MacDonald Mines Exploration has signed a binding letter of intent (LoI) to acquire Noble Mineral Exploration’s Holdsworth property nearly 25km north-east of Wawa, Ontario, Canada.
The Holdsworth property is situated within the land package that includes MacDonald’s Wawa-Holdsworth Project.
In December last year, both companies entered an option and joint venture agreement to conduct extensive exploration at the property. This LoI supersedes the earlier agreement.
MacDonald president and CEO Quentin Yarie said: "In the few months, our team has worked on the Holdsworth property, we’ve determined that there is a good potential for gold extraction there.
"We’ve already initiated a bulk sampling program of the oxides sands–the main gold target on the property.
"Securing 100% interest ensures that MacDonald can continue to aggressively advance the Wawa-Holdsworth Project and significantly increase shareholder value."
Under the LoI, MacDonald Mines will issue 5.5 million units of the company’s common shares as consideration.
Each unit will comprise one Class A common share and one non-transferable Class A common share purchase warrant exercisable at $0.30 per share for a three year period from the date of issuance.
Noble will be granted a 1.5% net smelter return royalty on the Holdsworth property. MacDonald will have the right to re-purchase one half of the NSR for $500,000 at any time.
The deal also includes payment of an equivalent of 5,000oz of gold equivalent to Noble after MacDonald has extracted, refined and sold a minimum of 50,000oz of gold from the oxide sands portion of the property.
Spanning 285ha, Wawa-Holdsworth property is around 20km from Wawa town. The property exhibits multiple gold showings with diversified mineralisation styles occurring in a 500m wide deformation corridor.
The property has access to power, rail and road.
Headquartered in Toronto, MacDonald Mines Exploration focuses on gold and silica exploration in Canada.