VANCOUVER (miningweekly.com) – Canadian project developer Seabridge Gold plans to acquire Paulson Gold Holdings’ Snowstorm project, located on the prospective intersection of three of the most important gold trends, the Carlin, Getchell and Northern Nevada Rift Zone trends, in Northern Nevada.
The Snowstorm property comprises 700 mining claims and about 2 350 ha of free lands selected by a private company over a 15-year period and explored over the past decade.
The acquisition also includes an extensive package of data generated by previous operators. Despite potential targets being hidden under tertiary cover, the existing data supports the project’s outstanding exploration potential, Seabridge stated on Tuesday.
Geological and geochemical evaluations of Snowstorm have documented hydrothermal alteration zones consistent with large Northern Nevada deposit types. Geophysical surveys have confirmed the structural settings that host large Northern Nevada deposit types. Limited drilling has demonstrated that some of the target areas are at a depth amenable to surface exploration and resource delineation, the company said in a statement.
Snowstorm borders and is on strike with several large, successful gold operations including the Getchell/Turquoise Ridge joint venture operated by Barrick Gold, Newmont Mining’s Twin Creeks and Klondex Mines’ Midas operations.
“The Snowstorm project has all the earmarks of an outstanding exploration play in one of the world’s best environments for finding large gold deposits. We appreciate the opportunity to capitalise on its outstanding potential,” Seabridge chairperson and CEO Rudi Fronk said.
The parties have signed a letter of intent, under which Seabridge will acquire all the outstanding shares of the private company that owns a 100% interest in the Snowstorm project.
It will pay Paulson 700 000 Seabridge common shares; issue 500 000 common share purchase warrants exercisable for four years at C$15.65 apiece; make a conditional cash payment of $2.5-million if exploration activities at Snowstorm result in defining a minimum of five-million compliant ounces of gold resources; and make a further cash payment of $5-million on the delineation of a further five-million ounces of gold resources.
The letter of intent is nonbinding and closing of the transaction is subject to completing a further review of the private company’s affairs and a definitive agreement and receipt of stock exchange approvals. Paulson has agreed to a 60-day exclusivity and nonsolicitation period to allow the parties to complete further review and settle a definitive agreement. Canaccord Genuity acted as financial adviser to Paulson on this transaction.
Seabridge is currently working on the massive KSM project, in British Columbia, one of the largest undeveloped gold projects in the world. An updated preliminary feasibility study estimates proven and probable reserves total 38.8-million ounces of gold and 10.2-billion pounds of copper.