Eldorado Gold (TSX: ELD; NYSE: EGO) is buying almost 10% of Amex Exploration (TSXV: AMX; US-OTC: AMXEF) to advance the Perron gold project in the same northern Quebec district as Eldorado’s record-producing Lamaque Complex.
The $15 million purchase, expected to close by Feb. 2, is part of a non-brokered private placement of 11.3 million flow-through shares at $2.35 each that gives Amex $26.7 million. Shares in Amex Exploration closed at $1.43 apiece on Monday. They had fallen 5% to $1.36 on Tuesday afternoon in Toronto.
Lamaque produced 177,069 oz. gold last year, it’s most ever and the largest among Eldorado’s assets, after a 29% output increase in the fourth quarter from higher grade and through-put, Eldorado said on Monday. The mine, just outside Val d’Or, is about 200 km southeast of Amex’s Perron project in the same Abitibi gold belt.
“Eldorado Gold’s investment is consistent with our strategy of continuing to build-out our business opportunities in Quebec, where we already successfully operate the Lamaque Complex in Val-d’Or,” president and CEO George Burns said in an emailed statement. “Our funds will be used to support a more systematic approach to exploration across the Perron gold project property.”
Study due
Amex said it plans to issue a resource estimate on Perron followed by a preliminary economic assessment. The project has potential for a bulk tonnage open-pit and high-grade underground mine, according to the company.
“This investment represents a strong endorsement of the work conducted at the Perron project to date and leaves us well capitalized to pursue a dual strategy of advancing known zones of gold mineralization while continuing to unlock significant exploration potential through targeting new discoveries,” Amex president and CEO Victor Cantore said in a release.
Eldorado, which also has mines in Turkey and Greece, produced 485,150 oz. gold last year. It plans to release 2023 results late on Jan. 22 followed by a conference call the next day. The company didn’t immediately reply to a request for comment on Tuesday.
At the 456-sq.-km Perron property this month, Amex reported that drilling cut 4.3 metres grading 23.81 grams gold per tonne from about 1,100 metres depth in hole PE-21-318W3. Drill hole PE-21-318W4 returned 6.55 metres at 9.57 grams from 1,150 metres down hole.
Amex’s drilling over a 4-km strike since at least 2017 discovered the gold zones named Eastern, Denise and Gratien as well as the Central polymetallic zone and the Grey Cat zone. The property has year-round road access and lies near power and water services.
The site, 110 km north of Rouyn-Noranda, includes the historical Normetal gold mine, which operated until 1975 after a discovery in 1925. Falconbridge, now part of Glencore (LSE: GLEN), explored the property for base metals in the mid-1990s before Amex acquired the property through an option agreement.
This is a great deal for Amex and another job well done by Victor.