Canadian gold exploration company Nighthawk Gold has signed a binding option agreement to acquire the Kim & Cass Property in Canada from Geomark Exploration, a subsidiary of Pine Cliff Energy.

The Kim & Cass Property is located immediately adjacent to Nighthawk Gold’s Indin Lake Gold Property.

Under the terms of the agreement, Nighthawk Gold will pay C$1.1m ($0.87m) and grant the latter a 2.5% net smelter return (NSR) royalty to Geomark Exploration

Nighthawk Gold will have the right to buy up to 100% of the NSR of Geomark for up to C$2.5m ($1.97m).

Nighthawk Gold said that the acquisition gives four contiguous mining leases spanning 31km2 that hold the historic Kim and Cass zones.

The Kim & Cass Property also gives Nighthawk Gold contiguity to the main claim group with the Albatross claim block.

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Nighthawk Gold president and CEO Keyvan Salehi said: “We are encouraged by the high-grade nature encountered by historic drilling at both Kim and Cass, especially given that drilling was constrained mainly within 75 metres of surface, leaving significant room for expansion at depth.

“The zones are immediately east of our Albatross target which has returned surface values of up to 20.6 g/t Au over a 4km strike length. Together, they represent quality targets that fit our immediate strategy of looking for near-surface, higher-grade opportunities proximal to Colomac.”

Nighthawk Gold expects the Kim and Cass zones, together with the Albatross trend, to improve the chances of identifying near-surface mineralisation within 15km of the Colomac Main Deposit.

The company had originally optioned the Kim & Cass Property in December 2013, and in 2014.

However, the company could not pursue the acquisition of the property due to limited capital resources.