MacDonald Mines Exploration has signed agreements with Northern Sphere Mining and Currie Rose Resources to acquire a 100% interest in the leases comprising the Scadding Mine and additional mineral claims around the mine site, located east of Sudbury in Northern Ontario.
The agreements are effective from 24 April 2019.
MacDonald, based in Toronto, Ontario, is involved in gold exploration in Canada.
The company will acquire Northern Sphere’s 51% interest in the Scadding Mine and 100% interest in the surrounding claims.
For this purchase, MacDonald, upon satisfaction of certain conditions, will issue 10 million of the company’s common shares upon transfer of title; make a cash payment of $100,000; and incur $300,000 in eligible exploration expenditures in the 12-month period after acquisition of the mine.
MacDonald will also acquire Currie Rose’s 49% interest in the Scadding Mine.
After fulfilling certain conditions, the company will issue eight million of the company’s common shares; make cash payment of $50,000 on transfer of title; and incur $1.5m of eligible exploration expenditures on the leases partially covering the Scadding Mine over a three-year period.
Under the terms of the agreement, Currie Rose will retain a 3% net smelter return (NSR) on the property.
After achieving commercial production, MacDonald will pay Currie Rose $2,000,000 in exchange for a reduction of the NSR to 2.5%. An additional 1% of the NSR can be bought back for $1m.
Both agreements are subject to a standstill clause and voting requirements.
The acquisition is also subject to TSX Venture Exchange (TSX-V) approval and other customary closing conditions.
For this transaction, 514 Finance acted as an advisor to MacDonald, and subject to TSX-V approval, it will receive two million MacDonald common shares for its services.
Located in Scadding Township near the Wanapitei – Ashigami Lakes district, the Scadding Mine was initially operated by Northgate Exploration in the mid-80s and produced approximately 30,000 ounces from a non-compliant resource of 165,000 ounces.
However, Northgate ceased mining operations due to low gold prices.