Melkior Resources Inc. announced that it has entered into a letter of intent to acquire 100% of the Beschefer East Project from SOQUEM Inc. from SOQUEM Inc. (SOQUEM), an entity at arms length to the Company. SOQUEM is a subsidiary of Investissement Qubec. The Beschefer East Project is located approximately 90 km west of Matagami and 100 km north of La Sarre, Québec, with good road access and a powerline running through the Project. The Project has significant gold and polymetallic potential with geological similarities to SOQUEM's B26 deposit, located 7 km east, which hosts an indicated resource of 6.97 Mt at 1.32% Cu, 1.80% Zn, 0.60 g/t Au and 43 g/t Ag. The Project shares a border with Goldseek Resources' Beschefer Project, where historical drilling has identified 55.63 g/t gold over 5.57 metres, including 224 g/t over 1.23 metres within the B14 Gold Zone. The Project comprises 55 claims covering 2,906 hectares in the Eeyou Istchee Baie-James territory, Nord du Qubec region. The Project was worked intensively from the sixties to the early nineties by BHP Billiton while operating the Selbaie Mine. The use of diverse geophysical approaches in conjunction with overburden gold sampling was essential due to the thick overburden blanket. It led to the discovery of multiple gold, copper, silver, and zinc anomalies in a felsic volcanic rock environment. The Project was then systematically explored by SOQUEM between 1992 and 2012, building a tight grid of geophysical anomalies, followed by drill testing. Exploration was done using a checkered geophysics line pattern to evaluate the potential of different structural orientations. Around 300km of surveyed lines were completed in conjunction with drilling 11,200 metres distributed in 42 holes. The Company aims to expand on the gold, copper and silver anomalies identified in prior drill programs and integrate data to confirm gold trends spatially associated with extensive low-grade base metal mineralized systems. Results: The best gold results were obtained from the Power Line target located in the northern part of the Project. Hole 1172-99-30 returned a series of individual mineralized intervals from 2 to 5 g/t over lengths of 0.5 to 6 metres within a large interval of 70 metres. Hole 1172-13-40 intercepted 2.1 g/t over 5.4 metres, including 7.9 g/t over 0.9 metres. Gold mineralization is hosted in a quartz-carbonate centimetric veins network cross-cutting felsic to the intermediate volcanic rock affected by variable pervasive alteration associated with minor amounts of pyrite. Hole 1172-98-24 intersected the same type of mineralization but was hosted in deformed and carbonate-altered andesite located in the southern half of the property. Short anomalous copper anomalies were intersected in a sector identified as the Noramco target. From prior SOQUEM programs, the best results were 0.26 % over 4.8 metres and 0.24% over 4 metres (1172-98-24 and 1172-99-30, respectively). Geology: The Project is located in the eastern part of the Brouillan volcanic complex, which is a part of the North Volcanic Zone of the Abitibi Greenstone Belt. The drill coverage has highlighted the felsic dome facies, along with related lapillis and fine tuffs that have been affected by a north-east trending polyphased folding pattern. To the south, basalt and gabbros have been identified interlayered with graphitic sediments and cherts.
Hydrothermal alterations have favorable characteristics for the exploration of volcanogenic massive sulfides deposits (VMS). On the west side of the Brouillan syn-volcanic intrusion, the Selbaie Mine produced 53 Mt of ore at grades of 0.96% Cu, 1.9% Zn, 40.7 g/t Ag, and 0.58 g/t Au. The rock units of the Project have been affected by deformation and structural elements related to the Bapst Fault. Additionally, the north-east deformation zones, including the extension of the Beschefer gold structure, are interpreted to pass through the
property. Under the terms of the LOI, Melkior has the right to earn a 100% interest in the Project through an option, subject to a net smelter return royalty of up to 2.5% on certain claims made up of a historical NSR of 1.5% and 1% granted to SOQUEM. To earn an undivided 100% interest in the Project, Melkior must make total cash payments of $50,000, issue $500,000 worth of common shares in the capital of Melkior to SOQUEM and incur Work Expenditures of $1,500,000 in total. The LOI will shortly be replaced with the Definitive Agreement and the Definitive Agreement and issuance of shares to SOQUEM thereunder is subject to TSX Venture Exchange ("TSXV") approval and the Company's filing requirements with TSXV. All common shares of Melkior issued under the Definitive Agreement will be subject to a hold period of 4 months and one day from the date of issuance.