• Cu: $
  • Au: $
  • TSX-V: CMIL
  • OTCQB: CMILF
  • FRA: N7D2

Hessjøgruva-Kjøli High-Grade Copper-Cobalt District

Capella 100%

Exploration-Stage Copper-Rich VMS in the northern Røros Mining District, Norway

Capella’s Hessjøgruva-Kjøli copper-cobalt project is located in the northern part of the former Røros copper mining district. The cornerstone asset, Hessjøgruva, was acquired from local company Hessjøgruva AS on April 6, 2022, and is an advanced-stage exploration project with approximately 12,000m of core drilling dating from the 1970’s. The adjacent Kongensgruve claim block was staked by Capella in July, 2022, and contains four known former mines (Rødalen, Kongensgruve, Fjellsjøen, and Muggruva) in addition to a former mineral processing facility and tailings dam at Kongensgruve. The Kjøli project is located some 20km NE of Hessjøgruva and is an exploration stage project in which four priority drill targets have been identified and permitted for a maiden core drilling program (Figure 1).

Figure 1. Locations of the principal target areas in the Hessjøgruva-Kjøli district. 1. Hessjøgruva project, 2. Kongensgruve project, and 3. Kjøli project.

Project Snapshot

Location

20km SE of Ålen, Trøndelag Province, central Norway

Ownership

100% Capella Minerals Ltd
Hessjøgruva: 2.5% NSR to Hessjøgruva AS, with 0.5% purchasable for Euro 1M
Kjøli: 2.5% NSR to EMX with 0.5% purchasable for USD 1M
Kongensgruve: no third-party NSR

Status

Exploration-stage

Deposit types

High-grade copper-rich VMS deposit

Host Rocks

Meta-volcanic and sedimentary sequences

Age

Cambro-Silurian, Ordovician orogeny

Main Economic Elements

Copper, Zinc, Cobalt (minor Silver, Gold)

Access

All weather paved highways and gravel roads

 

The Hessjøgruva-Kjøli district is favourably located with regards to infrastructure. Both the main Trondheim-Røros highway and railway line pass through the centre of the project area. Low-cost hydroelectric power is also readily available in the district.

Hessjøgruva Project - Highlights

  • Systematic exploration (including approximately 12,000m of core drilling) was completed at the Hessjøgruva project during the 1970’s by previous operators, including former local mining company Røros Kobberverk AS. Historical assaying was focused principally on copper and zinc, but not cobalt.
  • The copper-zinc-cobalt mineralization at Hessjøgruva is lenticular massive-sulfide (“VMS”)-type, identical to the mineralization type being targeted at Kjøli. The Hessjøgruva mineralization occurs primarily in three lenses (A-C, with Lens A hosting most of the high-grade mineralization; Figures 2&3), all of which extend from surface to >400m vertically below surface and all remain open down-dip. Mineralization is dominated by chalcopyrite, pyrite/pyrrhotite, and sphalerite, with Cu content observed to increase with depth in the deposit.
  • The average thickness of the highest-grade Lens A is approximately 10m1, with the thickest and highest-grade intercept reported from the historical drilling being 14.5m @ 4.35% Cu + 1.3% Zn (or 4.8% Cu equivalent2) (approximate true thickness) from 455.5m to 470m downhole in DDH-312. This Cu-Zn-Co mineralization remains open down dip.
  • Capella announced the filing of an independent Canadian NI 43-101 compliant technical report for the Hessjøgruva project, in which all exploration activities to date have been summarized, on SEDAR (www.sedar.com) on September 8, 2022.

1 Geological Survey of Norway Report 2007.023; The Hersjø ore deposit, evaluation of ore potential.
2 Copper equivalent grades have been calculated using copper and zinc prices of USD 9,900/T and USD 3,700/T, respectively, with no adjustment having been made for metallurgical recovery as these are unknown at this time (metal price data: London Metal Exchange, www.lme.com).

