Canadian development-stage mining company Troilus Gold has reached a deal to divest its non-core Mike Lake properties in Yukon, Canada, to Prospector Metals.

The sale is said to enable Troilus to focus on its flagship Troilus Gold Project in Quebec, while still retaining a significant interest in the Mike Lake Project’s future success.

As per the terms of the agreement that the two companies signed on 29 December 2023, Troilus will offload its 100% interest in the Mike Lake claims to Prospector Metals in lieu of a 19.9% stake in the latter.

Additionally, Troilus is set to receive a milestone payment contingent on the development of the project.

The milestone payment will also be made upon the announcement of a mineral resource on the property, with the amount depending on Prospector Metals’ market capitalisation at that time.

At deal closing, Prospector Metals will issue around 8.6 million common shares to Troilus at C$0.11 ($0.083) apiece.

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Currently, Troilus does not hold any shares in Prospector Metals, which are traded on the TSX Venture Exchange.

Troilus said that the securities are being acquired for investments reasons, and it “may, depending on the market and other conditions, increase or decrease its beneficial ownership of Prospector Metals’ securities, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and other available investment and business opportunities”.

Prospector Metals plans to initiate exploration activities at Mike Lake immediately after the transaction closes, building on historical data that indicates the presence of rich mineral deposits.

The exploration work, which was irregular from the mid-1970s to 2008, has shown promising signs of mineralisation.

In November 2022, Troilus agreed to sell a ‘significant’ exploration package of 1,824 claims in Québec, Canada, to Sayona Mining unit Sayona Quebec.

Sayona Quebec agreed to invest C$10m in Troilus and acquire a 100% stake in Troilus’ claims, spanning 985km², by offering C$40m in Sayona shares to Troilus.