Nevada Canyon set to fund exploration at Walker River gold project

Walker River Resources Corp. [WRR-TSXV] has signed an exploration stream earn-in agreement with a unit of Nevada Canyon Gold Corp. [NGLD-OTCQX]. The agreement aims to facilitate exploration and development of the Lapon Canyon gold project, which is located within the prolific Walker Lane gold trend, 55 kilometres southeast of Yerington, Nevada.

Walker River owns a 100% interest in Lapon Canyon, which consists of 96 unpatented lode claims and is located within the Walker Lane shear zone, a 100-kilometre-wide structural corridor extending in a southeast direction from Reno, Nevada. It is accessible via state roads.

It is a trend that plays host to numerous gold, silver and copper mines, notably the Comstock Lode mines in Virginia City. Nevada Canyon previously acquired a 3.0% total net smelter return royalty in the project, which contains underground workings and three adits.

The agreement provides that, subject to certain conditions, Walker River will grant Nevada Canyon an exclusive right to earn and purchase either an undivided 50% interest in Lapon Canyon, or a alternatively, a production royalty in the project. Having pledged to fund US$5.0 million in exploration expenses over three years, Nevada Canyon has the right to accelerate completion of the minimum work requirements and exercise its earn-in right at its discretion.

Nevada Canyon is required to incur the exploration expenses in stages, including US$1 million during the first annual period and US$2.0 million in each of the second and third periods.

The exploration program is expected to include definition drilling, initial and subsequent compliant mineral resource estimates, and completion of a preliminary economic assessment. Nevada Canyon will act as operator for the duration of the earn-in period, with Walker River providing its exploration expertise and guidance.

Once Nevada Canyon has acquired the 50%-earned interest, the parties will form a Nevada limited liability company and contribute the Lapon Canyon project to the joint venture LLC for its joint development and operation. Each party will fund its pro-rata share of future exploration expenses or face dilution of its interest in the joint venture LLC. If a party’s interest is diluted below 10%, its interest will be converted to a 2.0% net smelter return royalty, subject to a buydown option to 1.0% exercisable at any time for the payment of US$2.5 million.

Walker River was unchanged at 19 cents, Tuesday. The shares trade in a 52-week range of 30 cents and 15 cents.

The two parties agreed upon closing that Nevada Canyon’s US$200,000 promissory note dated December 19, 2024, including principal and accrued interest, shall be deemed satisfied in full and credited toward Nevada Canyon’s exploration expense obligations for the first annual period.

“We are very excited to have the funding in place to confirm and prove up the potential of Lapon Canyon,’’ said Walker River President Michael David. “We can now accelerate the drilling and development of the Lapon Canyon project.’’