American Eagle Gold Corp (CVE:AE) said it has completed a purchase agreement for the Garden Gate Pass property in the Cortez mining district of Nevada.
The company has agreed to exchange an initial cash payment of $50,000 as well as 200,000 common shares of American Eagle and make advanced royalty payments starting at $15,000, paid every six months to Pyramid Lake for the property.
Pyramid Lake will also be granted a 3% net smelter return royalty on the project, with American Eagle retaining the right to buy 1.5% at the time of a production decision for $1 million.
READ: American Eagle Gold outlines exploration plans at Golden Trend project ahead of scout drilling in third or fourth quarter
The Garden Gate property is a contiguous expansion of American Eagle Gold’s flagship Golden Trend property and more than triples its land package from 2,225 acres to 7,574 acres.
Located immediately south of Barrick Gold (TSE:ABX) (NYSE:GOLD) and Newmont's (TSE:NGT) (NYSE:NEM) Cortez joint venture, the combined property will now be referred to as the Golden Gate project. The precious metals explorer said the acquisition of Garden Gate significantly increases the search space, covering the entire southern end of the Cortez trend window.
"We have been targeting the acquisition of the Garden Gate for some time as it transforms American Eagle Gold into a Nevada district play within the Cortez Trend,” Anthony Moreau, CEO of American Eagle Gold said in a statement.
He continued: “The Cortez Trend already hosts three tier 1 deposits, yet its exploration potential is still abundant. Golden Gate now covers over thirty square kilometers of this highly prospective area of the Cortez Trend. Our VP of Exploration, Mark Bradley led the discovery team at Barrick's Goldrush, which is adjacent to Golden Trend, so there is nobody better suited to lead our team to a discovery."
A drill program is scheduled for the enlarged property in September 2021. The drill budget will also be increased to provide scout drilling over the entire land package.
Final closing of the acquisition is subject to the necessary approval of the TSX Venture Exchange.
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