Troilus Gold Corp (TSX:TLG, OTCQX:CHXMF) announced that it is selling the Mike Lake (ML) properties to Prospector Metals Corp. (TSX-V:PPP, OTCQX:ETHOF) to streamline its portfolio allowing it to focus on its flagship Troilus gold project in Quebec, Canada.
The ML project is located in the Tintina Gold Belt, approximately 80 kilometres from Dawson City, Yukon Territory.
Prospector will acquire a 100% interest in the project through a shares-only purchase agreement which will result in Troilus becoming a keystone shareholder in Prospector.
It is expected Troilus will own 19.9% of Prospector’s shares upon the closing of the transaction, allowing the company to maintain a stake in the potential success of the project under Prospector’s leadership.
Troilus will also be granted a Participation Right to maintain its ownership interest should Prospector propose selling additional securities provided Troilus maintains a 5% stake in Prospector. It will also have the right to nominate a person to Prospector’s board of directors.
Prospector will provide Troilus will a milestone payment within 30 days of the completion of a mineral resource estimate for the ML project, payable in cash or shares. The milestone payment will be $1 million if Prospector’s market capitalization is less than $20 million, or $2 million if Prospector’s market capitalization exceeds $20 million.
The transaction is subject to Prospector completing a concurrent financing round for proceeds of no less than $1 million.
Troilus CEO Justin Reid said Prospector CEO Dr. Rob Carpenter and his team were perfectly suited to unlock the potential of these prospective claims.
“Outstanding recent discoveries such as Snowline Gold’s Rogue Project and Victoria Gold’s Eagle Mine, the largest gold mine in Yukon’s history, are located on trend with Mike Lake and underscore the excellent potential in this district,” Reid said.
“As a large shareholder in Prospector Metals, Troilus and its shareholders will benefit from their expertise in this region and the advancements and future milestones achieved at the project.”
Carpenter said the ML project was an “exceptional opportunity” for multiple reasons.
“Firstly, it's rare to have a property host so many high-grade, undrilled surface occurrences within such a fertile environment,” Carpenter said.
“Secondly, our knowledge base of gold deposits in Yukon has grown so much since the last time the ML property was worked in 2008. Large deposits like Golden Saddle, Coffee and Snowline were discovered after 2008 and our technical team is eager to view the ML property through a more modern exploration lens."
Troilus Gold is a feasibility-stage Canadian mining company focused on the systematic advancement and de-risking of the former gold and copper Troilus Mine towards production.