On October 16th 2015 Castle Silver Resources Inc. entered into an assignment agreement with Gold Bullion Development Corp. (now Granada Gold Mine Inc.) granting Castle the right to acquire a 100% interest in the Beaver and Violet cobalt and silver properties located in the township of Coleman in northeastern Ontario Canada near Cobalt Ontario and roughly 80 km southeast of the former producing Castle Mine at Gowganda. In return Castle Silver Resources Inc. agreed to pay Granada Gold Mine Inc. $75,000 comprising a short-term payment of $15,000 due within ten days of the execution of the agreement.
On June 30, 2016, as part of the cobalt development strategy, Castle Silver Resources Inc. entered into a letter of intent with Granada Gold Mine Inc. to advance the recently discovered “Castle Golden Corridor Zone” whereby Castle Silver is to transfer a 50% interest in 5 contiguous mineral claims on the property covering 91 Hectares in lieu of $60,000 in property payments due to Gold Bullion as outlined in the October 2015 Assignment Agreement.
Castle Silver Resources Inc. will also assume all legal responsibilities for the properties that Gold Bullion, (Granada Gold Mine Inc.) entered into when those properties were acquired on February 14, 2012 including the requirement to incur an aggregate of $100,000 in expenditures on the properties over the following seven years and make $60,000 annual payments to Ansil Resources for the following five years as pre-payment of a 3% net smelter return royalty held by Ansil. Castle Silver Resources Inc. retains the right to purchase the 3% NSR royalty by paying $1.5 million to Ansil Resources for each percentage point of the NSR royalty.
The Beaver property consists of one single 20-acre patented mining claim and includes surface and mineral rights. The physical location of the property is close to the town of Cobalt specifically, N part, NW1/4, N1/2 Lot 1, Concession III in Coleman Township.
Beaver Consolidated Mines Ltd. produced 221.7 tonnes silver (7,127,858 ounces) from the Beaver Property in the period between 1907 and 1940. According to historical records, the silver was mined from near-vertical Ag-Co-Ni veins near the upper contact of a shallow Nipissing diabase intrusive. This intrusive crosscuts Archean age sedimentary and volcanic rocks.
Beaver Consolidated Mines Ltd. originally worked the Beaver Mine between 1907 and 1940 developed by two shafts with the deepest at, 487.7 metres, (1600 feet) plus 8.5 miles of drifts and crosscuts. The vein system on the Beaver property extends south into the adjacent Timiskaming property. The Beaver Mine features one of the deepest shafts in the Cobalt Camp at 487.7 metres (1600 feet) and a winze to a further 22.9 metres ~75 feet.
This was one of the earliest shafts to penetrate the entire thickness of the diabase intrusion and led to the discovery of silver veins on the lower contact. The mine workings were de-watered in the 1970’s and the old workings from the lower contact were widened to allow access for larger more modern equipment. Production from the 1970’s was entirely from veins on the lower contact with total production at that time coming to 29,878 ounces silver, 2,724 pounds cobalt, 3,189 pounds copper and 905 pounds of nickel.
Production from the mines adjoining the Beaver Mine directly to the South and West included the Temiskaming Mine, 376.9 tonnes silver (12,118,796 ounces), Brady Lake Mine, 96.4 tonnes silver (3,100,000 ounces), Cobalt Load, 139.8 tonnes silver (4,493,725 ounces) and the Christopher Mine, 127.5 tonnes silver (4,100,000 ounces).
Between 1977 and 1989 Agnico Eagle Mines produced 124 tonnes silver (3,986,761 ounces) broken down as follows: 122.96 tonnes silver (3,953,319 ounces) from the Cobalt Lode and Duchess claims south of the Beaver property, 0.929 tonnes silver (29,878 ounces) from the Beaver property and 0.111 tonnes silver (3,564 ounces) from the Brady Lake claims. All later production was from the lower contact area of the Nipissing diabase.
Agnico Eagle accessed the properties from the 487.7 metre level of the Beaver Shaft and later from a cross cut driven from the Temiskaming Shaft. Takara management believes that diamond drilling of the lower contact area of the Beaver property is warranted to test a near flat fault known to exist at Beaver. A similar flat fault in the Duchess and Cobalt load appears to have been a controlling feature in the ore mined by Agnico Eagle
The rationale for acquiring the Beaver and Violet properties relates to the silver history and cobalt production history in light of increasing global demand for cobalt. Electric car manufacturers use cobalt, lithium, nickel, and aluminum as the cathode material in their “long life” batteries. Over 50 kg of the 544 kg battery pack each Tesla vehicle contains is comprised of cobalt. In 2014, worldwide cobalt production was 112,000 tonnes with half coming from the unstable and crisis prone DRC in Africa.
According to technology metals specialists, cobalt prices have been stagnant at US $13 per pound for the past few years but now may be expected to strengthen. In 2015 China’s State Reserve Bureau announced it had purchased 400 tonnes of cobalt at $32,931 per tonne ~ $15 per pound, the news of which lead to an immediate price jump globally. With demand rising and forecast supplies falling short, the market is forecast to be in deficit by up to 6,000 tonnes in 2016.
Looking ahead, management plans to continue work on the properties once funds are secured. The search for funding is showing promise now that market conditions have improved. Several metals analysts have suggested that silver may outperform gold in percentage terms over the next up cycle and as of August 2016 for the year 2016 thus far, this has in fact been the case. The first step once funds are secured is an IP geophysics programme to build on and advance the positive findings from previous work, a 1.000 metre drill program, stripping and underground sampling. Data collection will continue on the ground for comparison to, and verification of, existing maps and data.