Tempus Resources Ltd (ASX:TMR) has successfully completed the due diligence for its acquisition of the high-grade, past-producing Blackdome-Elizabeth Gold Project in British Columbia, Canada.
Legal firm Gowling WLG and technical specialists SRK Consulting have assisted with detailed due diligence on the acquisition and letter of intent, which has provided sufficient confidence to proceed with the transaction.
Formal settlement of the transaction is expected later this week upon completion of closing deliverables and documentation requirements.
Tempus managing director Brendan Borg said: “We are very pleased to have successfully navigated the due diligence period for the acquisition of this exciting advanced stage high-grade project.
“We now look forward to rapidly advancing the project through further feasibility studies and targeting significant extensions to the existing resource base.”
Removal of requirement to complete a BFS for the project
A key item for consideration during the due diligence period was the requirements to allow transfer of the key Mineral Claims that cover the currently defined Elizabeth Deposit.
These claims had been under option by the current owner (and predecessors) since 2002, with a final court mandated requirement for completion of a bankable feasibity study (BFS) by the end of 2020.
During the due diligence period, Tempus consulted extensively with the original claim holders to negotiate an agreement to provide flexibility around this date for completion of a BFS, and has reached an agreement with the following key terms:
- Removal of requirement to complete a BFS for the project
- Tempus to issue the claim holders 1,000,000 TMR shares upon execution of the definitive agreement
- Completing an advance royalty payment due to be paid in cash on the claims in the amount of C$15,000 by December 31, 2019 (as per existing agreement)
- Making minimum expenditure of C$1 million on the claims before December 31, 2020
- Completing a buy-out of one percentage point of the Elizabeth Net Smelter Royalty by December 31, 2020 for C$500,000 in cash and C$500,000 in cash or ordinary shares of Tempus, at Tempus’ option
- Advance royalty payments to increase to C$30,000 by December 31, 2020 and to C$60,000 for each year thereafter until commercial production begins.
Next steps
Tempus will immediately initiate an update of the Mineral Resource estimate to incorporate a significant amount of new drilling that was completed in 2010 and 2011, but not yet included in the prior resource estimates.
Visible gold in 2010 drill core
Upon declaration of a resource estimate compliant with the JORC Code, Tempus will then commence a new pre-feasibility study for the project.
Concurrently, planning is continuing for a significant new phase of resource infill, expansion and exploration drilling, expected to commence in the second quarter of 2020.
These new phases of drilling will be complemented by additional project studies to support the completion of a pre-feasibility study, expected in Q4, 2020.