Figure 2. Plan view of diamond drill-holes in high-grade copper-zinc-cobalt mineralization in Lens A, with the surface projection of mineralization shown in Figure 4 also indicated (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J. 2016; NTNU M.Sc. Thesis
Figure 3. Section showing high-grade Cu-Zn-Co mineralization in Lens A (source: Geometric and Qualimetric Modeling of the Hessjø deposit; Nørsett, S.J. 2016; NTNU M.Sc. Thesis). Location of a potential future adit to access high-grade mineralized zones is also shown.

Terms of the Hessjøgruva Acquisition

Capella may acquire a 100% interest in the Hessjøgruva Cu-Zn-Co project in return for:

  1. Capella managing and funding exploration / development activities on the project.
  2. Capella paying Hessjøgruva AS a one-time amount of Euro 500,000 upon completion of a positive Bankable Feasibility Study.
  3. Capella providing Hessjøgruva AS with a 2.5% Net Smelter Royalty (“NSR”) on all future metal production from the project, retaining an option to buy-back 0.5% of this NSR at any time prior to the commencement of commercial production for Euro 1,000,000.
  4. Capella to cover the cost of annual property payments and basic administration costs.

Kongensgruve Project - Highlights

Capella successfully staked 20 square kilometres of exploration claims over the past-producing Kongensgruve area in July, 2022. The central portion of the Kongensgruve claim block lies approximately 6km east of the Hessjøgruva project, contains a series of known copper-zinc-cobalt occurrences (including Rødalen, Kongensgruve, Fjellsjøen, and Muggruva)(Figures 4 and 5), and also covers the site of a former mineral processing plant and tailings dam. An application for a further 25 sq. km of exploration claims was made over open ground located to the south-southwest of the main Kongensgruve claim block (Figure 4).

Figure 4. Capella explorations concessions (granted and pending) in the Kongensgruve area.
Figure 5. Former Rødalen mine workings, Kongensgruve project.

Kjøli Project - Highlights

Capella’s Kjøli project covers the former Kjøli and Killingdal copper mining operations, together with approximately 20 km strike of underexplored but highly prospective stratigraphy for the discovery of new copper-rich VMS deposits. Capella has completed its drill targeting work at Kjøli and identified 4 priority target areas – Kjøli Deeps, Kjøli, Grønskard, and Guldalsgruva – for follow-up drill testing. Permits were subsequently received from the Norwegian Directorate of Mining for up to 4,000m of diamond drilling in 25 holes at Kjøli.

Primary target areas identified for drilling at Kjøli include:

  1. the Grønskard, Kjøli, and Guldalsgruva targets, all of which are located along the main prospective horizon for VMS deposits, and
  2. Kjøli Deeps, a large (>2km strike length), deep (>350m) electromagnetic (“EM”) conductor which is interpreted by the Company to represent a buried, NW-dipping massive sulfide body. Kjøli Deeps may also represent a “stacked lens” that underlies the main Kjøli target.

2022 and Beyond Work Program

The Company’s expected work plans for the Hessjøgruva-Kjøli district include:

  1. The completion of a Canadian NI 43-101 compliant Mineral Resource Estimate (“MRE”) for Hessjøgruva. In addition to producing a formal MRE, this study would identify those areas where infill drilling is required in addition to determining where step-out drilling would have the highest probability of extending known mineralization.
  2. After the completion of the MRE and any further recommended drilling, Capella would initiate preliminary mining studies (potential mining and mineral processing scenarios, and infrastructure requirements of the project) in the lead-up to a preparing a Preliminary Economic Assessment for the project.
  3. Evaluate the possible construction of an adit at Hessjøgruva at around the 700m level from the adjacent Hessdalen Valley, in order to provide direct access to the high-grade mineralized horizons and to facilitate further drill testing from underground.
  4. Initiate the Company’s maiden core drill program on priority target at Kjøli over the 2022/2023 winter season.