US-focused exploration company Allegiant Gold on Monday announced a C$4-million strategic investment by Kinross Gold, which would accelerate exploration and development activities at the Eastside property in Nevada.
Kinross operates the Round Mountain gold mine, located across the valley from Allegiant’s Eastside project.
“We are very excited to have Kinross as a strategic partner, given their experience and prominent presence in Nevada, and the relative close proximity of their flagship Round Mountain mine, which shares many similar geological characteristics to Eastside,” said Allegiant CEO Peter Gianulis.
Kinross has entered into a subscription agreement with Allegiant to acquire 10 036 034 units in a non-brokered private placement at C$0.40 a unit, with each unit consisting of one common share of the company and one-half of one common share purchase warrant. Each warrant shall entitle the holder to purchase one common share at a price of $0.70 exercisable over two years following the closing date, subject to customary adjustments.
On closing Kinross will own 9.9% of the then issued shares of Allegiant.
The strategic investment by Kinross calls for the formation of a four-person technical advisory committee comprised of two members from each company. The committee will provide advice and guidance on the upcoming core-drilling programme at the high-grade zone (HGZ) within the original pit zone at Eastside.
Allegiant has agreed to allocate no less than 80% of the investment by Kinross to a work programme specifically designed for the HGZ.
“Allegiant and Kinross have developed an excellent rapport over the years, and we look forward to a productive and collaborative working relationship with them,” said Gianulis.