Trident Royalties PLC (AIM:TRR, FRA:5KV) has entered into a binding agreement with Seduli Sutter Operations Corporation to acquire a net smelter return royalty over production from the Lincoln gold mine in California.
The price is US$2.5mln in cash.
Seduli intends to utilise the royalty sale proceeds to finalise the restart of production at the Lincoln underground gold mine.
The plan is to restart production at a rate of 220 tonnes per day this year, amounting to an annualised 20,000 ounces of gold.
The project is also permitted for Stage 2 production of up to 1,000 tonnes-per-day or 80,000-plus ounces per year. Subject to funding this increase should immediately follow the successful completion of Stage 1.
Lincoln is a high-grade gold deposit with an existing NI 43-101 resource of over 286,000 gold ounces at an average grade of 9.3 grams per metric tonne. It is situated at the centre of the California “Mother Lode”, which has historically accounted for millions of ounces of production.
"The Lincoln gold mine represents a highly compelling investment opportunity for Trident, and we are delighted to be supporting Seduli as it restarts mining and gold production in the coming months,” said chief executive Adam Davidson.
“The Mother Lode is a mineralised zone of international fame and the discovery of an orebody with an average grade of 9.3g/t, which has not been drilled beyond 150 metres, offers exceptional upside once in production. With this in mind, we believe that Lincoln will reveal gold ounces orders of magnitude larger than the existing NI 43-101 mineral resource estimate, subject to the required exploration work and technical studies."