diamonds by selling its 80% interest in Ekati, Canada’s first diamond mine, to Dominion Diamond.
BHP retains the feasibility-stage Jansen potash project in Saskatchewan.
Aston Bay Holdings
Shares outstanding: 39 million (50M when Commander deal closes)
Market cap: $8.6 million
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