The announcement comes after Red Pine recently increased its ownership in the project to 100% from 63.3% by striking a deal with holders of the partnership interests in Citabar Limited Partnership, which previously held a 36.69% stake in the project.
Red Pine agreed to pay $12.6 million for the asset, an amount consisting of cash, common shares and a set off of approximately $1.1 million in amounts owed by Citibar to Red Pine. The purchase price also includes the granting to the vendors of a 2% net smelter royalty return on production at Wawa, of which 1.5% can be repurchased for $1.75 million.
The transaction was subject to a minimum of approximately $8.6 million in cash and a maximum ownership by the vendors and their affiliates of 9.99% of the outstanding shares of Red Pine.
Under the deal, Red Pine agreed to acquire all the outstanding shares of Wawa GP Inc., the general partner of Citabar, from 874253 Ontario Ltd. as well as the limited partnership interest in Citabar from the estate of Bernard Sherman, the sole limited partner of Citabar. Upon completion of the acquisition of Citabar, Red Pine said the consolidation of its ownership in the Wawa Gold project would be complete.
The 5,500-hectare Wawa Project hosts several former mines with combined historic production of 120,000 ounces of gold. The largest gold discovery on the property is the Surluga deposit.
Two mineral deposits (Surlaga and Minto Mine South) contain an estimated NI 43-101-compliant resource of 1.3 million tonnes of 5.47 g/t gold or 230,000 ounces in the Indicated category and 2.7 million tonnes at 5.39 g/t gold or 471,000 ounces Inferred. Over 95% of the contained ounces at both deposits are located between surface and a depth of 350 metres. Both deposits remain open at depth.
An estimated 15,000 metres of diamond drilling is planned in 2021 with the program continuing into 2022. “The focus of our 2021 exploration program will be to expand Surlaga at depth and test other targets,” said Red Pine President and CEO Quentin Yarie.
“We are very pleased to now be able to fully develop and realize the value as we grow 100% of the Wawa Gold Project for Red Pine shareholders,” he said.