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Melchett Lake VMS Project

Melchett Lake VMS Project, Thunder Bay Mining District, Ontario

The Melchett Lake belt contains several occurrences of polymetallic Zn- Pb-Cu-Ag-Au VMS style mineralization similar in character to ore deposits exploited at Mattabi, Winston Lake, Geco, Brunswick and Rouyn-Noranda.

The Ontario Geological Survey Exploration Highlights in 2016-2017 reported “The potential of discovery of economic zinc-lead-silver-gold-bearing VMS deposits in the Melchett Lake greenstone belt is high.”

The multi-kilometre strike length of the known areas of mineralization, depth potential indicated by the Maxwell modelling, broad intervals of mineralization, intense alteration profile similar to well-known polymetallic deposits, and presence of high grade values of both precious metals and base metals clearly provide Silver Spruce Resources Inc. with an opportunity to grow with the strong gold, silver and zinc markets.

Furthermore, our Director, Greg Davison, MSc, PGeo, has first-hand experience on the Melchett Lake area, having worked the area as Project Manager and VP Exploration for Kerr Addison Mines (1983-1984) and Tribute Minerals (1999-2002), respectively.”

Property Agreement

“We are very pleased to complete the Definitive Agreement to acquire 100% interest in the promising Melchett Lake VMS property,” stated Greg Davison, Director of Silver Spruce. Silver Spruce Resources Inc. signed a binding Letter of Intent (“LOI”) on September 9, 2019 to acquire 100% of the Property. Silver Spruce had a 90-day window to December 6, 2019 to carry out its due diligence and execute a DA.

The principal terms of the DA, as per the LOI, to purchase 100% interest in the Property include CAD$150,000 in cash payments and five million Silver Spruce common shares, spread over three years. The initial payment to the Vendor of CAD$25,000 and 500,000 shares is due upon signing and TSX Exchange approval.

Minimum work expenditures total CAD$1,000,000, with CAD$100,000 during the first year, CAD$200,000 in the second year and CAD$700,000 prior to the third anniversary, with all periods based from TSX Exchange approval of the DA. The Vendor will retain a two percent Net Smelter Return royalty of which 1% can be purchased by the Company for CAD$1,000,000 and the remaining 1% at market price.

Property Claims

Recent map staking by Silver Spruce of the extensions of the favourable mineralized horizons has doubled the size of the Property from 2,124 hectares to the current 3,996 hectares. The project is located within an active exploration and mining region north of Geraldton including Copper Lake’s Marshall Lake VMS project, Premier Gold’s Hardrock-Greenstone Au project and past-producing Anaconda-Dofasco iron mine and the Skibi Lake and Stewart Lake iron prospects, and along one of the access routes proposed northward from Nakina to the Ring of Fire Ni-Cr-Cu-PGE exploration projects.

The Melchett Lake Property consists of 190 single cell mineral claims and two multi-cell mineral claims located in Thunder Bay Mining District of northwestern Ontario, Canada. The Property lies 110 km north of Geraldton and 60 km north of Nakina at 5045' north latitude and 8659' west longitude.


The Property is accessible via ski or float equipped aircraft from Nakina or Jellicoe to Kapikotongwa Lake, Melchett Lake or Relf Lake. Road access is available from Geraldton and Nakina to the northwest on paved and unpaved roads along the past principal route to the Anaconda/Dofasco iron mine and near the proposed all-season road northeast to Marten Falls, to boat launch points and helicopter staging areas on the south end of Melchett Lake, within five to eight kilometres of the Property.


The Melchett Lake property is located within the English River Sub-province of the Archean-age Superior Province as part of the east to west-trending Melchett metasedimentary-metavolcanic belt. The metavolcanics are comprised of mafic to felsic pyroclastics, tuffs and flows with metasediments including cherts and Fe-lean to Fe-rich iron formation all of which have been metamorphosed to amphibolite grade. The general bimodal mafic-felsic sequence includes basalts overlain by felsic metavolcanics and associated clastic and chemical metasediments showing a near-vertical dip, steep ENE lineation in a folded sequence of schists and gneisses. Recent airborne magnetic surveys in 2002 and 2010 have identified significant tight to isoclinal folding, indicating multiple top directions and repetition of sequences with the thick felsic to intermediate metavolcanics. Metamorphism and deformation have overprinted much of the primary textural information though volcaniclastic breccias of felsic clasts in mafic matrix are observed, and may represent vent-proximal units.

Highlights of the exploration targets include multiple folded or stacked horizons of coincident alteration and metal mineralization, high Zn/Cu, Zn/Pb and Ag/Au ratios, extensive remobilization of major and trace elements with defined enrichment (Fe, Mg, Co, Cr, Cd) and depletion (Na, Sr, Ca) zones, and continuity, increased alteration and anomalous metal values over large intervals with a strong electromagnetic off-hole response. The mineralization is interpreted to occur as paleo-topographic accumulations related to fumarolic activity forming polymetallic deposits overprinted by a later stage gold-rich event.


