Solstice Gold Corp. [SGC-TSXV] shares rallied sharply Wednesday after the company said it has executed a $3.9 million deal to acquire a portfolio of royalty and property interests in 86 projects located in Ontario and Quebec.
Solstice is buying the properties from a group of vendors that includes Perry English, an award-winning Canadian prospector who has been extensively involved in Ontario’s mineral exploration industry for 35 years.
Named Ontario Prospector Association’s (OPA) prospector of the year in 2007, English sold a portfolio of 90 mineral properties to Rubicon Minerals Ltd. in 2003, which form a significant portion of the landholdings of Evolution Mining Ltd. [EVN-ASX] in Red Lake. In 2013, he vended claims to Great Bear Resources Ltd. [GBR-TSXV], which currently form part of its Dixie Lake gold discovery holdings.
The sale will be consummated through English’s private company 1544230 Ontario Inc., along with his business partner Gravel Ridge Resources Ltd. and its principles for a $3.8 million in cash and 400,000 shares of Solstice.
Gravel Ridge is led by President Mike Frymire and vice-president Katie Misener. Both have been involved in multiple gold discoveries in Quebec and Ontario.
According to a press release containing details of the transaction, $235,000 in cash has already been paid as a deposit to the vendors.
Completion of the financing of the acquisition is subject to Solstice raising at least $2 million in a concurrent financing for the funding of the balance of the purchase for the portfolio.
The company said it is proposing to raise up to $2.5 million via a non-brokered private placement of up to 25 million common shares at 10 cents per share. It is expected that one of more of the directors of the company will participate in the transaction. It would therefore constitute a related party transaction.
On Wednesday, Solstice shares rose 25% or $0.03 to 15 cents. The shares are currently trading in a 52-week range of 16 cents and $0.055.
The 86 projects that Solstice is planning to acquire include 45 that are currently under option to third parties, of which 42 include a provision for net smelter return royalty interests (subject to the exercise of options), as well as 10 stand alone NSR royalty interests,
Transaction highlights include 30 additional 100%-owned properties that are available for option or sale.
The deal includes a buyout of the company’s RLX (Red Lake Extension) project including NSR royalty. Solstice is currently carrying out expanded surveys at RLX, a move it said will lead to drill targeting in the latter part of 2021.
As a result of the transaction, RLX will become 100%-owned and royalty free.
Prior to announcing the property deal, Solstice is a gold-focused exploration company engaged in exploration on projects in the Red Lake, Ontario mining district and in Nunavut.