Gold Terra Resource Corp (TSX-V:YGT, OTCQX:YGTFF) announced it has extended its option agreement with Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, ETR:NMM) subsidiaries to purchase the Con Mine, a historically significant gold-producing asset in the Yellowknife Gold Belt.
The revised agreement gives Gold Terra an additional two years, for a total of six years, to meet the necessary conditions for the purchase of Miramar Northern Mining Ltd. (MNML), which owns 100% of the Con Mine’s assets.
The extension of the option agreement allows Gold Terra to continue with its current drilling program designed to delineate more than 1.5 million ounces, CEO Gerald Panneton told investors, noting high-grade ounces along the prolific Campbell Shear structure below and around the existing mine workings.
"We are pleased with our continued excellent relationship with Newmont who is also a shareholder of the company,” Panneton added.
Gold Terra has invested approximately C$10.9 million in exploration efforts since 2021, including 31,947 meters of drilling by the end of 2023.
The company has already identified 109,000 ounces of indicated gold at 7.55 g/t and 432,000 ounces of inferred gold at 6.74 g/t in the Yellorex area, south of the mine. A further 3,000 meters of drilling in 2024 will focus on the Campbell Shear’s down-plunge.
Under the extended agreement, Gold Terra must spend a minimum of C$8 million on exploration and complete a pre-feasibility study demonstrating a minimum of 1.5 million ounces of gold in all resource categories. The company must also obtain regulatory approvals and post a cash bond for the Con Mine reclamation plan. Upon exercising the option, Gold Terra will pay Newmont C$8 million in cash.
Newmont retains a 2% net smelter return royalty on minerals produced from the property, which can be reduced to 1% for an additional C$10 million payment. Newmont also has a two-year back-in right for a 51% stake in the project if Gold Terra identifies at least five million ounces of measured and indicated gold.
The Con Mine produced over 6.1 million ounces of gold from high-grade deposits before its closure in 2003. Gold Terra plans to leverage existing infrastructure, including shafts and a water treatment facility, for future exploration and potential development.
The company's deep drilling program aims to expand the resource estimate in the Campbell Shear, historically a rich source of gold at the Con Mine.