Newrange Gold Corp. (TSX-V:NRG, OTCQB:NRGOF) has signed a definitive agreement to acquire a 100% interest in the past-producing, high-grade Argosy Gold Mine in the Red Lake Mining Division of northwestern Ontario.
The company said the mine is the most significant past-producer in the Birch-Uchi Greenstone Belt and produced 101,875 ounces of gold and 9,788 ounces of silver at a gold grade of 0.37 ounces per ton (oz/t) or 12.7 grams per ton (g/t).
It closed in 1952 due to high operating costs and a $35/oz gold price. Production came from only four veins, although 12 are now known, and only to a depth of 900 feet (270 meters). The property consists of 43 patented claims and 17 Mining Licences of Occupation comprising 604 hectares.
READ: Newrange Gold follow-up drilling discovers potential extension of historic Pamlico gold mine in Nevada
“The acquisition of a past-producing, high-grade mine in an area of active exploration presents a unique opportunity to increase shareholder value,” said Newrange CEO Robert Archer in a statement.
“The Argosy Mine has seen minimal exploration below the old mine workings and there is excellent potential to extend the mineralization to depth and to discover new veins elsewhere on the property. The Argosy Mine is approximately 10 kilometers northwest of the Springpole Deposit being advanced by First Mining Gold Corp. (TSX:FF, OTCQX:FFMGF, FRA:FMG) and less than a kilometer from our North Birch Project. We look forward to commencing the first exploration on the property since 2004.”
Meanwhile, Newrange said the agreement will entail the purchase of Cangold Limited (TSX-V:CLD), the owner of the mine and a fully-owned subsidiary of Great Panther Mining Limited.
Terms of the acquisition call for Newrange to make a cash payment of C$100,000 and issue C$650,000 in company shares to Great Panther on closing and a further C$250,000 in shares on the first anniversary of closing.
The closing date is expected to occur within 90 days. As there are already underlying net smelter return royalties totaling 2.5%, Great Panther will not retain an additional royalty. The agreement is subject to the approval of the TSX Venture Exchange.
Contact the author: patrick@proactiveinvestors.com
Follow him on Twitter @PatrickMGraham