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September 12, 2017

Canadian mining company eyes property near national monument

Photo / LandVest
Photo / LandVest
Wolfden Resources Corp., a mineral exploration company based in Thunder Bay, Ontario, plans to buy almost 7,000 acres located at Pickett Mountain in northern Maine for $8.5 million as an investment that includes possibly mining its deposits of copper, lead and zinc.

Wolfden Resources Corp., a mineral exploration company based in Thunder Bay, Ontario, plans to buy and mine property in northern Penobscot County that's near Katahdin Woods and Waters National Monument.

The company announced in a Sept. 7 news release that is has entered into a purchase-and-sale agreement "with an arm's length third party to acquire a 100% interest in property located in Pickett Mountain, Penobscot County, northern Maine" for a cash price of $8.5 million.

Located just off Route 11 north of Patten and along the border of Penobscot and Aroostook counties, the Pickett Mountain property was marketed by LandVest as an "exceptional investment opportunity located in the heart of Maine's north woods" with a "well-stocked and diverse timber resource, more than 12 miles of nearly undeveloped lake and river frontage, and prospective sub-surface mineral rights."

The acquisition involves 6,871 acres of timberland and is subject to a 45-day due diligence review by the company prior to closing, Wolfden stated.

In its news release, Wolfden stated that the property is considered "to be one of the highest-grade undeveloped volcanogenic massive sulfide deposits in North America," which was discovered by Getty Mines Ltd. in 1979 and had not been explored since 1989. It explicitly cites LD 820, "An Act To Protect Maine's Clean Water and Taxpayers from Mining Pollution," approved by lawmakers in June and slated to go into effect on Nov. 1, as a factor in its interest, stating that the law permits "mining of metallic minerals in Maine in certain prescribed situations."

It also noted that "price appreciation" in zinc and copper has revived interest in mining projects like Pickett Mountain.

"Wolfden sees significant exploration opportunity in this jurisdiction that it believes is vastly under-explored," the company stated, citing preliminary metallurgical tests that showed high potential for copper, lead and zinc recoveries.

Red flag in earnings report?

In its financial statement for the six months ended June 30, Wolfden noted that it was incorporated in 2009 and describes itself as a company whose "principal business activity ... is the acquisition, exploration and development of mineral properties that it believes contain mineralization that will be economically recoverable in the future."

It also acknowledged that so far it's losing money.

"The corporation, being in the exploration stage, is subject to risks and challenges similar to companies in a comparable stage of development," the financial report stated. "These risks include the challenges of securing adequate capital for exploration, development and operational risks inherent in the mining industry as well as global economic and gold price volatility. At June 30, 2017, the corporation has not yet achieved profitable production and has accumulated losses of $21,151,890, which may cast substantial doubt on the corporation's ability to continue as a going concern. The corporation's continuance as a going concern is dependent upon its ability to obtain adequate financing or to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the corporation will attain profitable level of operation."

Lucas St. Clair, whose family donated the 87,500 acres that are now part of the Katahdin Woods and Waters National Monument located to the southwest of Pickett Mountain, told the Bangor Daily News that industrial activity can coexist with the national monument, but indicated his nonprofit Friends of Katahdin Woods and Waters would be monitoring any mining operations in the region to make sure Maine's mining laws were enforced.

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