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TORONTO (miningweekly.com) – Australian gold explorer Chalice Gold Mines on Wednesday reported that it had acquired the Dubenski gold deposit, in Ontario, for C$700 000 after successfully renegotiating an existing option agreement.
The TSX- and ASX-listed company said the acquisition gave it a 100% interest in the deposit, located within 10 km of the advanced Cameron gold project, which it acquired from Coventry Resources in February.
The previous option agreement with the vendor included an exercise price of C$3.5-million, exercisable by April 30, 2017, and a 2.5% net smelter royalty.
Under the terms of the renegotiated option agreement, after producing the first 70 000 oz of gold from the project, Chalice would also pay the vendor an additional $13/oz when the gold spot price was equal to or less than $1 500/oz and $1 600/oz when the price moves higher.
The Dubenski deposit contains a compliant indicated resource of 806 000 t, grading 2.28 g/t for 59 000 oz, and an inferred resource of 392 000 t, grading 1.44 g/t for 18 200 oz at a cutoff grade of 1 g/t to a depth of 150 m below surface.
Dubenski is located on Chalice's West Cedartree project, less than 10 km to the west of the Cameron deposit and provides an important additional potentially openpittable source of material to the existing resources at the Cameron project.
The Cameron gold deposit has measured and indicated resources of 567 000 oz at 2.45 g/t and an inferred resource of 829 000 oz at 2.11 g/t. A preliminary economic assessment determined a mine could produce 61 000 oz/y at an average cash cost of $852/oz over ten years. The project has an estimated initial development and capital expenditure of $110-million.