Base metal mineralization consisting of pyrite, sphalerite, chalcopyrite and galena occurs within the felsic metavolcanic sequences of the Property. There are locally high-grade lenses of Zn & Ag with variable Cu, Au and Pb, and historical gold grades to 28.8 g/t Au, silver grades to 560 g/t Ag and zinc grades to 19.1%.

The mineralization is interpreted to occur as paleo-topographic accumulations related to fumarolic activity forming polymetallic deposits overprinted by a later stage gold-rich event. The extensive quartz-sericite-pyrite alteration is consistent with shallow water (<2km), basinal smoker-style to sub-surface replacement mineralization.

Several of the key elements of the prospective alteration and mineralization are as follows:

  • Three known centres of coincident alteration and metal mineralization
  • Multiple stratigraphic horizons
  • Distal and stacked proximal sulphides
  • High Zn/Cu, Zn/Pb, Ag/Au
  • Extensive remobilization of major and trace elements
  • Sericite-quartz-cordierite-chlorite alteration zone
  • Broad phyllic-pyrite zones
  • Intense Na depletion with elevated Zn
  • Ca and Sr depletion with elevated Zn
  • Fe, Mg, Co, Cr, Cd enrichment within and below mineralization
  • Continuity of alteration and anomalous Zn over large intervals in core drilling
  • Extensive alteration haloes analogous to world class zinc deposits

Historical Precious and Base Metal Assays

Selected grab samples taken from the Relf Zone by Shawmin averaged 13.0% zinc (Zn), 1.2% lead (Pb), 0.26% copper (Cu) and 325g/t silver (Ag); best results received were 19.1% Zn, 2.2% Pb, 0.40% Cu, 565g/t Ag and 1.72g/t gold (Au).

A selection of Relf and Nakina Zone samples collected in 1983 and 1984 by Kerr Addison geologist and current Silver Spruce director G. Davison is shown below.

Sample No.
Zinc ppm Lead ppm Copper ppm Silver ppm Gold ppb Zinc % Silver g/t
A-244 >10000 5400 1900 >100 78 7.03 120.7
A-245 >10000 5600 3500 >100 900 8.65 133.7
A-246 >10000 >10000 2600 >100 110 7.97 181
A-247 >10000 5500 7000 >100 1700 6.19 160.2
A-248 >10000 3700 3200 >100 250 8.65 133.7
A-249 >10000 1900 2100 64 97 10.3
A-250 >10000 1500 620 11 34 4.23
A-253 >10000 300 610 7 84 5.13
A-923 >10000 2480 1420 62 70 NR
A-925 >10000 645 2120 29 57 NR
A-926 >10000 420 2500 23.2 15 NR
Sample No.
Zinc ppm Lead ppm Copper ppm Silver ppm Gold ppb Zinc % Silver g/t
A-215 >10000 300 46 NR 720 2.89
A-437 >10000 2500 420 14.2 270 NR
A-439 >10000 2600 89 17.4 560 NR
A-441 >10000 210 1950 10.6 1000 NR
A-505 >10000 >10000 660 6.8 230 NR
A-512 >10000 1900 39 3.8 42 NR

A selection of Relf Zone samples collected in 1996 and 1997 by Redbird Gold is shown below.

Sample No.
Zinc % Lead % Copper % Silver g/t
1061 12.90 1.920 0.288 552
1064 11.60 0.866 0.507 278
1065 16.80 2.400 0.075 655
1066 8.26 0.330 0.972 170
1067 11.10 1.300 0.142 394
1068 9.88 0.558 0.154 179

At the Nakina l Zone, Nakina Mines reported, in separate samples, 14.85% Zn and 28.8g/t Au from a pyritized felsic volcanic unit. Rock sampling of a pyritized felsic volcanic unit in the Nakina 2 Zone by Kerr Addison returned a value of 15.08 g/t Au.

All of the above metal values were reported by past operators in the Melchett Lake area, from grab samples which may not be representative of the metal grades, and are historical in nature.

Due Diligence and Exploration

Field work for the due diligence was initiated in October 2019 and an update to the NI 43-101 technical reporting by the independent Qualified Person (“QP”) is planned over the next few months and initiated coordination of ground truthing of geochemical and geophysical targets, geological sampling and data verification on known occurrences, GPS location surveys of the historical drill collars, and preservation and sampling of the diamond drill core stored on the Property.

