Newmont Goldcorp taking 9.9% stake in GT Gold

GT Gold's exploration camp on the Tatogga property in the Golden Triangle region of northwestern British Columbia. Source: GT Gold Corp.

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GT Gold Corp. [GTT-TSXV, GTGDF-OTC] has announced a $17.6 million financing and strategic investment by Newmont Goldcorp Corp. [NGT-TSX; NEM-NYSE] that will accelerate exploration and development activities at the company’s wholly-owned Tatogga property in northwestern British Columbia’s Golden Triangle area.

The financing consists of a $17.6 million private placement of 11.5 million flow-through common shares priced at $1.53 per share. Under the financing, Newmont Goldcorp has agreed to acquire 11.5 million common shares as a back-end purchaser. Upon completion of the offering, Newmont Goldcorp will own 9.9% of GT Gold’s outstanding shares.

“Newmont Goldcorp’s investment is a significant milestone for GT Gold and represents a strong endorsement of the Tatogga property and recognizes the area’s appeal as a highly prospective gold district,” GT Gold President and CEO Steve Burleton said in a May 9, 2019 press release.

GT Gold is focused on B.C.’s Golden Triangle area.

The company had planned to complete 18,000 metres of drilling on the Tatogga property in 2018. But the program was expanded to 24,749 metres following the discovery of extensive high-grade gold-copper porphyry-style mineralization at the Saddle North occurrence.

News of Newmont’s participation comes after GT Gold recently said the final and deepest hole of its Saddle North porphyry drill program (hole TTD109) returned the strongest intercepts reported so far.

Drill hole TTD109 returned 0.62 g/t gold, 0.36% copper, 1.17 g/t silver (0.82% copper equivalent, and 1.12 g/t gold equivalent) over 1,149.70 metres from 11.33 to 1161.00 metres.

GT said the results confirm the presence of a high-grade stockwork and sheeted vein-rich “core zone” encompassing grades exceeding a 1.0% copper equivalent and a 1.5 g/t gold equivalent on section 5740, which reaches from near surface to greater than 1,300 metres down-dip, where it remains open, with associated true widths that approximate 100 metres near surface in hole TTD108, expanding with depth to greater than 300 metres in holes TTD093 and 300 metres further down-dip, in TTD109.

The company also said results from the previous 10 holes at Saddle North demonstrate that this high-grade core zone extends to at least 500 metres of strike, and that it lies within a much broader, strongly mineralized envelope which has a drilled strike length in excess of 650 metres, a true width of approximately 700 metres, and a down-dip extent of more than 1,300 metres.

“Newmont Goldcorp will bring significant technical expertise which will help GT Gold accelerate the development of Saddle North and our understanding of the geological potential of our large land package through this exciting phase of exploration,” Burleton said.

In connection with the financing transaction, GT Gold and Newmont Goldcorp will enter into an investor rights agreement, giving Newmont the right to:

  • Designate one nominee for appointment on the GT board for as long as Newmont Goldcorp holds at least 5.0% of GT’s outstanding shares.
  • Appoint half the members of the newly formed joint technical committee.
  • Maintain its pro-rate ownership in the company and under certain circumstances, increase its ownership up to 14.9% of GT.
  • A right of first offer on the Tatogga property in the event that GT Gold seeks to divest all or part of its interest in the property.

On May 9, 2019, GT Gold shares jumped to 99 cents as investors reacted to the announcement. On Friday, the shares slipped back 6.25% or $0.06 to 90 cents on volume of 595,100. The shares trade in a 52-week range of 41 cents and $2.15.

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