Kenorland Minerals Ltd (TSX-V:KLD) told investors it has entered into a property option agreement with a wholly-owned subsidiary of Centerra Gold Inc under which it has agreed to grant to Centerra the option to acquire up to a 70% interest in its Hunter property.
The Vancouver-based mineral exploration company acquired the Hunter Project, located within the southern Abitibi Greenstone Belt, in Quebec, in 2019 through map staking after completing a comprehensive compilation and review of historical exploration data covering the project area. The property covers 18,177 hectares of mineral tenure over a felsic volcanic complex within the southern Abitibi Greenstone Belt.
"We're looking forward to working with Centerra on the Hunter Project and to kick-off another large-scale systematic greenfields exploration initiative in the Abitibi Greenstone Belt,” Kenorland CEO Zach Flood said in a statement. “We believe this prospective region is generally under-explored due to the extensive glacial cover masking the bedrock geology and we look forward to advancing the project towards discovery with our newest partner."
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Under the option agreement, Kenorland said Centerra can earn an initial 51% interest in the Hunter Project by incurring an aggregate of $5 million in mineral exploration expenditures on or before the fourth anniversary of the agreement.
Centerra can earn an additional 19% interest by completing a technical report in respect of the Project that establishes a mineral resource of at least one million ounces of gold equivalent (AuEq) prepared in accordance with the requirements of National Instrument 43-101 of the Canadian Securities Administrators on or before the fourth anniversary of the exercise of the first option, provided that it must provide notice of its intent to exercise the second option within 90 days of the exercise of the first option.
Following the earning of a 70% interest, Kenorland said the two companies will form a joint venture in respect of the project. In the event a joint venture participant's interest is diluted to below 10%, it will exchange its joint venture interest for a net smelter returns royalty of 2% on currently unencumbered claims and 1.5% on claims currently encumbered by an existing royalty.
Kenorland's focus is early to advanced-stage exploration in North America. It currently holds three projects in Quebec where work is being completed under joint venture and earn-in agreement from third parties.
Contact the author at stephen.gunnion@proactiveinvestors.com