Eldorado funds Brixton Metals’ BC gold quest

Mid-tier producer Eldorado Gold (TSX: ELD) is pledging nearly $6.5 million to advance Brixton Metals‘ (TSXV: BBB; US-OTC: BBBXF) search for the source of river gold that once produced a 2.6-kg nugget, British Columbia’s largest ever. 

The companies agreed Eldorado is to commit $5.35 million on exploration at the Atlin Goldfields project in B.C’s far northwest over five years beginning Sept. 30, they said on Tuesday. Eldorado is also to make staged payments totalling $1.1 million to Brixton. 

Eldorado, which has the Lamaque Complex in Quebec as well as mines in Turkey and Greece, produced 485,139 oz. gold last year. The company could buy all of the Atlin Goldfields project for $7 million in 2029, according to the Brixton deal.

Brixton is focused on locating the hard rock source of placer gold within the Atlin mining camp, just shy of the Yukon and Alaska borders. The area has been producing gold for 125 years and has the province’s second-largest placer gold output. It produced a reported 600,000 oz. from 1898 to 1945. An estimated additional 400,000 oz. of gold has been produced since record keeping ceased in 1946, the company says.

“We are delighted to have attracted Eldorado Gold, a well-established miner, to the Atlin Goldfields project,” Brixton Metals chairman and CEO Gary Thompson said. “We look forward to working with Eldorado in advancing this exciting gold project.”

Map courtesy of Brixton Metals.

1% royalty

If Eldorado chooses to buy the project, Brixton would be granted a 1% net smelter return royalty, with Eldorado retaining an option to purchase half of the royalty for $2 million before commercial production starts. Brixton may choose to receive half of the project buyout in Eldorado shares.

During the option period, Brixton is to serve as the project operator with Eldorado approving all work programs and project budgets. The latter will also support Brixton with environmental monitoring and community engagement efforts at Atlin Goldfields.

Located 9 km east of the town of Atlin, the project comprises a 579-square-kilometre claim group that Brixton consolidated after 2016. The Atlin gold camp holds the provincial record for the largest gold nugget, which weighed 85 oz. and was discovered on Spruce Creek, Brixton said. 

Two major placer producing creeks, Pine and Spruce, are among others within the Atlin Goldfields project, Brixton says. To date, its team has completed more than 39,500 metres of drilling across the property, and collected and compiled thousands of surface samples.

Rock samples returned values of up to 293 grams gold per tonne from the LD showing in 2017 and 53.60 grams from the Union Mountain showing in 2020. Drilling in 2023 returned 35 metres of 0.77 gram including 19 metres of 1.34 grams and 0.45 metre of 38.10 grams at the Yellowjacket target. In 2019, the company drilled 8.53 grams over 2 metres at the LD showing.

Shares in Brixton Metals closed unchanged on Tuesday in Toronto at 10¢ apiece, valuing the company at $46.5 million. They’ve traded in a 52-week range of 8.5¢ to 23¢.