Chalice Gold Mines Limited has entered a binding option and farm-in term deal to acquire a 70% interest in the Chimo Gold Project from Richmont Mines.
This move will help consolidate Chalice's position in the Abitibi gold province in Quebec, Canada.
Chalice can earn the majority stake in this project by making a payment of C$200,000 ($148,000) to Richmont and financing the exploration expenditures of C$3.1m over a period of four years.
Upon meeting these requirements and exercising the option, Chalice will then grant a 1% net smelter royalty (NSR) to Richmont on claims with no pre-existing royalties.
Chalice also has the right to withdraw from the project any time without earning any interest.
After completing all stated obligations, the agreement is subject to usual joint venture terms.
The Chimo Gold Project gives Chalice a significant contiguous land position along the Larder Lake-Cadillac fault, and a strategic foothold in a prolific gold endowment trend in Canada, which is furthered by the company’s recently secured Nordeau Gold Project and adjacent claims.
Canada's Abitibi region is known to host multi-million ounce gold deposits that are preferentially sited on well-defined structural breaks.
The Chimo Gold Project is located 35km east of Val d’Or. It includes nearly 2,593ha of claims in two main blocks.
Chimo mine and Nordeau West and Nordeau East deposits were discovered during exploration performed in the 1940s.
The company will conduct a review of historical exploration results and merge the data with its Nordeau Gold Project. It will help in taking an integrated approach to explore the region where no scientific analysis and geological mapping has been performed done in decades.
Chalice managing director Tim Goyder said: “The Abitibi is one of the world’s most prolific and well known gold provinces, host to numerous world-class deposits.
“Chalice has now been able to assemble what amounts to a significant strategic position covering a contiguous 16km strike length of the major regional fault system that controls a majority of the known gold mineralisation in this region.
“By consolidating the Chimo and Nordeau projects, for the first time in decades, we will be able to apply a coordinated and systematic approach to exploration, bringing the latest techniques and methodologies to what is an under-explored area of the Larder Lake-Cadillac Fault.”
“We look forward to commencing an immediate review of the project in anticipation of defining targets for drill testing as soon as possible.”
Image: Location map of Chimo Gold Project in the Abitibi sub-province of Canada. Photo: courtesy of Chalicegold.com.