PolarX Ltd (ASX:PXX) (OTCMKTS:PXXXF) (FRA:PX0) has given formal notice to exercise its option to acquire a mine lease agreement over the highly prospective Humboldt Range Gold-Silver Project in Nevada, US, after completing extensive technical and legal due diligence.
Under the option exercise agreement, PolarX will pay US$175,000 in stages, issue 5 million shares to the vendor and pay the owner a 2.5% net smelter royalty (NSR) upon production with US$10,000 monthly advance royalty payments from September 2022.
Fieldwork is set to start next month at the project.
Acquisition terms
Completion of the acquisition is expected to occur on or before April 6, 2021, with the option exercise fee payable to the vendor on completion, comprising US$35,000 cash and the issue of 5 million fully paid ordinary PolarX shares, which will be escrowed for two years.
Following completion, the company will also be required to make the following additional payments to the vendor:
- US$70,000 on the first anniversary of the execution date of the option agreement; and
- US$70,000 on the second anniversary of the execution date of the option agreement.
The company will also assume the following obligations under the mine lease agreement with the owner:
- Payment of 2022 claim fees by September 1. 2021, as an advance against future production royalties;
- Monthly payment of US$10,000 from September 2022, as an advance against future production royalties; and
- Royalty on gold production of 2.5% NSR (3.75% NSR if mined grades are more than 15.6g/t gold).
Humboldt Range project
The Humboldt Range Project contains geology consistent with bonanza-style epithermal gold-silver mineralisation and bulk mineable epithermal gold-silver mineralisation, both of which are well known in Nevada.
The recently expanded project now comprises 272 lode mining claims in two claim groups: Black Canyon and Fourth of July, which are between two large-scale active mines: the Florida Canyon gold mine and the Rochester silver-gold mine.
The claims have been owned by the same family since the 1950s and only limited exploration has been reported.
Access to the project is straightforward via roads off the I-80 Interstate Highway, which lies less than 15 kilometres to the west of the claims.
Widespread narrow vein mineralisation with visible gold occurs within the claims and was mined via numerous adits and underground workings between 1865 and 1927.
Mineralisation occurs in swarms of high-grade epithermal quartz veins of varying thickness, either as isolated veins or as broad zones of sheeted/anastomosing veins within zones of intensely altered and mineralised host rocks.
PolarX will shortly begin an evaluation of the length and continuity of the vein sets to assess potential high-grade widths and tonnages, while evaluating whether the altered rock between the veins contains economically viable grades of gold and silver amenable to bulk mining.
Year-round news
When combined with the field season at PolarX’s Alaska Range project, the Humboldt acquisition means the company will have newsflow all year round, while leveraging its existing team and equipment in North America.