TSX-V-listed Gold79 Mines on Thursday announced an exploration and option agreement with Kinross Gold, which CEO Derek Macpherson said was a strong endorsement of the Jefferson Canyon project’s potential.
Jefferson Canyon is a gold/silver project, located in Nye county, Nevada, about 7 km from Kinross’ Round Mountain operations.
“The agreement with Kinross is a strong endorsement of Jefferson Canyon's potential and will accelerate exploration while allowing Gold79 shareholders to retain a significant interest in what we view as a very prospective project,” he said in a statement.
In terms of the agreement, Kinross will make initial cash payments and cost reimbursements of $50 000 and a commitment to purchase up to 9.9% of the issued and outstanding shares of Gold79 on a partially diluted basis (for no greater than $200 000). The gold miner will make ongoing lease payments of $75 000 a year and is required to spend $600 000 in exploration work.
During the term of the agreement, Kinross has the option to acquire 70% of the project for a cash payment of $5-million to Gold79 and form a joint venture, and a second option to acquire an additional 10% of the project for a further payment of $5-million to Gold79.
The term of the agreement is four years, starting from receipt of the pending drill permit, with a potential extension of up to two years, subject to certain conditions.
"We are excited to be working with Kinross on the Jefferson Canyon Project as the proximity to the Round Mountain mine complex makes Kinross the natural partner. This agreement will allow Gold79 to focus more of its resources on the Gold Chain project in Arizona, where we are permitted to drill multiple high-potential targets, while Kinross advances Jefferson Canyon,” says chairperson Gary Thompson.