American Eagle Gold Corp (TSX-V:AE) revealed that it has struck an agreement to acquire a 100% interest in the Nakinilerak property (NAK) in the Babine copper district of British Columbia.
Toronto-based American Eagle Gold said NAK is a copper-gold porphyry exploration target in the Stikine Island Arc Terrane, which hosts many copper-gold porphyry deposits. NAK's known copper-gold porphyry mineralization is open at depth and is defined by a compelling geophysical signature analogous to Newcrest Mining’s Red Chris Mine and Newmont's Tatogga project located in Northwest British Columbia.
NAK's historic drill and exploration database have been digitized along with a reinterpretation of the geophysical and geochemical data to delineate targets for American Eagle's drill program in 2022.
READ: American Eagle Gold says drilling has begun at its flagship Golden Gate property
“During the due diligence process, American Eagle Gold's team uncovered what appears to be a classic geophysical signature for a large underground copper/gold porphyry system,” said the company.
Terms of the deal
American Eagle noted that the total purchase price payable to the vendor for the property will include the assumption of all the obligations of the vendor and the issuance to the vendor of two million shares of American Eagle Gold.
In addition, the company said it will include the “transfer of two million shares of Orefinders Resources Inc (TSX-V:ORX). as currently held by American Eagle Gold.” It will also include an 1% Net Smelter Return (NSR) with an option by American Eagle Gold to buy back 0.5% for $1 million.
American Eagle noted that the vendor is currently earning a 100% interest in the property under the terms of the Option Agreement, which calls for cash payments, in tranches, totaling $450,000 over three years and $1 million in work obligations over three years to earn 100%, subject to a 2% NSR royalty to the Vendor which can be bought down to 1% by paying $1.5 million.
“The owner has the right to receive shares of the company in lieu of the tranches totaling $450,000 in cash payments, provided that the value of such shares, at the respective time of issue of the tranche, cannot exceed an aggregate of $375,000 for the initial $300,000 in tranches, based on a 10-day volume-weighted price calculation prior to the issue of the tranche,” said the company.
NAK has had over $9 million of exploration work, including 18,000m of drilling. Most of the historical drill holes have been shallow, averaging less than 169 meters, which defined an extensive zone of near-surface, low-grade copper/gold mineralization, with the possibility of higher grades occurring at depth.
"The acquisition of NAK was data-driven and supported by the risk-reward proposition to drill test a new geophysical feature within a well understood geologic environment,” American Eagle Gold CEO Anthony Moreau said in a statement.
“Our plan with Golden Gate has not changed, and its drill program is underway, however with the addition of NAK, American Eagle adds exposure to a copper and gold property in Canada," he added.
American Eagle is focused on exploring a world-class gold deposit on its flagship property, Golden Trend, an asset strategically located in Cortez, Nevada.
The company’s 2,286-acre (925 hectares) Golden Trend property is located on the Cortez Trend, next door to Barrick Gold and Newmont Mining’s Gold Rush and Cortez Mine, which host over 27 million ounces of gold.
Investors can read a company presentation on the NAK acquisition here.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive