Anaconda Mining has created a new wholly owned subsidiary to focus on early stage gold exploration projects within Atlantic Canada.
Known as ExploreCo, the new entity will be used to advance Anaconda’s projects in the region, including the Great Northern project.
Anaconda is also optioning its Cape Spencer early stage exploration gold project, located east of the city of Saint John, New Brunswick.
Under the option agreement, ExploreCo will earn a 100% interest in the Cape Spencer project in return for an aggregate cash payment of $300,000 and $145,000 in cash or equivalent value shares to the vendor over five years.
The agreement also requires ExploreCo to invest a total amount of $400,000 towards exploration costs on Cape Spencer within the first four years.
In addition, the vendor will have a 2% Net Smelter Return Royalty (NSR) over production from the project.
The transaction is conditional on receipt of certain regulatory approvals, including the Toronto Stock Exchange.
ExploreCo can repurchase 1% of the NSR by paying $1m with a right of first refusal on the remaining 1% NSR.
Anaconda Mining president and CEO Dustin Angelo said: “There is an opportunity to capitalise on the resurgence in early stage, Atlantic Canada gold-exploration properties and we have assets that we believe have the potential to generate significant value.
“We feel that the Great Northern Project and the recently optioned Cape Spencer Gold Property have the potential to be cornerstone assets in our new venture, and the new wholly owned subsidiary will enable the focus and priority required to generate value.
“Our goal is to create a company with a clear mandate to explore for and build significant district-scale Mineral Resources.”
The company is contemplating various options, including a spin out of ExploreCo to establish it as a publicly traded company.
Cape Spencer comprises 106 claims covering more than 2,350ha and 8km of exploration potential with ten known gold occurrences.
Historic production at the project stands at 194,224t, producing 4,832oz at around 50% recovery through heap leach.