Hunt Mining Pens Letter of Intent for Property Previously Explored by Kinross

Hunt Mining Pens Letter of Intent for Property Previously Explored by Kinross

By: Tomas Ronolski - AllPennyStocks.com News

Friday, September 20, 2013

We regularly talk about location when it comes to assessing junior miners as a means of speculating about corporate value. Whatever the target is, for example base metals or precious metals, there’s certain places in the world that just keep cranking out the respective mineral year after year. When it comes to gold in North America, there are many areas to dig up the precious yellow metal, but the proven track records of Nevada, Canada’s Red Lake District and Alaska are irrefutable. Hunt Mining Corp. (TSX-Venture:HMX) has already established a presence in southern South America with its flagship La Josefina, Bjo Pobre and La Valenciana projects that are in a prolific region near major miners like Goldcorp. (TSX:G), AngloGold Ashanti (NYSE:AU) and Coeur D’Alene Mines (NYSE:CDE) in Argentina.


As the company advances some of those projects to the late-stages of exploration, it is now looking to expand its portfolio further to the north, much further. Hunt said on Friday that it has signed a Letter of Intent with an unnamed private optionor regarding acquiring the Amanita project in Alaska. The project is located in the Fairbanks mining district and 3.5 miles south the appropriately named Fort Knox gold mine that produces 350,000 ounces of gold each year. Historically, the Fairbanks district has produced an estimated 8 million ounces of gold from lode and placer claims.

Kinross Gold (TSX:K) previously explored the property for three years up until 2001, defining a 5,000 by 12,000 foot gold soil anomaly and completing over 15,000 feet of reverse circulation drilling to identify an oxide gold zone to 300 feet. As with many other projects during the 1990’s and early 2000’s low gold prices caused the cessation of exploration and Kinross didn’t renew its lease on the property.

With gold prices substantially higher now, many promising projects have re-opened. Hunt conditionally agreed to lease the property upon a more thorough, three-month due diligence process as well as other customary approvals. Upon the signing of a definitive agreement, the LOI spells out terms that include paying the Amanita project owner $10,000 for the first year with the payment increasing $10,000 annually for the next 12 years. Hunt will make the first three years payments upfront ($60,000) or can buy the entire project for $3 million. Additionally, Hunt must spend a minimum of $100,000 annually on developing the project and agreed initially to a 3-percent Net Smelter Royalty payable to the owner, which can be bought at $1 million per percentage point.

“With the signing of the LOI, I believe the Company has a great opportunity to diversify our asset base across the Americas and add another outstanding property to our portfolio," said Matt Hughes, chief executive of Hunt Mining in a statement today.

Through the latest quarter ended June 30, Hunt had $4.08 million in cash on hand and total shareholder equity of $6.75 million. This is particularly interesting for a company trading at 3 cents with a market capitalization of $3.64 million. As a developmental miner, it’s not surprising that the company is still operating a loss, but it was relatively small at $320,261 last quarter. With the properties already in hand in Santa Cruz and possibly adding what seems to be a promising asset in Alaska to the portfolio, investors may start taking a closer look at Hunt for what it has to offer, given the depressed share price. Proper due diligence is, as always, encouraged.

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