MAS Gold said it has signed a non-binding letter of intent with Comstock Metals to acquire 100% of its interest in its Preview SW gold deposit and property in return for 30 million MAS Gold common shares.
The company said Comstock's 843-hectare Preview SW Property was contiguous with its Preview North Property in the La Ronge Gold Belt of northeastern Saskatchewan. The Preview SW Property and portions of the Preview-North properties are located within the Mineral Exploration Zone of Lac La Ronge Provincial Park, it added.
“Upon completion of the proposed transaction this high-quality asset combined with MAS Gold's mineral portfolio, which includes the recently updated North Lake and Greywacke North mineral resources announced December 6, 2021, and December 9, 2021, respectively, MAS Gold will become one of Saskatchewan's biggest gold developers,” MAS Gold president and CEO Jim Engdahl said in a statement.
READ: MAS Gold updates Mineral Resource estimate for North Lake gold deposit in Saskatchewan
"Under the terms of the proposed transaction, Steven Goldman, the president and CEO of Comstock will join the MAS Gold. We look forward to working with him,” he added.
MAS Gold noted that the Preview SW Property's gold deposit hosts historical resources, at a 0.50 gram/tonne gold (g/t Au) cut-off grade:
- An historical Indicated Mineral Resource containing 158,300 ounces of gold (2.61 million tonnes grading 1.89 g/t Au); and
- An historical Inferred Mineral Resource containing 270,800 ounces of gold (5.70 million tonnes grading 1.48 g/t Au).
Upon the closing of the deal, it said Comstock will have the right to appoint one director for a minimum of two years.
Comstock will also provide additional funding of $200,000, to be spent in the first quarter of 2022 in conjunction with input from MAS Gold, exploring its Preview SW Property prior to closing of the transaction.
"On behalf of Comstock, I believe the Proposed Transaction will be highly advantageous and synergistic for both Comstock's and MAS Gold's shareholders,” Goldman said.
“We are delighted to have the opportunity to pass Comstock's Preview SW gold project to MAS Gold where we believe the combination of gold resources, MAS Gold's experienced management team, and technical mining talent, will quickly accelerate the creation of a significant gold deposit in the La Ronge Gold Belt. Ultimately we believe that the proposed transaction will help create significant shareholder value in the years to come for both Comstock's and MAS Gold's shareholders.”
A definitive agreement is expected to be signed before January 15, 2022, and closing is anticipated in March 2022 after both companies' annual general meetings and shareholder votes, anticipated to take place in late February 2022, MAS Gold said.
MAS Gold is focused on exploration projects in Saskatchewan along the La Ronge Greenstone Belt. Its road-accessible projects are located about 60 kilometres (km) west of producing Seabee and Santoy gold mines operated by SSR Mining Inc.
In the La Ronge belt, MAS Gold has four properties totaling 33,843 hectares (83,628 acres). These are the Greywacke Lake, Preview North, Elizabeth Lake and Henry Lake properties, which extend along around 60 km.
Contact the author at stephen.gunnion@proactiveinvestors.com