Evergold Corp (TSX-V:EVER, OTC:EVGUF) said it has entered into an option agreement with non-arms-length vendors Charles Greig and Alex Walcott to option the drill-ready DEM gold-silver property located northwest of Fort St. James in central British Columbia.
The company said a NI 43-101 compliant technical report is underway for the DEM property, expected to be delivered in mid-August prior to the closing of the option agreement.
It highlighted that the property hosts the never-drilled DEM prospect, a 42-square-kilometre target area which has demonstrated strong multi-element geochemical anomalism in soils.
This includes highs of 2.1 parts per million gold, 160 parts per million silver, 0.5% lead, 0.41% zinc, 0.76% arsenic, and 651 parts per million copper, which Evergold said was directly associated with an underlying large-scale donut-shaped magnetic anomaly and exceptionally strong, deep-running IP chargeability, suggesting high discovery potential.
The company said it expects to receive a five-year multi-year, area-based (MYAB) exploration permit to allow up to 50 drill sites for the DEM prospect in the near future.
Evergold intends to initially drill the coincident, very high-order IP chargeability and magnetic anomalies underlying the strong soil geochemical values, the details of which will be laid out in the pending NI 43-101 technical report.
“Our goal with the acquisition of the DEM property has been to add to our portfolio a strong untested new exploration prospect with good access, offering the potential for high payoff at relatively low cost,” Evergold CEO Kevin Keough said in a statement.
“In the past year, we have seen the market respond to new discoveries, and the DEM Property has all the positive geological, geochemical and geophysical attributes that we look for when searching for one. We are therefore happy to have secured DEM on reasonable terms, and are looking forward to getting it drilled at the earliest possible juncture.”
Option agreement terms
Evergold said it has a right to earn a 100% ownership interest in the DEM property in exchange for staged cash payments to the optionors of $980,000 over four years.
In addition, the company must carry out escalating work commitments totalling $5 million over the same time frame.
The optionors will retain a 2% net smelter returns royalty, with Evergold able to buy back 1.5% of the royalty for $4.5 million.
The agreement relies upon the completion of a $750,000 round of financing by Evergold involving the optionors on terms to be announced in the future.
Evergold is a TSX-V-listed gold-silver exploration company with projects in British Columbia and Nevada.
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