Doré Copper Mining Corp. (TSX-V:DCMC, OTCQX:DRCMF) said it has agreed to amend the earn-in option agreement between itself and Ressources Jessie Inc to acquire the Joe Mann property in Quebec.
According to the terms of the amending agreement, Doré Copper said it has agreed to accelerate the final scheduled cash and share payments under the option agreement.
The Joe Mann mine, located 60 kilometres south of Chibougamau, Quebec, produced 1.12 million ounces of gold at an average grade of 8.26 grams per tonne (g/t) from the 1950s to 2007. The deposit has an inferred resource of 680,000 tonnes grading 6.78 g/t gold and 0.24% copper, which the company said was included in the preliminary economic assessment (PEA) of its hub-and-spoke operation announced on May 10, 2022.
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The agreement took place on October 28, 2022, and was previously announced last January.
The Toronto-based company has made the final scheduled cash payment of C$1.5 million to Ressources Jessie, fulfilling the scheduled cash payment obligations, and will issue 3.3 million common shares in the capital of the company to Legault Metals Inc at a deemed price of $0.30 per common share for an aggregate value of $1 million upon acceptance of the TSX Venture Exchange, which fulfills all scheduled share payment obligations.
The deadline for Doré Copper to incur the remaining exploration expenditures on the property, totaling approximately $830,000, has been extended to February 28, 2023.
Following the scheduled cash and share payment obligations, Ressources Jessie will start the transfer of the property to Doré Copper.
Upon exercise of the option, the company said it is required to grant Ressources Jessie a 2% net smelter return (NSR) royalty on the mine production from the property. The company will be entitled to buy back 1% NSR in consideration for a payment to Ressources Jessie of $2 million and to buy back an additional 0.5% NSR in consideration for a payment to Ressources Jessie of $4 million.
According to the original terms of the option agreement, upon the commencement of commercial production at Joe Mann property, Doré Copper will make an additional $1 million cash payment to Ressources Jessie and issue $1.5 million in common shares to Legault.
The company said it is currently drilling a hole on the eastern side of the Joe Mann mine, below the deepest mined level, to test the down-plunge extension of a historical underground hole that returned 9.33 g/t gold over 2.4 meters. In early 2023, the company said it plans to test a geophysical anomaly located approximately 500 metres south of the mine.
Contact the author at susie@proactiveinvestors.com