Pacton Gold signs option agreement to acquire mineral assets in Red Lake mining district
Pacton Gold has signed an option agreement with Frontline Gold to acquire a 100% interest in three mineral property groups (the property) in the Red Lake mining district of north-western Ontario, Canada.
The proposed acquisition contains 34 mineral claims and two mineral patents, totalling 274 claims units spread over a total area of around 4,420ha.
According to the company, the area hosts some of the richest gold deposits in the world, producing in excess of 25 million ounces of gold from high-grade zones.
The agreement also allows Pacton Gold to access the geological history and database in the area.
Pacton Gold president and CEO Dominic Verdejo said: “We are pleased to have secured a strategic land package proximal or immediately adjacent to multiple operating gold mines and gold deposits in the prolific Red Lake Gold District in north-western Ontario.
“The land package significantly elevates our gold property portfolio and positions Pacton as a key exploration player in the Red Lake Gold Camp.”
Under the deal, the company will have to issue 4.2 million common shares and make a payment of $0.3m over a three-year period in order to earn a 100% interest in the area.
The area comprising the three mineral claims is subject to multiple underlying royalties, which include net smelter returns royalties to be paid to Frontline, ranging from 0.25% to 2.25% on all the mineral claims and mineral patents.
Pacton Gold can repurchase up to half of Frontline’s royalties by payment of $0.25m for each 0.25% of royalty held by Frontline.
Completion of the transaction is subject to approval from the TSX Venture Exchange.
The property contains three assets including the Baird/Heyson mineral claims, the Chukuni mineral claims, and the Whitehorse Island patents.
Image: High grade gold ore from Red Lake Mine. Photo: courtesy of James St John via Wikipedia.