O3 Mining Inc (TSX-V:OIII, OTCQX:OIIIF) said it has signed a binding letter agreement with Emgold Mining Corporation (TSX-V:EMR) to acquire 100% of the rights, title, and interests in Emgold's East-West property.
The East-West property is located in the Val-d'Or Mining Camp in Quebec, adjacent to and east of the company's Marban Property, and consists of seven mining claims covering an area of 184 hectares.
Pursuant to the letter agreement, O3 Mining said it has agreed to acquire the East-West property at closing in exchange for cash consideration of C$750,000, 325,000 common shares, and the grant of a 1% net smelter returns royalty over the property in favour of Emgold, which will be subject to a buy-back right in favour of O3 Mining (Buy-Back Right).
READ: O3 Mining says latest resource update for Marban project in Quebec augurs well for upcoming pre-feasibility
The Buy-Back Right may be exercised by the company until the fifth anniversary from the closing date for a cash payment of C$500,000 until the third anniversary from the closing date and C$1 million until the fifth anniversary from the closing date.
The transaction is subject to the satisfactory completion by O3 Mining of its due diligence review of Emgold and the East-West Property, the receipt of any necessary regulatory (including stock exchange) approvals, and the execution of the definitive agreements in respect of the transaction, which is expected to occur no later than March 31, 2022.
"We are excited about the acquisition of the East-West Property as it presented the opportunity to secure prospective ground near the Marban Engineering project and consolidate O3 Mining's position in the district,” said O3 Mining CEO Jose Vizquerra Benavides in a statement.
“Additionally, the boundary of the property is 200 metres from the Marban PEA pit edge. We look forward to finalizing the agreement and amplifying our brownfield exploration program as it holds the potential for new discoveries to expand the gold mineralization around Marban Engineering and to create significant value for our shareholders."
The East-West property covers the auriferous Marbenite structural corridor over a 1.6-kilometer strike length. It contains the Little Long Lac mineral occurrence where 25,000 tonnes at 8 grams per ton (g/t) gold (Au) were extracted during the 1960s and the East zone where drilling intersected 3.6 g/t Au over 16.1 meters (m) and 5,495 g/t Au over 2.25m, among others. The exploration potential is considered promising as the structure is untested below 250m.
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