Gold Terra acquiring Con mine option from Newmont, Northwest Territories
Gold Terra Resource Corp. [YGT-TSXV; YGTFF-OTCQX; TX0-FSE] has entered into a definitive option agreement with Newmont Canada FN Holdings ULC and Miramar Northern Mining Ltd. (MNML), both wholly owned subsidiaries of Newmont Corp. [NGT-TSX; NEM-NYSE], which grants Gold Terra the option, upon meeting certain requirements, to purchase MNML from Newmont FN, which includes 100% of all the assets, mineral leases, Crown mineral claims and surface rights comprising the Con mine, as well as the areas immediately adjacent to the Con mine, Northwest Territories.
Gold Terra also entered into a subscription agreement with Newmont to complete a strategic investment in the company for gross proceeds of $1.5-million (7,142,857 common shares of the company at a price of 21 cents per share), resulting in Newmont holding less than 5% of the issued and outstanding common shares of Gold Terra. Poceeds from this investment are expected to be used primarily for exploration expenditures on the Con mine property. It is expected that the closing of the investment will occur around November 26, 2021, and is subject to conditions, including regulatory approval.
The option agreement provides Gold Terra with an option to purchase 100% of MNML, the owner of the formerly producing high-grade gold Con mine, which produced more than 6.1 million ounces along the Campbell shear structure. The option agreement will immediately replace and supersede the initial exploration agreement dated September 4, 2020, and will allow Gold Terra to fully explore 100% of the Campbell shear structure at the Con mine and south of it.
Gerald Panneton, executive chairman of Gold Terra, commented: “This new option agreement to acquire 100% of MNML’s Con mine is a significant step for Gold Terra to increase our resource base with high-grade ounces along the prolific Campbell shear structure and to add to our current inferred mineral resource, which currently stands at 1.21 moz. We are pleased to have developed an excellent relationship with Newmont and welcome them as shareholders of Gold Terra, which illustrates commitment and support for the future. The additional land package along the Campbell shear, and all the surface access assets and associated infrastructure will allow Gold Terra to accelerate its exploration strategy with the aim of adding a target of two moz of high-grade resources base to sustain the development of the project in the future.”
Newmont will retain a 2% NSR on minerals produced from the Con mine property. The NSR may be reduced by 50% by paying Newmont $10-million for two years following the announcement of commercial production.
After Gold Terra exercises its option, Newmont will have a period of two years to exercise its back-in right of a 51% participating interest in MNML and the Con mine property, which can be triggered by Gold Terra delineating a minimum of 5 million ounces of gold in the Measured and Indicated mineral resource categories supported by a NI 43-101 technical report.