American Eagle Gold Corp (TSX-V:AE) is poised to advance its flagship NAK copper-gold porphyry project in British Columbia (BC), announcing an option and call option with explorer Orefinders Resources concerning a 20% stake in the asset.
Under the option, Orefinders must spend C$1 million on exploration at the property before the end of this year to acquire the 20% interest.
Meanwhile, under the terms of the call option, Orefinders will sell to American Eagle the 20% interest for a C$1.5 million purchase price, if it (American Eagle) gives notice to exercise the deal any time after February 28 next year but before April 30, 2024.
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The NAK project sits in the Babine Copper-Gold Porphyry district of BC and is a classic porphyry target that shows all the signs of a large copper-gold system. Copper-gold porphyry mineralization is open in all directions.
The C$1 million in exploration work obligations, noted above, will be incurred mainly through third party-contractors primarily for drilling, drill related work, geophysics, reports and sampling, said American Eagle.
The 20% stake is also subject to two separate net smelter royalties (NSR). A 2% NSR is payable to Bernard Kreft, which American Eagle has the right to buy back 50% of for C$1.5 million
The interest in the project is also subject to a 1% NSR, payable to 1302580 B.C. LTD, which American Eagle has the right to buy back half of for C$1 million.
The exercise of the call option and the completion of the transfer of the 20% interest from Orefinders to American Eagle at the closing date shall be subject to the prior approval of the Exchange, the company noted.
Contact the author at giles@proactiveinvestors.com