Three Alberta-listed juniors have agreed to sell Deak Resources (TSE) a 49% interest in all their mineral assets within a 100-mile radius of Deak’s Kerr mine site in Virginiatown, Ont.
The value of the assets will be determined by an independent appraiser, and the juniors — Perrex Resources, Gwen Resources and Alberta Gold Exploration — will receive Deak shares valued at 13 cents each in lieu of their interests. In addition, they retain a 3% gross royalty on any future production from the properties.
Deak can option the remaining 51% interest by performing exploration and development work (or making cash payments in lieu of such work) in an amount equal to 250% of the value of the assets as determined by the independent appraiser. The exploration expenditures must be made over an 8-year period, and at least half must be spent no later than the fifth anniversary of the agreement.
Under the agreement, Deak must ensure that the assets remain in good standing. And if it abandons any of them, they will revert back to the respective transfer companies.
Gwen, Perrex and Alberta Gold hold a combined 1,400 claims totaling 56,000 acres. The claims, most of which are within the Kirkland Lake and Harker-Holloway gold camps, are close to the Kerr mine and mill complex. The mill has an overall processing capacity of 4,500 tons per day, based on three 1,500-ton-per-day circuits. The No. 1 circuit is fully functional while No. 2 is being brought on stream for specialized processing of complex materials at a rate of up to 600 tons per day. The No. 3 circuit is not in use.
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