Less than two weeks after being appointed executive chairman and CEO of Sandy Lake Gold (TSXV: SLAU), Patrick Sheridan has steered the Red Lake-focused junior towards several strategic acquisitions in Guyana.
Sheridan has been credited with the discovery, financing and development of the Aurora gold mine in a remote part of Guyana's rain forest, about 170 km southwest of the capital of Georgetown. Guyana Goldfields (TSX: GUY) put the mine into commercial production in January 2016.
Sandy Lake Gold recently signed a non-binding letter of intent (LOI) to acquire a 100% stake in a suite of exploration properties in the far southwest of Guyana's Cuyuni Basin, which hosts the Aurora mine and numerous artisanal mine workings. The properties under the LOI include the historic Aremu mine and the Peters mine concessions, two of Guyana's four historic producing mines.
Sheridan, who was terminated as Guyana Goldfields' executive chairman at the end of July and resigned his seat on the board at the end of October, declined to comment on Sandy Lake Gold's letter of intent in Guyana until after the company receives permission from the TSX Venture Exchange and shareholders for the Aremu transaction.
In a press release on Nov. 22, Sheridan said the acquisition of "historic and advanced stage properties immediately launches Sandy Lake Gold into the forefront of mineral exploration in Guyana," and notes that Aremu and the Peters mine "share similar geological settings and history as the Omai mine (3.7 million ounces produced) and the Aurora gold mine."
Both properties "offer an outstanding opportunity for the discovery and development of high-grade vein type, as well as open-pittable disseminated gold deposits," Sheridan continues. "As we advance our district scale Sandy Lake gold project, located in northwestern Ontario, we will continue to aggressively seek additional properties of merit. We are delighted to have this opportunity to build a highly focused and successful exploration company."
The company also said that it would continue to assess "other properties of merit in the Cuyuni Basin with the intention of making additional acquisitions."
The Aremu mine produced 6,488 ounces of gold from 14,632 tons of mineralized material at an average head grade of 0.44 ounce gold per ton between 1906 and 1911. Previous owners sunk a vertical shaft to 170 feet (52 metres) and there had been 1200 feet (366 metres) of horizontal drifting at the -82 foot (25 metre) and -160 foot (49 metre) levels.
The mine consists of veins and workings including the Aremu Quartz Reef, Power House, Scotland and the Donicker veins - all of which are situated along a 16,000-foot (4,877 metre) east-west trend.
The Peters Mine produced over 40,000 ounces of gold between 1905 and 1909, with mill head grades exceeding over one ounce per ton. The mine was developed to 91 metres below surface, with the majority of production above 61 metres and, according to Sandy Lake Gold, was "the most developed and highest grade deposit in Guyana" before the Omai mine was built in 1993.
The Geological Survey of Guyana completed geological mapping, sampling and diamond drilling at the Peters mine in the mid-1960s. The work was sponsored and funded by the United States Geological Survey and the United Nations.
Guyana Goldfields acquired the project in the late 1990s and did limited drilling as operator and optioned the property to WSR Gold Inc. The work focused on the area around the main shaft and returned historic (not compliant with NI 43-101) assays including 6.10 metres of 32.70 grams gold per tonne from 122 metres downhole in hole MS-01; 5.20 metres of 13.87 grams gold from 125 metres in hole MS-07; 52.60 metres of 5.70 grams gold from 107 metres in MS-08; and 7.11 grams gold over 40 metres from 11 metres in MS-18.
Under the terms of the letter of intent, Sandy Lake would likely purchase a 100% interest in the various properties by issuing to the vendors 100 million common shares of the company.
Sheridan has a significant interest in the vendors of the Guyanese properties, which total about 25,888 acres (10,477 hectares).
The mining executive has worked in Guyana for more than 25 years and raised over $400 million for exploration and development projects in the country, Sandy Lake Gold states on its website.
Sheridan served as Guyana Goldfields' executive chairman from June 2013 to July 2018. The company eliminated the executive chair position on July 30 when Rene Marion was appointed non-executive chairman.
The company said the change was carried out to "streamline the organizational structure" under the leadership of Scott Caldwell, the company's president and CEO.
In Canada, Sandy Lake Gold controls about 104,000 acres (42,087 hectares) of contiguous mineral claim holdings about 225 km north of Red Lake.
A limited drill program there in 2014 returned intercepts of 12.86 grams gold over 6.85 metres and 12.17 grams gold over 6.2 metres.
The company has also completed a VTEM airborne and ground geophysics surveys over target areas, and in February 2018 signed a 5,000-metre drill contract and mobilized equipment for the project. Sandy Lake Gold is negotiating an exploration agreement with the First Nation communities.
Over the last year, Sandy Lake Gold has traded within a 52-week range of 4 ? and 12.5 ?. At press time in Toronto it was trading at 8.5 ? per share.
The junior has about 104 million shares for a market cap of about $8.86 million.