Canadian mining company, Northern Lion Gold Corp. has entered into co-operation with firm, Centerra Gold Inc. to further explore ‘massive sulphide’ deposits in western and central-eastern Cyprus which may indicate the presence of gold. Initial drilling is scheduled to start this summer.
The Vancouver-based mineral exploration company has entered into a Letter of Intent on activities in Cyprus with a subsidiary of Centerra Gold Inc, a global North American-based gold producer listed on the Toronto Stock Exchange.
Northern Lion Gold Corp. announced developments in its Cyprus endeavours at the end of last month and presented details at the 81st annual International Convention of the Prospectors and Developers Association of Canada (PDAC) being held in Toronto this week.
"This transaction with a leading gold producer provides validation of the geology and geography of the region. Cyprus has a long history of mining with very little exploration work completed over the last forty years. This strategic alliance will contribute to the development of a systematic exploration programme to discover additional buried massive sulphide bodies," Northern Lion President and CEO, John Lando said.
Speaking to The Cyprus Weekly at the Toronto convention, Northern Lion head of corporate development, Don Flahiff, said that more details about the agreement would be known later this month.
“At this stage, it is impossible to confirm the amount of money Centerra is fronting for the exploration as we are operating under a Letter of Intent. We will issue a further announcement about this soon,” Flahiff said. “But we expect to have secured what is known as a ‘minimum spend’ for one year from Centerra. This means thay exploration will be secured for 12 months.” This period would be a critical part of drilling with Northern Lion and Centerra knowing within that time what the prospects for gold mining would be in Cyprus.
“We would know whether to drill it or kill it as we say. In other words, whether to continue with the mining or to conclude it. It is a quick process,” Flahiff said.
Northern Lion is one of thousands of ‘junior’ Canadian mining companies, firms which undertake exploration which they then ‘sell off’ to larger concerns in the industry if prospecting looks promising.
Juniors have been struggling for several years to raise equity for early-stage risky exploration, partly a knock-on effect of the global economic crisis.
In light of this situation, the news on Centerra’s interest is significant.
The official Northern Lion press release on the recent collaboration said that Centerra could earn “up to 70% interest in several of the company's exploration permits located in the Larnaca and Paphos Districts of Cyprus”.
It went on to say that Centerra funds would go towards mobilising a ground-based electromagnetic geophysical survey over Lysos, an area identified by a 2011 air-borne survey as consisting of a cluster of seven anomalies (areas worth investigating) within an area of 17 square kilometres. The largest anomaly is spread over 3.2 kilometres as reported last July.
The ground-based geophysical survey would be designed to follow-up on the previous air survey results and identify buried targets in underexplored areas of western Cyprus, the release said.
Northern Lion has been prospecting in Cyprus for five years.
Last spring, news hit local headlines of massive sulphide bodies discoveries which pointed to the presence of gold deposits.
“Cyprus has traditionally been known for copper deposits and where there is copper there is usually gold. They tend to hang out together,” Flahiff said.
Whether or not any future mines would be a pits or shafts would depend on findings with the latter necessary if deposits were located at some depth.
Mining expertise and equipment would be brought in from abroad while field crew labour would be local. In terms of impact on the local economy, Flahiff said there would be some benefit for property rental and leisure sectors.
A spokesman for Centerra Gold Inc. confirmed to The Cyprus Weekly that the company had entered into a non-binding proposal with Northern Lion to fund early-stage exploration activities but had to finalise an agreement. This week gold was trading at close to .
1,600 US a troy ounce.
LUCIE ROBSON, REPORTING FROM TORONTO