Junior mineral explorer American Battery Metals has signed a nonbinding letter of intent (LoI) to buy a private Canadian gold company, which has exploration assets in one of the most prolific gold-producing regions of Colombia.

Fenix’s flagship property, the Abriaqui project, is the nearest gold exploration project to Continental Gold's Buritica mine. Abriaqui is a drill-ready advanced exploration project that shares many geological similarities with Buritica.

American Battery notes that Abriaqui and Buritica sit in the same geological setting along the Cauca trend.

“Not only does the Abriaqui property share many of the same characteristics of Continental's Buritica project prior to its discovery, we are fortunate to have the head of exploration who was responsible for its discovery and delineation to a multimillion-ounce high-grade gold resource,” said American Battery president and CEO Jeremy Poirier.

Fenix VP exploration Stuart Moller led the initial discovery at Buritica for Continental Gold, which is now being bought out by China’s Zijin Mining for C$1.4-billion.

The Buritica mine contains more than 11-million ounces of gold and is scheduled to enter into production in 2020, producing 250 000 oz/y at an all-in sustaining cost of $600/oz.

Under the terms of the LoI, American Battery will issue 28.5-million of its common shares to the shareholders of Fenix as consideration for all of the issued and outstanding shares of Fenix. In addition, an aggregate of 3 846 785 outstanding warrants of Fenix will be replaced with common share purchase warrants of American Battery exercisable at a price of $0.20 two years from the date of closing of the proposed transaction.

Meanwhile, American Battery Metals announced the termination of the proposed transaction with Bayshore Minerals, announced last month, the cancellation of the previously announced private placement and the resignation of Kevin Smith from its board.

Bayshore is a private company that owns the Elk gold mine project, in British Columbia. The project has a resource of 442 600 oz of gold in measured and indicated categories and 88 000 oz of gold in the inferred category.

American Battery would have issued 27-million shares in exchange for all the issued and outstanding shares of Bayshore.