Prospector Metals Corp. (TSX-V:PPP, OTCQX:ETHOF) told investors it has entered a property option agreement with Storm Exploration Inc. under which Storm can earn up to 100% in its Toogood Gold Project in return for staged cash and share payments and by completing up to $3.5 million in exploration expenditures over a three-year period.
The Toogood Project lies at the northeast extent of the Exploits Subzone (Dunnage Zone) of Central Newfoundland and is underlain mostly by the Ordovician Dunnage Melange and the Badger Belt. The claims cover an area of 118 square kilometres (km) and a strike length of over 28 km located on New World Island, approximately 65 km north of Gander, Newfoundland.
Under the agreement, Storm can earn an initial 55% interest in the project in return for staged cash and share payments to Prospector and $1.5 million of work commitments in the first 18 months, with a further $1.75 million of work commitments within 36 months of signing, and an additional $250,000 should certain additional license be acquired, for a total of up to $3.5 million over 36 months.
The share and cash payments to Prospector to exercise the first option include $10,000 in cash within 90 days of the execution of the option agreement and four million shares in four tranches starting from the receipt of TSX-V acceptance up to the third anniversary of the effective date of the transaction.
To exercise the second option and earn 100% of the project, Storm needs to issue 19.9% of its shares, or $12 million in shares, whichever is less, to Prospector.
Prospector Metals is a Discovery Group company focused on district-scale, early-stage exploration of gold and base metal prospects and creating shareholder value through new discoveries.
The company's focus is to identify underexplored or overlooked mineral districts that display important structural and mineralogical similarities with well-endowed mining camps.
Contact the author at stephen.gunnion@proactiveinvestors.com