Mr. Davison, MSc, PGeo, who worked the Melchett Lake area as Project Manager and VP Exploration for Kerr Addison Mines (1983-1984) and Tribute Minerals (1999-2002), respectively, led the management visit to the Property. Project geologist Luc LePage, MSc, PGeo is the manager of the on-site activities for the field program. Luc has extensive international experience including field work at the nearby Marshall Lake VMS project.

The recent project work was performed to verify the multi-kilometre strike length of the known areas of mineralization, broad intervals of mineralization, intense alteration profile similar to well-known polymetallic deposits, and presence of high-grade values of both precious metals and base metals reported from the historical exploration. The team examined the principal showings and trenches, and drill core at the Relf and Nakina targets along the principal mineralized trend. A total of seventy-two (72) rock and core samples were collected, sixty (60) of which were submitted for multi-element geochemical analysis. Results of all samples are now in receipt and pending interpretation.

Silver Spruce reported precious and base metal assay data from the first batch of thirteen (13) rock samples collected from the Nakina and Relf Zones. Zinc values range up to 14.7%, lead to 0.96%, copper to 0.52%, silver to 301 g/t, and gold to 0.737 g/t and clearly represent the polymetallic nature of the mineralization from both targets, particularly the Relf Zone. The samples exhibit low alkali content, favourable pathfinder ratios, e.g., Zn/Na, and elevated values of heavy metals, including Te, Bi, Se, Sb, Hg, Cd and In, associated with sphalerite, galena, chalcopyrite and pyrite observed in the rock samples.

A selection of the Silver Spruce 2019 precious and base metal assay data is tabulated below.

Sample No.
Zinc ppm Lead ppm Copper ppm Silver ppm Gold ppm Zinc % Silver g/t
108101 20 10.6 16.5 1.1 0.031    
108102 2 0.4 0.7 0.02 0.002    
108103 3310 892 58.6 1.6 0.088    
108104 >10000 6690 399 4.06 0.383 3.24  
108105 108 63.8 11.8 0.31 0.022    
108106 230 22.5 52 1.04 0.012    
108201 203 12.4 51.7 1.02 0.012    
108204 >10000 622 1465 27 0.053 3.98  
108205 >10000 634 1470 27.5 0.03 1.08  
108207 >10000 1185 2250 52.7 0.034 4.42  
108210 >10000 2740 5180 >100 0.737 9.12 131
108211 >10000 863 2050 39.1 0.054 4.89  
108217 >10000 9650 1600 >100 0.119 14.7 301

“We continue to update the multi-element data received this week from the recent due diligence sampling, while building our GIS database with revised drill hole co-ordinates, and geophysical and geological information focusing on the next phase of the ground truthing program and developing priority drill targets”, stated Greg Davison, Silver Spruce Director.


Ontario Ministry of Energy, Northern Development and Mines work permits are in place for geological sampling work, stripping, trenching and diamond drilling (>20 pads).

Exploration History

Base metals were first reported in 1959 by the Kerr-Lund and Little Long Lac Gold Mines who completed geophysics, trenching and diamond drilling in the Kerr-Lund (Relf) Zone. Between 1964 and 1989, the area was held by Shawmin, Nakina Mines, Chimo Gold Mines, Falconbridge, Cominco, Kerr Addison Mines, Minnova and Inmet. Work programs included regional geological mapping, rock geochemical surveys, trenching, ground and airborne geophysical surveys and limited drilling of the Relf Zone, Nakina l Zone and Nakina 2 Zone. In 1996, Redbird Gold conducted ground magnetometer and MaxMin II EM surveys of the eastern and western extensions of the mineralized horizon.

Tribute staked a large claim group in December 1999 and during 2001-2002 completed a 217 line-kilometre DIGHEMv airborne magnetic and electromagnetic geophysical survey using a 100metre separation (Davison, 2002 assessment report). The property was transferred to a syndicate of investors in 2003 and later optioned by Stratabound Minerals who in 2007 and 2008 completed two drill holes and downhole geophysics with Maxwell modelling. The recently acquired Property of 2,124 hectares was staked by the current Vendors in 2017. The Melchett Lake Property size was increased to 3,996 hectares by the Company in November 2019.

In addition, Fugro carried out a regional airborne magnetic gradiometer survey for the Ontario Geological Survey from 2009-2010 which comprised over 75,000 line-kilometres of data acquisition, flown in a north-to-south direction with 200 m flight line spacing and roughly centred over the Melchett Lake Property.

Qualified Person

Greg Davison, MSc, PGeo and Silver Spruce Director, is the Company's internal Qualified Person (QP) for the Melchett Lake Project and is responsible for the technical content of this press release within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), under TSX guidelines. Mr. Davison worked the Melchett Lake area as Project manager and VP Exploration for Kerr Addison Mines (1983 and 1984) and Tribute Minerals (1999 to 2002), respectively.